The Evolved Podcast

The College Cartel: The Hijacking of Higher Education

Manhattan Prophet Season 1 Episode 13

The veil has been lifted on America's higher education system, revealing a troubling transformation from institutions of learning to financial empires prioritizing wealth accumulation over student welfare. 

Diving deep into the roots of our educational model, we trace its evolution from the Prussian system designed for industrial capitalism to today's credential factories where knowledge has become mere job training. The stark numbers tell a damning story: Harvard sitting on a $53 billion endowment while providing just $250 million in financial aid; tuition costs skyrocketing 1,200% since the 1980s while wages remain stagnant; and a federal loan system that guarantees universities get paid upfront regardless of student outcomes.

We expose how powerful university lobbying organizations shield these institutions from meaningful regulation by wrapping private capital accumulation in the sacred language of public good. The psychological conditioning begins early – students are taught that college is the only path to success, alternative routes are devalued, and once debt is incurred, cognitive dissonance prevents questioning whether it was worth it. Most troubling is how student debt functions as a disciplinary tool, discouraging risk-taking and entrepreneurship while enforcing compliance with an economic system that profits from aspiration.

What other developed nations treat as a public good, America has transformed into a commodified gateway where young adults must purchase their eligibility to participate meaningfully in the economy. The contrast is stark: education is free in Germany and extremely affordable across much of Europe, while American students graduate to decades of debt servitude. Until we implement reforms like outcome-contingent funding, university risk-sharing, and robust alternatives to traditional college paths, we'll continue supporting a system that functions more like a hedge fund than an educational institution.

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Speaker 1:

Hello everyone and welcome back to the Manhattan Prophet podcast. I am the Manhattan Prophet. As a reminder, I'm here to ensure that all knowledge I give you finds meaning in a practical place in your everyday lives. It's only through properly digesting knowledge, in this case of ourselves and the world around us, we see things clearly enough to break old patterns of behavior and to get a new path forward to a heightened state of consciousness. Today we're cutting through the polished brochures and ivy-covered illusions to expose the harsh economic truth behind higher education in America. For decades, universities, especially the elite ones, have built vast financial empires, accumulating billions in donor-restricted endowments, while tuition prices soared and students were saddled with crushing lifelong debt. We'll explore how these institutions, often operating more like hedge funds than places of learning, have chosen a model of tax-sheltered wealth accumulation over universal affordability. And we'll confront the growing disconnect between the promised value of a college degree and the financial reality that awaits graduates, where wages often fail to match the costs of the diploma, leaving millions questioning whether the so-called investment in education was ever meant to pay off. We're stepping into the heart of the system that promised liberation but instead delivered lifelong debt.

Speaker 1:

The US education system as we know it was modeled after the Prussian model in the 19th century structured, standardized and designed to produce obedient, punctual and efficient workers for factories and bureaucracies. This model was perfect the industrial capitalist age, and as industrialists grew in power, they began shaping curricula, funding universities and advocating for uniform testing as a way to measure merit. Historically, education, especially in classical liberal traditions, was conceived as an end in itself. It aimed to cultivate moral reasoning, civic engagement and the pursuit of truth. Thinkers from Socrates to John Dewey emphasized that education should develop the whole person, intellectually, ethically and spiritually. It was not transactional, it was formative. In many ways it was sacred. That changed with the rise of industrial capitalism, which reframed education as a means to an end, specifically economic productivity. Knowledge became job training, learning became credentialism. The goal shifted from enlightenment to employment. Universities transformed from sanctuaries of inquiry into supply chains for labor markets.

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Standardized tests like the SAT, act and GRE prioritize analytical reasoning, pattern recognition and compliance under time pressure. These mirror traits idealized by the industrial capitalist model obedience, efficiency and hierarchy. They do not measure creativity, emotional intelligence or collaboration, according to Howard Gardner's theory of multiple intelligences, or collaboration. According to Howard Gardner's theory of multiple intelligences, these tests only assess two types, linguistic and logical-mathematical, ignoring others like spatial, interpersonal or bodily-kinesthetic intelligence. Gardner's work, along with empirical studies like those using the TEAL inventory of multiple intelligences, demonstrates that students' strong and non-traditional intelligences often underperform on standardized tests despite thriving in other areas of learning. Further, researchers like Angela Duckworth and James Heckman have shown that non-cognitive skills, grip, emotional regulation, adaptability are more predictive of success than IQ or test scores. Yet these metrics are not only ignored in standardized testing, they are actively undermined by a system that values obedience over originality.

Speaker 1:

In the late 20th century, universities transformed into financialized institutions with billion-dollar endowments and investment portfolios. Harvard, yale, stanford and Princeton now manage endowments exceeding $30 billion each. Harvard alone sits on over $53 billion. These endowments are invested in private equity, hedge funds and real estate portfolios and are managed like Wall Street funds. Despite their scale, universities spend just 4-5% of their endowment annually, citing donor restrictions of their endowment annually. Citing donor restrictions. Let's look at the respective sizes of financial aid given. Harvard University gave a staggeringly low $250 million in aid. Yale University $200 million in aid. Princeton $212 million in aid. Most of these funds are legally bound by donors to be used for specific purposes named professorships, buildings, niche research rather than affordability or debt relief. Schools rarely challenge these restrictions, even when donors are long deceased. They prefer this model because it allows them to accumulate wealth without having to lower tuition or restructure finances.

Speaker 1:

At the same time, the US federal government began guaranteeing student loans, transferring financial risk from institutions to students and taxpayers. Universities receive full tuition up front, no matter what happens. In 2024 alone, ivy League schools received $6.4 billion in federal funding. The University of Texas system managed $45 billion. Yet these institutions face no consequences if students fail to graduate or repay their loans.

Speaker 1:

The reason the federal government backs all student loans and allows universities to collect payment up front is deeply political. The policy was originally framed as an effort to expand access to education and promote equal opportunity. However, over time, it evolved into a mechanism that ensures consistent revenue for universities and financial institutions. By assuming the risk, the government enables schools to raise tuition with impunity, knowing full well that students can borrow virtually unlimited sums with no underwriting or performance requirements. The arrangement benefits all institutional actors Schools get guaranteed income, lenders collect interest and the state earns political capital for quote-unquote investing in education. But the student bears the ultimate burden, entering the workforce tethered to a debt they cannot discharge, even in bankruptcy. This model creates perverse incentives Schools are rewarded for enrolling more students and raising tuition, regardless of educational outcomes. It's a business model where the product, the degree, is sold with no performance guarantee and the consumer, the student, pays, often for life. The truth is, it's a PR machine at work.

Speaker 1:

Universities are no longer just educational institutions. They're multi-billion dollar financial entities with a vested interest in maintaining the illusion that their costs, aid and impacts are fair and justified. They actively lobby Congress to maintain tax breaks, endowment protection and student loan guarantees, while resisting calls to democratize education. There are powerful associations whose main job is to protect universities' financial and regulatory interests. We have the American Council on Education, ace, the Association of American Universities, aau, with the National Association of Independent Colleges and Universities, the NAICU, and the National Association of Student Financial Aid Administrators, the NASFAA. Their primary goals are to act as lobbyists for all types of colleges and universities who defend their autonomy, funding access, who protect federal research funding, immigration policies in their favor, and lobbying around financial aid policies ensuring a continued federal student aid flows, including grants and loans.

Speaker 1:

These policies beg the natural question why is tuition largely unregulated? Well, it's because universities successfully argue that regulating tuition would, quote-unquote, infringe on academic freedom or damage educational diversity. They leverage the myth that higher education is always a pure social good, even though it increasingly functions as an industry. Politicians fear backlash. Many universities are major employers and regional economic anchors. No senator wants to fight the flagship university in their state.

Speaker 1:

Student loan structures shift risk away from universities. Universities get paid up front. The student carries the debt burden. The university lobby successfully merges the language of sacred public good, which is education, equality and opportunity, with the interests of private capital accumulation, growth, autonomy and expansion. Thus attempts at reform get politically framed as a tax on learning, not on business models. It's a perfect shield. If you behave like a corporation, competing for market share, maximizing revenue, offloading risk onto the public and marketing yourself to paying customers, then you are a corporation, no matter how much sacred language you wrap yourself in.

Speaker 1:

The American higher education system isn't just neglected by regulation. It is actively defended from regulation by powerful, well-funded lobbying efforts designed to maintain profit flows under moral camouflage of public service. It may not seem like one, but in truth students are psychologically caught in a manufactured narrative that college is the only viable path to success. From early childhood, standardized education trains us to believe that not going to college equals failure. This conditioning is reinforced through school counselors, media portrayals, parental expectations and policy incentives. College admission is framed as a test of personal value, especially for elite schools. Acceptance becomes a symbol of intelligence, potential and belonging in a meritocratic society. To reject college often feels like rejecting your own worth or future. Social proof and herd mentality push students to conform. If everyone is doing it, it must be right. Few are given the tools to evaluate the long-term debt implications or the diminishing value of many degrees in today's economy. Instead, they're sold a dream or a myth. College will make you free and education is a great equalizer. Few alternative pathways like vocational training, entrepreneurship or apprenticeships are valorized.

Speaker 1:

Challenging the college system means challenging the broader illusion that success is fairly earned. High schools, guidance counselors, parents and media all funnel students towards college. The system reproduces itself. Students are taught to enter it, then later manage or promote it. Once debt is incurred, cognitive dissidence kicks in. It's psychologically easier to believe that college was worth it than to face the idea that you were coerced into a lifelong financial burden.

Speaker 1:

Degrees have become more about signaling conformity than acquiring critical skills. In sociological terms, they are class markers, gatekeeping devices that preserve elite access and justify systemic exclusion. Many jobs now require a degree, not because it's necessary, because it's become a filtration system. Even mediocre salaries are gatekept beyond college credentials, creating a coercive dependency on higher ed. Of dependency on higher ed, a remarkable and flagrant injustice reveals itself where we examine wage stagnation versus tuition inflation. Since the early 1980s, college tuition has increased over 1,200 percent, vastly outpacing inflation and wage growth.

Speaker 1:

According to the College Board, the average cost of attending a private university in the US now exceeds $55,000 per year. By contrast, real wages for college graduates have remained nearly flat. In the 1970s, a student could feasibly work a summer job and pay tuition. Today, even with scholarships, most students must take out substantial loans. The average student borrower can graduate with over $100,000 in debt. This total grows exponentially with graduate school or interest accrual. And what does that investment yield? Many graduates are underemployed, working jobs that don't require a degree.

Speaker 1:

The belief that a diploma guarantees upward mobility is increasingly disproven by economic data. The disconnect between cost and value is widening, with students taking on unsustainable debt for credentials that deliver diminishing returns. The core disconnect is that universities are charging based on prestige inflation while the economy pays on market realities, and the two curves have decoupled sharply. There is, however, an argument for attending college. On average, college graduates earn significantly more over their lifetimes than those without degrees. Bachelor's degree holders earn about 1.2 million more over a lifetime than high school graduates. Unemployment rates are also consistently lower for college graduates. But the caveat is that this is an average. It hides massive variation by major institution, race, gender and geography.

Speaker 1:

In many industries, a degree is no longer about learning. It's a gatekeeping mechanism. Employers often use college degrees as proxies for work, ethic, socialization, even compliance. Without one, they're often locked out of an entry-level white-collar role, regardless of actual skill. This is systemic coercion, not merit, but it still reinforces the need to attend. College can be a place to expand worldviews, encounter diverse perspectives and explore identity, values and meaning. For some, it offers the time and space to question inherited beliefs and reorient life trajectories. This is what higher education should be about, though it's increasingly crowded out by debt pressure and workforce prep.

Speaker 1:

For many, the choice isn't between college and something better. It's between college and social precarity. Until vocational paths, apprenticeships and entrepreneurial pipelines are truly legitimized and supported, college remains a default route to safety, even if it's exploitative. The reality, however, is that there are more graduates than high-quality jobs requiring degrees, especially in the liberal arts and humanities. But instead of adjusting the system, universities keep churning out degrees and employers keep demanding them, knowing it reduces labor costs and raises competition. This turns education into a zero-sum game.

Speaker 1:

Credentials rise in price and prestige, but not in actual power. Student debt locks graduates into systems of labor, compliance and dependence. Debt in practice becomes a disciplinary tool. The debt-based education system discourages risk-taking, entrepreneurship or activism, since debtors need to repay and cannot afford instability. This makes workers more obedient, while universities profit from enrollment and banks profit from interest.

Speaker 1:

Some might argue that the most egregious example of manufacturer scarcity can be found in what we see with universities who push the scarce admission as prestige. The more exclusive a school is, the more it's seen as valuable. Instead of expanding access, elite universities reject tens of thousands to inflate selectivity and protect the brand value. To inflate selectivity and protect the brand value, they could admit more. They choose not to, because scarcity equals status and status equals power. So the system creates an illusion of necessity and uniqueness around college while actively suppressing or discrediting alternatives. That's manufactured scarcity limiting choices to drive demand, then monetizing the very access it restricts.

Speaker 1:

The American education system is one of the most overt mirrors into what we value as a society. Student debt is a rite of passage. Only in America do young adults routinely enter decades-long debt servitude for the privilege of basic middle-class access. In this sense, capital precedes citizenship. You are worthy not because you exist, but because you are willing to assume debt for your future productivity. American students must purchase their eligibility to participate meaningfully in the economy. Everything, even the sacred, must be monetized and scaled.

Speaker 1:

Market logic infiltrates the educational structure. Us universities aggressively brand themselves. They compete by corporations for rankings. They treat students as customers. They prioritize growth, prestige and market share over actual educational depth. Many universities operate massive fundraising campaigns, luxury campus expansions, sports franchises and brand partnerships. It's almost an exact parallel to corporate expansion models. Institutions are free to extract whatever the market will bear, regardless of long-term societal cost.

Speaker 1:

In most developed nations, higher education is either free, like in Germany or Nordic countries, or bare and extremely low cost, like France and Austria. Meanwhile, nations like the Netherlands and even South Korea cap tuition or heavily regulate costs to protect accessibility. In many other countries, education is treated as a public good, something society invests in for the collective health and future, regardless of individual earning potential. People forget in older educational traditions like Oxford or Bologna, even early American liberal arts systems. Education was originally framed as a preparation for citizenship, moral reasoning, stewardship of society. The American university system doesn't primarily exist to cultivate whole, wise human beings. It exists to manufacture market-ready participants for the capitalist machine to extract maximum economic rent. In the process, where other societies still retain vestiges of education as a birthright of human dignity, the US exposes education as a commodified gateway to social worth. How a society designs its schools tells you what it secretly worships. In America, universities don't just teach capitalism, they are capitalism dressed in ivy.

Speaker 1:

What would a fairer model look like? Well, you could have outcome contingent funding, where universities only receive full tuition payments if students earn above a set income threshold. Post-graduation, similar to income share agreements, there could be federal loan caps based on program ROI. If the average graduate of a degree program earns $30,000 a year, students shouldn't be allowed to borrow $100,000 for it. This creates price discipline and deters low-value programs. There could also be university risk sharing, where institutions should be required to contribute to repayment insurance pools or co-sign a portion of federal loans. This gives them skin in the game. There definitely should be transparency mandates, which would require detailed public reporting on how tuition revenue and endowment income are spent, especially how much goes to administration instruction and student aid, especially how much goes to administration instruction and student aid. There ought to be a statewide push for robust alternatives Expand public funding for apprenticeships, trade schools and accredited non-traditional pathways.

Speaker 1:

We should decentralize access to opportunity beyond elite university gates and, undoubtedly, there should be pricing regulation. Unlike healthcare utilities or even mortgage markets, higher education pricing is almost completely unregulated. There are no laws capping how much universities can charge for tuition fees, room or board. Why? Because politically, higher education was framed as a private good rather than a public good. However, now that universities have become predatory capitalists, there needs to be a revision in understanding. The inherent problem is that government itself profits from student loans. The US federal government earns billions in interest from student loans. This reduces incentives to cap tuition or regulate universities, because higher tuition means bigger loans and bigger loans mean more revenue to the government Government both funds and profits from the same debt crisis. Until these changes occur, we are propping up a system that functions more like a hedge fund, with classrooms and a public good.

Speaker 1:

The question is when does the government stop becoming a self-serving entity and begin looking out for the public good, we were told. Education was set us free, and in many, many ways it does. It expands our minds and creates tremendous opportunity, but in the shadow of industrial capitalism, it becomes another means of extraction. Capitalism, while capable of generating innovation, enterprise and empowerment, cannot be allowed to run unchecked, especially in sectors that shape the soul of a nation. Education is one of those sacred spaces, but that space has been corrupted by the very institutions that claim to protect it. What we're witnessing is not just a misalignment of priorities. It is a coordinated siphoning of public promise into private gain. Universities protect their investments, the government shields those institutions, and students, often barely adults, are left footing the bill for a system designed to profit off their aspiration. The endowment class, corporate financiers and policymakers have built a revolving door of privilege funded by debtors who can't declare bankruptcy and can't opt out. This is not accidental. It is systemic capitalist rot masquerading as educational opportunity, and if we don't confront the corrosive power dynamic between universities, government policy and capital, we risk further entrenching an academic caste system that feeds on the future of every generation.

Speaker 1:

As you continue listening to the Manhattan Prophet podcast, I'm going to unveil the true nature of the world that exists right under your nose. We're going to analyze with you, out in the open, the systems at play here and the ways we can grow together and evolve. I'm going to provide you with real-world ways to touch higher levels of consciousness and understanding through truth and knowledge. Episodes are updated weekly. If you believe and want to change your world for the better and support this evolution of consciousness, please show me by following and sharing this podcast with those you love and leaving a review. If you enjoyed our time today, please donate on BuyMeACoffee, linked in the show notes below. Until next week, let's level up and master your universe.