[8][9] Since the early twentieth century critics have complained about money rather than academics driving leadership at traditional universities.
Thorstein Veblen's 1918 famous screed on the topic, The Higher Learning in America, was subtitled, "A Memorandum on the Conduct of Universities by Business Men.
[11] In 1923, muckraker Upton Sinclair published The Goose Step: A Study of American Education, a 488-page account of monied interests at elite colleges and universities, which concluded that all of the institutions he researched were plutocratic.
Sinclair reportedly interviewed 1000 people across the US and used a variety of primary and secondary sources, particularly from the American Association of University Professors.
[12][13] In the 1940s, "fly-by-night commercial vocational 'schools' sprang up to collect veterans' tuition grants" due to the newly created GI Bill's lax requirements and limited oversight.
With profit-driven schools, academic labor was faced with unbundling, where "various components of the traditional faculty role (e.g., curriculum design) are divided among different entities, while others (e.g., research) are eliminated altogether.
[19][20][21][22][23] Regulations and policies to curb the abuses in for-profit higher education occurred during the presidency of Barack Obama.
[31] Concerns about for-profit school owners converting to nonprofit while retaining profit-making roles led lawmakers to request an examination of the situation by the U.S. Government Accountability Office.
"[38] In January 2021, in anticipation of an edtech bubble, Class Acceleration Corporation (CLAS.U), a special-purpose acquisition company (SPAC) was formed, raising $225 million in its initial public offering.
[40] In June 2021 2U announced they would be acquiring edX, "to create an entity that would reach 50 million learners and serve most of the best universities in the United States and the world.
[51][52] Today, most state flagship universities are not affordable for low- and moderate-income families as these schools cater more toward affluent students.
In 2023, the Chronicle of Higher Education found that 75 percent of the university officials they surveyed said private-public partnerships were increasing.
The General Accounting Office (GAO) also found that 135 for-profit colleges contributed to 54% of all student loan defaults.
[64] In the 2009–2010 academic year, for-profit higher education corporations received $32 billion in Title IV funding – more than 20% of all federal aid.
[65][66][67] A two-year congressional investigation chaired by Senator Tom Harkin, D-Iowa, examined for-profit higher education institutions.
[73][74][75][76] Corinthian Colleges and Education Management Corporation (EDMC) faced enrollment declines and major financial trouble in 2014 and 2015.
[78] Enrollment at the University of Phoenix chain fell 70% from its peak[79] In 2016, ITT Technical Institute closed, and the US Department of Education stripped ACICS of its accreditation powers.
For-profit student loan servicers have included Maximus Inc., Sallie Mae, Navient, Great Lakes Borrowers and Nelnet.
[114][115] Colleges and universities may generate capital for large projects like sports stadiums, dormitories, and other infrastructure by issuing bonds that are created, rated, and sold to investors.
[further explanation needed][122][123][124] In 2016, Noodle CEO John Katzman estimated that about $10 billion per year is being spent on higher education marketing and advertising.
Investigators posing as prospective students documented deceptive recruiting practices, including misleading information about costs and potential future earnings.
[146] In 2015, the Obama administration introduced numerous legislation aimed at allowing students to make informed decisions about attending colleges and universities that were within their budget.
[147] The American Graduation Initiative was legislation introduced by the Obama administration to increased academic progress requirements for financial aid to ensure that students finish their education.
[147] The administration also introduced America's College Promise (ACP) which was intended to support the American Graduation Initiative, make higher education more accessible and build the economy.
[149] The U.S. Department of Education (DoED) proposed "gainful employment regulations" would provide more transparency and accountability to institutions that offer professional and technical training.
"[150] In his 2015 budget proposal, President Obama recommended greater regulation of for-profit education, including a closure of the loophole that exempted GI Bill money from being used in the 90–10 formula.
[152][153][154] In 2019, Trump's Secretary of Education Betsy DeVos issued a complete final repeal of the 2014 "gainful employment rule" (a regulation that never came into effect, but would have cut federal funding from colleges whose graduates consistently had high debt compared to their incomes).
[157][158] DeVos derided the program as a "free money" giveaway to borrowers; during her tenure as secretary of education, department staff were given only about 12 minutes to process each application, some of which ran to hundreds of pages.
[81] In September 2017, the Trump administration proposed to remove conflict of interest rules between VA officials and for-profit colleges.
[160] Lobbyists for the for-profit higher education industry took several steps to stop regulation and to fight against transparency and accountability.