Many of those elite brand certificate programs were propped up by SLM private student loans. When the folks who took these courses do not get good jobs, some end up struggling to pay their loans. Some eventually default. As a hedge for SLM, most of these loans are processed into Student Loan Asset-Backed Securities (SLABS). And pension programs are invested in this mess. Not only did 2U s**** over its workers, it did the same to Wilmington Trust customers and thousands of people just trying to get ahead in this rapidly-changing world. When lots of companies act this way, it can destabilize an economy.
5 replies (most recent on top)
Hundreds of millions in marketing and ads could not get enough students... https://poetsandquants.com/2024/08/09/is-2u-just-another-pets-com-in-slow-motion/?pq-category=online-mba&pq-category-2=online-mba-news
2U, Inc., one of the largest online education technology providers in the country, recently filed for Chapter 11 bankruptcy protection. Over the past 16 years, 2U was one of the fastest-growing edtech companies due to its partnerships with prestigious universities and acquisitions of major competitors, like University of Southern California and edX, respectively.
Once an industry giant, skyrocketing levels of corporate debt and nose-diving revenues have led to an historic decline in the value of the company over the past year alone (a 96% decline to be precise). Currently, 2U remains in operation and claims that the bankruptcy process will not disrupt the education programs that students and their university partners rely on… for now.
There is a fundamental flaw in the system: corporations like 2U can use bankruptcy to rebound from financial missteps, but individual borrowers must suffer the consequences of trusting a broken system.
Check out our latest blog where we break down the biggest risks for students:
Read the blog
To boil this down, there are essentially two different realities: one for corporations and another for students and borrowers.
2U and its creditors have the chance to restructure and start fresh. Students do not have the same speedy opportunity, and instead will have to shoulder the high student debt burdens incurred from enrolling in 2U’s programs.
The Higher Education Act is supposed to provide a safety net as an alternative to bankruptcy—and cancel debt automatically when schools close or fail. Unfortunately, for tens of thousands of 2U students, there is ambiguity about whether these protections apply. Should 2U close, these students could be left to navigate the fallout on their own, saddled with loans for educational programs that may not hold the value they were promised.
While 2U pursues bankruptcy protection, many questions remain about what the soon-to-be-private company will look like afterwards—and what will happen to borrowers. Universities and policymakers must scrutinize colleges’ partnerships with third-party online program managers like 2U and ensure that providing a quality education for its students is never sacrificed for the sake of corporate gain. At the same time, students need stronger protections, better oversight, and real recourse to shield them from the fallout of such corporate failures.
As we have repeatedly urged, it is long past time for policymakers to protect students. Read our blog to see the questions federal and state regulators should be asking.
Until next time,
Tariq Habash
Senior Fellow
Student Borrower Protection Center
@Stolen Valor. You sound like management. If it hadn't been for Bush II bailing out SLM in 2008, 2U wouldn't have had the opportunity to steal from so many consumers, especially those edX certificates. It has been Republicans bailing out failures like 2U. And in the case of 2U, Democratic cronies like Valerie Jarrett falling in line. Market cap is $2.1M.
TWOU: 0.76 USD <---- That's 2u stock, keep voting blue. It's Bidenomics! Maybe 2U should so another Reverse Split 100 to 1? 🤔 Stolen Elections have consequences.
When did you work here and get sc--wed over?