I've said plenty here over the years about online education, and plummeting enrollments at for-profit (and almost entirely online-based) universities suggest that the pool of potential student/customers is starting to see through the scam. Having an online Bachelor's degree is worse than having no college degree at all on the job market, with the added bonus of saddling you with a six-figure student loan debt for all of that non-education.

One of the largest players in the industry / racket, Corinthian Colleges, officially went belly-up on Sunday. This is not a surprise; the company has been staggering along as the Sick Man of online education for years as the investigations and financial issues mounted. Frankly it's a small miracle that they lasted as long as they did. The LA Times story on the closure notes that this strands CC's currently 78,000 students and potentially makes them eligible for Federal student loan forgiveness. And my strongest reaction to this story was the realization that, holy crap, this dying mess of an institution (in an industry in overall decline) with ten solid years of horrible publicity still has 78,000 students somehow. Who in the hell are these people?

My guess is that any "real" students in that number are either people who need a degree to qualify for a higher salary level (as in civil service) and don't really care about quality, or people whose employer/etc pays for the courses and thus "Fuck it, it's free" is the dominant mindset. For the most part, though, as the California Attorney General stated:

The state’s lawsuit claims that Corinthian—which charges more than $40,000 for tuition and related fees—targets single parents who are close to the poverty level, a demographic that its internal documents describe as “composed of ‘isolated,’ ‘impatient,’ individuals with ‘low self-esteem,’ who have ‘few people in their lives who care about them’ and who are ‘stuck’ and ‘unable to see and plan well for future,’ through aggressive and persistent internet and telemarketing campaigns and through television ads on daytime shows like Jerry Springer and Maury Povich.’ ”

In other words, online degrees are marketed to the same segment of the population as payday loans and cash advances, with the most obvious difference being that a payday lender won't let you go $150,000 in the hole. Of course, the school (or "school") isn't the one fronting the cash, and that gets to the heart of what the entire business model of for-profit education is all about. It is nothing more than a conduit for shifting government money to a private business and risk and responsibility to private individuals. That's why the admissions criteria are limited to an exclusive class of potential students consisting of anyone capable of qualifying for a Federal student loan or grant. It's not difficult to see that any individual who doesn't understand that a degree from "Everest University Online" is not worth the $40,000/year Corinthian charges is, in the immortal words of Nigel Tufnel, not exactly university material.

Most of these students would be better served at a community or technical college, institutions designed to offer cheap, flexibly scheduled classes to working adults and younger people for whom traditional 4-year colleges don't make sense. Online schools are simply parasites, attaching themselves to an industry and a population of students that don't need them. That the primary expense for these companies is advertising – University of Phoenix spent nearly three quarters of a billion dollars on advertising last year – underscores how much more similar to retail and service industry firms they are than to any educational institution.

This is the tip of an iceberg, a bubble poised to burst. We will be seeing more of this in the near future, not only among online schlock merchants but also among smaller brick-and-mortar colleges. With the skyrocketing cost of college tuition and the vast numbers of marginal students being enticed to sign contracts they don't fully understand, it would take a great deal of willful blindness to fail to see the similarities to the housing market of the last decade.