April 30, 2025 • 22 mins
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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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Hello everyone and welcome back to the Manhattan
Prophet podcast.
I am the Manhattan Prophet.
As a reminder, I'm here toensure that all knowledge I give
you finds meaning in apractical place in your everyday
lives.
It's only through properlydigesting knowledge, in this
case of ourselves and the worldaround us, we see things clearly
enough to break old patterns ofbehavior and to get a new path
forward to a heightened state ofconsciousness.
(00:26):
Today we're cutting through thepolished brochures and
ivy-covered illusions to exposethe 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
(00:47):
students were saddled withcrushing lifelong debt.
We'll explore how theseinstitutions, often operating
more like hedge funds thanplaces of learning, have chosen
a model of tax-sheltered wealthaccumulation over universal
affordability.
And we'll confront the growingdisconnect between the promised
value of a college degree andthe financial reality that
awaits graduates, where wagesoften fail to match the costs of
(01:11):
the diploma, leaving millionsquestioning whether the
so-called investment ineducation was ever meant to pay
off.
We're stepping into the heartof the system that promised
liberation but instead deliveredlifelong debt.
The US education system as weknow it was modeled after the
Prussian model in the 19thcentury structured, standardized
(01:31):
and designed to produceobedient, punctual and efficient
workers for factories andbureaucracies.
This model was perfect theindustrial capitalist age, and
as industrialists grew in power,they began shaping curricula,
funding universities andadvocating for uniform testing
as a way to measure merit.
Historically, education,especially in classical liberal
(01:53):
traditions, was conceived as anend in itself.
It aimed to cultivate moralreasoning, civic engagement and
the pursuit of truth.
Thinkers from Socrates to JohnDewey emphasized that education
should develop the whole person,intellectually, ethically and
spiritually.
It was not transactional, itwas formative.
In many ways it was sacred.
(02:15):
That changed with the rise ofindustrial capitalism, which
reframed education as a means toan end, specifically economic
productivity.
Knowledge became job training,learning became credentialism.
The goal shifted fromenlightenment to employment.
Universities transformed fromsanctuaries of inquiry into
(02:36):
supply chains for labor markets.
Standardized tests like the SAT,act and GRE prioritize
analytical reasoning, patternrecognition and compliance under
time pressure.
These mirror traits idealizedby the industrial capitalist
model obedience, efficiency andhierarchy.
They do not measure creativity,emotional intelligence or
(03:00):
collaboration, according toHoward Gardner's theory of
multiple intelligences, orcollaboration.
According to Howard Gardner'stheory of multiple intelligences
, these tests only assess twotypes, linguistic and
logical-mathematical, ignoringothers like spatial,
interpersonal orbodily-kinesthetic intelligence.
Gardner's work, along withempirical studies like those
using the TEAL inventory ofmultiple intelligences,
(03:20):
demonstrates that students'strong and non-traditional
intelligences often underperformon standardized tests despite
thriving in other areas oflearning.
Further, researchers likeAngela Duckworth and James
Heckman have shown thatnon-cognitive skills, grip,
emotional regulation,adaptability are more predictive
of success than IQ or testscores.
(03:42):
Yet these metrics are not onlyignored in standardized testing,
they are actively undermined bya system that values obedience
over originality.
In the late 20th century,universities transformed into
financialized institutions withbillion-dollar endowments and
investment portfolios.
Harvard, yale, stanford andPrinceton now manage endowments
(04:04):
exceeding $30 billion each.
Harvard alone sits on over $53billion.
These endowments are investedin private equity, hedge funds
and real estate portfolios andare managed like Wall Street
funds.
Despite their scale,universities spend just 4-5% of
their endowment annually, citingdonor restrictions of their
(04:25):
endowment annually.
Citing donor restrictions.
Let's look at the respectivesizes of financial aid given.
Harvard University gave astaggeringly low $250 million in
aid.
Yale University $200 million inaid.
Princeton $212 million in aid.
Most of these funds are legallybound by donors to be used for
specific purposes namedprofessorships, buildings, niche
(04:46):
research rather thanaffordability or debt relief.
Schools rarely challenge theserestrictions, even when donors
are long deceased.
They prefer this model becauseit allows them to accumulate
wealth without having to lowertuition or restructure finances.
At the same time, the US federalgovernment began guaranteeing
(05:06):
student loans, transferringfinancial risk from institutions
to students and taxpayers.
Universities receive fulltuition up front, no matter what
happens.
In 2024 alone, ivy Leagueschools received $6.4 billion in
federal funding.
The University of Texas systemmanaged $45 billion.
(05:27):
Yet these institutions face noconsequences if students fail to
graduate or repay their loans.
The reason the federalgovernment backs all student
loans and allows universities tocollect payment up front is
deeply political.
The policy was originallyframed as an effort to expand
access to education and promoteequal opportunity.
However, over time, it evolvedinto a mechanism that ensures
(05:51):
consistent revenue foruniversities and financial
institutions.
By assuming the risk, thegovernment enables schools to
raise tuition with impunity,knowing full well that students
can borrow virtually unlimitedsums with no underwriting or
performance requirements.
The arrangement benefits allinstitutional actors Schools get
guaranteed income, lenderscollect interest and the state
(06:13):
earns political capital forquote-unquote investing in
education.
But the student bears theultimate burden, entering the
workforce tethered to a debtthey cannot discharge, even in
bankruptcy.
This model creates perverseincentives Schools are rewarded
for enrolling more students andraising tuition, regardless of
educational outcomes.
It's a business model where theproduct, the degree, is sold
(06:37):
with no performance guaranteeand the consumer, the student,
pays, often for life.
The truth is, it's a PR machineat work.
Universities are no longer justeducational institutions.
They're multi-billion dollarfinancial entities with a vested
interest in maintaining theillusion that their costs, aid
and impacts are fair andjustified.
(06:58):
They actively lobby Congress tomaintain tax breaks, endowment
protection and student loanguarantees, while resisting
calls to democratize education.
There are powerful associationswhose main job is to protect
universities' financial andregulatory interests.
We have the American Council onEducation, ace, the Association
of American Universities, aau,with the National Association of
(07:21):
Independent Colleges andUniversities, the NAICU, and the
National Association of StudentFinancial Aid Administrators,
the NASFAA.
Their primary goals are to actas lobbyists for all types of
colleges and universities whodefend their autonomy, funding
access, who protect federalresearch funding, immigration
(07:41):
policies in their favor, andlobbying around financial aid
policies ensuring a continuedfederal student aid flows,
including grants and loans.
These policies beg the naturalquestion why is tuition largely
unregulated?
Well, it's because universitiessuccessfully argue that
regulating tuition would,quote-unquote, infringe on
(08:04):
academic freedom or damageeducational diversity.
They leverage the myth thathigher education is always a
pure social good, even though itincreasingly functions as an
industry.
Politicians fear backlash.
Many universities are majoremployers and regional economic
anchors.
No senator wants to fight theflagship university in their
(08:26):
state.
Student loan structures shiftrisk away from universities.
Universities get paid up front.
The student carries the debtburden.
The university lobbysuccessfully merges the language
of sacred public good, which iseducation, equality and
opportunity, with the interestsof private capital accumulation,
growth, autonomy and expansion.
(08:46):
Thus attempts at reform getpolitically framed as a tax on
learning, not on business models.
It's a perfect shield.
If you behave like acorporation, competing for
market share, maximizing revenue, offloading risk onto the
public and marketing yourself topaying customers, then you are
a corporation, no matter howmuch sacred language you wrap
(09:08):
yourself in.
The American higher educationsystem isn't just neglected by
regulation.
It is actively defended fromregulation by powerful,
well-funded lobbying effortsdesigned to maintain profit
flows under moral camouflage ofpublic service.
It may not seem like one, butin truth students are
psychologically caught in amanufactured narrative that
(09:30):
college is the only viable pathto success.
From early childhood,standardized education trains us
to believe that not going tocollege equals failure.
This conditioning is reinforcedthrough school counselors,
media portrayals, parentalexpectations and policy
incentives.
College admission is framed asa test of personal value,
especially for elite schools.
(09:51):
Acceptance becomes a symbol ofintelligence, potential and
belonging in a meritocraticsociety.
To reject college often feelslike rejecting your own worth or
future.
Social proof and herd mentalitypush students to conform.
If everyone is doing it, itmust be right.
Few are given the tools toevaluate the long-term debt
(10:11):
implications or the diminishingvalue of many degrees in today's
economy.
Instead, they're sold a dreamor a myth.
College will make you free andeducation is a great equalizer.
Few alternative pathways likevocational training,
entrepreneurship orapprenticeships are valorized.
Challenging the college systemmeans challenging the broader
illusion that success is fairlyearned.
(10:32):
High schools, guidancecounselors, parents and media
all funnel students towardscollege.
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 tobelieve that college was worth
it than to face the idea thatyou were coerced into a lifelong
(10:54):
financial burden.
Degrees have become more aboutsignaling conformity than
acquiring critical skills.
In sociological terms, they areclass markers, gatekeeping
devices that preserve eliteaccess and justify systemic
exclusion.
Many jobs now require a degree,not because it's necessary,
because it's become a filtrationsystem.
(11:15):
Even mediocre salaries aregatekept beyond college
credentials, creating a coercivedependency on higher ed.
Of dependency on higher ed, aremarkable and flagrant
injustice reveals itself wherewe examine wage stagnation
versus tuition inflation.
Since the early 1980s, collegetuition has increased over 1,200
(11:37):
percent, vastly outpacinginflation and wage growth.
According to the College Board,the average cost of attending a
private university in the US nowexceeds $55,000 per year.
By contrast, real wages forcollege graduates have remained
nearly flat.
In the 1970s, a student couldfeasibly work a summer job and
pay tuition.
(11:58):
Today, even with scholarships,most students must take out
substantial loans.
The average student borrowercan graduate with over $100,000
in debt.
This total grows exponentiallywith graduate school or interest
accrual.
And what does that investmentyield?
Many graduates areunderemployed, working jobs that
don't require a degree.
(12:19):
The belief that a diplomaguarantees upward mobility is
increasingly disproven byeconomic data.
The disconnect between cost andvalue is widening, with
students taking on unsustainabledebt for credentials that
deliver diminishing returns.
The core disconnect is thatuniversities are charging based
on prestige inflation while theeconomy pays on market realities
(12:40):
, and the two curves havedecoupled sharply.
There is, however, an argumentfor attending college.
On average, college graduatesearn significantly more over
their lifetimes than thosewithout degrees.
Bachelor's degree holders earnabout 1.2 million more over a
lifetime than high schoolgraduates.
Unemployment rates are alsoconsistently lower for college
(13:02):
graduates.
But the caveat is that this isan average.
It hides massive variation bymajor institution, race, gender
and geography.
In many industries, a degree isno longer about learning.
It's a gatekeeping mechanism.
Employers often use collegedegrees as proxies for work,
ethic, socialization, evencompliance.
Without one, they're oftenlocked out of an entry-level
(13:24):
white-collar role, regardless ofactual skill.
This is systemic coercion, notmerit, but it still reinforces
the need to attend.
College can be a place toexpand worldviews, encounter
diverse perspectives and exploreidentity, values and meaning.
For some, it offers the timeand space to question inherited
beliefs and reorient lifetrajectories.
(13:47):
This is what higher educationshould be about, though it's
increasingly crowded out by debtpressure and workforce prep.
For many, the choice isn'tbetween college and something
better.
It's between college and socialprecarity.
Until vocational paths,apprenticeships and
entrepreneurial pipelines aretruly legitimized and supported,
college remains a default routeto safety, even if it's
(14:10):
exploitative.
The reality, however, is thatthere are more graduates than
high-quality jobs requiringdegrees, especially in the
liberal arts and humanities.
But instead of adjusting thesystem, universities keep
churning out degrees andemployers keep demanding them,
knowing it reduces labor costsand raises competition.
This turns education into azero-sum game.
(14:33):
Credentials rise in price andprestige, but not in actual
power.
Student debt locks graduatesinto systems of labor,
compliance and dependence.
Debt in practice becomes adisciplinary tool.
The debt-based education systemdiscourages risk-taking,
entrepreneurship or activism,since debtors need to repay and
cannot afford instability.
(14:54):
This makes workers moreobedient, while universities
profit from enrollment and banksprofit from interest.
Some might argue that the mostegregious example of
manufacturer scarcity can befound in what we see with
universities who push the scarceadmission as prestige.
The more exclusive a school is,the more it's seen as valuable.
(15:16):
Instead of expanding access,elite universities reject tens
of thousands to inflateselectivity and protect the
brand value.
To inflate selectivity andprotect the brand value, they
could admit more.
They choose not to, becausescarcity equals status and
status equals power.
So the system creates anillusion of necessity and
(15:36):
uniqueness around college whileactively suppressing or
discrediting alternatives.
That's manufactured scarcitylimiting choices to drive demand
, then monetizing the veryaccess it restricts.
The American education system isone of the most overt mirrors
into what we value as a society.
Student debt is a rite ofpassage.
Only in America do young adultsroutinely enter decades-long
(16:00):
debt servitude for the privilegeof basic middle-class access.
In this sense, capital precedescitizenship.
You are worthy not because youexist, but because you are
willing to assume debt for yourfuture productivity.
American students must purchasetheir eligibility to
participate meaningfully in theeconomy.
Everything, even the sacred,must be monetized and scaled.
(16:23):
Market logic infiltrates theeducational structure.
Us universities aggressivelybrand themselves.
They compete by corporationsfor rankings.
They treat students ascustomers.
They prioritize growth,prestige and market share over
actual educational depth.
Many universities operatemassive fundraising campaigns,
(16:43):
luxury campus expansions, sportsfranchises and brand
partnerships.
It's almost an exact parallelto corporate expansion models.
Institutions are free toextract whatever the market will
bear, regardless of long-termsocietal cost.
In most developed nations,higher education is either free,
like in Germany or Nordiccountries, or bare and extremely
(17:06):
low cost, like France andAustria.
Meanwhile, nations like theNetherlands and even South Korea
cap tuition or heavily regulatecosts to protect accessibility.
In many other countries,education is treated as a public
good, something society investsin for the collective health
and future, regardless ofindividual earning potential.
People forget in oldereducational traditions like
(17:29):
Oxford or Bologna, even earlyAmerican liberal arts systems.
Education was originally framedas a preparation for
citizenship, moral reasoning,stewardship of society.
The American university systemdoesn't primarily exist to
cultivate whole, wise humanbeings.
It exists to manufacturemarket-ready participants for
(17:49):
the capitalist machine toextract maximum economic rent.
In the process, where othersocieties still retain vestiges
of education as a birthright ofhuman dignity, the US exposes
education as a commodifiedgateway to social worth.
How a society designs itsschools tells you what it
secretly worships.
In America, universities don'tjust teach capitalism, they are
(18:13):
capitalism dressed in ivy.
What would a fairer model looklike?
Well, you could have outcomecontingent funding, where
universities only receive fulltuition payments if students
earn above a set incomethreshold.
Post-graduation, similar toincome share agreements, there
could be federal loan caps basedon program ROI.
If the average graduate of adegree program earns $30,000 a
(18:34):
year, students shouldn't beallowed to borrow $100,000 for
it.
This creates price disciplineand deters low-value programs.
There could also be universityrisk sharing, where institutions
should be required tocontribute to repayment
insurance pools or co-sign aportion of federal loans.
This gives them skin in thegame.
There definitely should betransparency mandates, which
(18:56):
would require detailed publicreporting on how tuition revenue
and endowment income are spent,especially how much goes to
administration instruction andstudent aid, especially how much
goes to administrationinstruction and student aid.
There ought to be a statewidepush for robust alternatives
Expand public funding forapprenticeships, trade schools
and accredited non-traditionalpathways.
We should decentralize access toopportunity beyond elite
(19:18):
university gates and,undoubtedly, there should be
pricing regulation.
Unlike healthcare utilities oreven mortgage markets, higher
education pricing is almostcompletely unregulated.
There are no laws capping howmuch universities can charge for
tuition fees, room or board.
Why?
Because politically, highereducation was framed as a
(19:38):
private good rather than apublic good.
However, now that universitieshave become predatory
capitalists, there needs to be arevision in understanding.
The inherent problem is thatgovernment itself profits from
student loans.
The US federal government earnsbillions in interest from
student loans.
This reduces incentives to captuition or regulate universities
, because higher tuition meansbigger loans and bigger loans
(20:01):
mean more revenue to thegovernment Government both funds
and profits from the same debtcrisis.
Until these changes occur, weare propping up a system that
functions more like a hedge fund, with classrooms and a public
good.
The question is when does thegovernment stop becoming a
self-serving entity and beginlooking out for the public good,
(20:22):
we were told.
Education was set us free, andin many, many ways it does.
It expands our minds andcreates tremendous opportunity,
but in the shadow of industrialcapitalism, it becomes another
means of extraction.
Capitalism, while capable ofgenerating innovation,
enterprise and empowerment,cannot be allowed to run
(20:42):
unchecked, especially in sectorsthat shape the soul of a nation
.
Education is one of thosesacred spaces, but that space
has been corrupted by the veryinstitutions that claim to
protect it.
What we're witnessing is notjust a misalignment of
priorities.
It is a coordinated siphoningof public promise into private
gain.
Universities protect theirinvestments, the government
(21:05):
shields those institutions, andstudents, often barely adults,
are left footing the bill for asystem designed to profit off
their aspiration.
The endowment class, corporatefinanciers and policymakers have
built a revolving door ofprivilege funded by debtors who
can't declare bankruptcy andcan't opt out.
This is not accidental.
(21:26):
It is systemic capitalist rotmasquerading as educational
opportunity, and if we don'tconfront the corrosive power
dynamic between universities,government policy and capital,
we risk further entrenching anacademic caste system that feeds
on the future of everygeneration.
As you continue listening to theManhattan Prophet podcast, I'm
(21:47):
going to unveil the true natureof 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 cangrow together and evolve.
I'm going to provide you withreal-world ways to touch higher
levels of consciousness andunderstanding through truth and
knowledge.
Episodes are updated weekly.
If you believe and want tochange your world for the better
(22:08):
and support this evolution ofconsciousness, please show me by
following and sharing thispodcast 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 upand master your universe.
Hello everyone and welcome back to the Manhattan
Prophet podcast.
I am the Manhattan Prophet.
As a reminder, I'm here toensure that all knowledge I give
you finds meaning in apractical place in your everyday
lives.
It's only through properlydigesting knowledge, in this
case of ourselves and the worldaround us, we see things clearly
enough to break old patterns ofbehavior and to get a new path
forward to a heightened state ofconsciousness.
(00:26):
Today we're cutting through thepolished brochures and
ivy-covered illusions to exposethe 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
(00:47):
students were saddled withcrushing lifelong debt.
We'll explore how theseinstitutions, often operating
more like hedge funds thanplaces of learning, have chosen
a model of tax-sheltered wealthaccumulation over universal
affordability.
And we'll confront the growingdisconnect between the promised
value of a college degree andthe financial reality that
awaits graduates, where wagesoften fail to match the costs of
(01:11):
the diploma, leaving millionsquestioning whether the
so-called investment ineducation was ever meant to pay
off.
We're stepping into the heartof the system that promised
liberation but instead deliveredlifelong debt.
The US education system as weknow it was modeled after the
Prussian model in the 19thcentury structured, standardized
(01:31):
and designed to produceobedient, punctual and efficient
workers for factories andbureaucracies.
This model was perfect theindustrial capitalist age, and
as industrialists grew in power,they began shaping curricula,
funding universities andadvocating for uniform testing
as a way to measure merit.
Historically, education,especially in classical liberal
(01:53):
traditions, was conceived as anend in itself.
It aimed to cultivate moralreasoning, civic engagement and
the pursuit of truth.
Thinkers from Socrates to JohnDewey emphasized that education
should develop the whole person,intellectually, ethically and
spiritually.
It was not transactional, itwas formative.
In many ways it was sacred.
(02:15):
That changed with the rise ofindustrial capitalism, which
reframed education as a means toan end, specifically economic
productivity.
Knowledge became job training,learning became credentialism.
The goal shifted fromenlightenment to employment.
Universities transformed fromsanctuaries of inquiry into
(02:36):
supply chains for labor markets.
Standardized tests like the SAT,act and GRE prioritize
analytical reasoning, patternrecognition and compliance under
time pressure.
These mirror traits idealizedby the industrial capitalist
model obedience, efficiency andhierarchy.
They do not measure creativity,emotional intelligence or
(03:00):
collaboration, according toHoward Gardner's theory of
multiple intelligences, orcollaboration.
According to Howard Gardner'stheory of multiple intelligences
, these tests only assess twotypes, linguistic and
logical-mathematical, ignoringothers like spatial,
interpersonal orbodily-kinesthetic intelligence.
Gardner's work, along withempirical studies like those
using the TEAL inventory ofmultiple intelligences,
(03:20):
demonstrates that students'strong and non-traditional
intelligences often underperformon standardized tests despite
thriving in other areas oflearning.
Further, researchers likeAngela Duckworth and James
Heckman have shown thatnon-cognitive skills, grip,
emotional regulation,adaptability are more predictive
of success than IQ or testscores.
(03:42):
Yet these metrics are not onlyignored in standardized testing,
they are actively undermined bya system that values obedience
over originality.
In the late 20th century,universities transformed into
financialized institutions withbillion-dollar endowments and
investment portfolios.
Harvard, yale, stanford andPrinceton now manage endowments
(04:04):
exceeding $30 billion each.
Harvard alone sits on over $53billion.
These endowments are investedin private equity, hedge funds
and real estate portfolios andare managed like Wall Street
funds.
Despite their scale,universities spend just 4-5% of
their endowment annually, citingdonor restrictions of their
(04:25):
endowment annually.
Citing donor restrictions.
Let's look at the respectivesizes of financial aid given.
Harvard University gave astaggeringly low $250 million in
aid.
Yale University $200 million inaid.
Princeton $212 million in aid.
Most of these funds are legallybound by donors to be used for
specific purposes namedprofessorships, buildings, niche
(04:46):
research rather thanaffordability or debt relief.
Schools rarely challenge theserestrictions, even when donors
are long deceased.
They prefer this model becauseit allows them to accumulate
wealth without having to lowertuition or restructure finances.
At the same time, the US federalgovernment began guaranteeing
(05:06):
student loans, transferringfinancial risk from institutions
to students and taxpayers.
Universities receive fulltuition up front, no matter what
happens.
In 2024 alone, ivy Leagueschools received $6.4 billion in
federal funding.
The University of Texas systemmanaged $45 billion.
(05:27):
Yet these institutions face noconsequences if students fail to
graduate or repay their loans.
The reason the federalgovernment backs all student
loans and allows universities tocollect payment up front is
deeply political.
The policy was originallyframed as an effort to expand
access to education and promoteequal opportunity.
However, over time, it evolvedinto a mechanism that ensures
(05:51):
consistent revenue foruniversities and financial
institutions.
By assuming the risk, thegovernment enables schools to
raise tuition with impunity,knowing full well that students
can borrow virtually unlimitedsums with no underwriting or
performance requirements.
The arrangement benefits allinstitutional actors Schools get
guaranteed income, lenderscollect interest and the state
(06:13):
earns political capital forquote-unquote investing in
education.
But the student bears theultimate burden, entering the
workforce tethered to a debtthey cannot discharge, even in
bankruptcy.
This model creates perverseincentives Schools are rewarded
for enrolling more students andraising tuition, regardless of
educational outcomes.
It's a business model where theproduct, the degree, is sold
(06:37):
with no performance guaranteeand the consumer, the student,
pays, often for life.
The truth is, it's a PR machineat work.
Universities are no longer justeducational institutions.
They're multi-billion dollarfinancial entities with a vested
interest in maintaining theillusion that their costs, aid
and impacts are fair andjustified.
(06:58):
They actively lobby Congress tomaintain tax breaks, endowment
protection and student loanguarantees, while resisting
calls to democratize education.
There are powerful associationswhose main job is to protect
universities' financial andregulatory interests.
We have the American Council onEducation, ace, the Association
of American Universities, aau,with the National Association of
(07:21):
Independent Colleges andUniversities, the NAICU, and the
National Association of StudentFinancial Aid Administrators,
the NASFAA.
Their primary goals are to actas lobbyists for all types of
colleges and universities whodefend their autonomy, funding
access, who protect federalresearch funding, immigration
(07:41):
policies in their favor, andlobbying around financial aid
policies ensuring a continuedfederal student aid flows,
including grants and loans.
These policies beg the naturalquestion why is tuition largely
unregulated?
Well, it's because universitiessuccessfully argue that
regulating tuition would,quote-unquote, infringe on
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academic freedom or damageeducational diversity.
They leverage the myth thathigher education is always a
pure social good, even though itincreasingly functions as an
industry.
Politicians fear backlash.
Many universities are majoremployers and regional economic
anchors.
No senator wants to fight theflagship university in their
(08:26):
state.
Student loan structures shiftrisk away from universities.
Universities get paid up front.
The student carries the debtburden.
The university lobbysuccessfully merges the language
of sacred public good, which iseducation, equality and
opportunity, with the interestsof private capital accumulation,
growth, autonomy and expansion.
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Thus attempts at reform getpolitically framed as a tax on
learning, not on business models.
It's a perfect shield.
If you behave like acorporation, competing for
market share, maximizing revenue, offloading risk onto the
public and marketing yourself topaying customers, then you are
a corporation, no matter howmuch sacred language you wrap
(09:08):
yourself in.
The American higher educationsystem isn't just neglected by
regulation.
It is actively defended fromregulation by powerful,
well-funded lobbying effortsdesigned to maintain profit
flows under moral camouflage ofpublic service.
It may not seem like one, butin truth students are
psychologically caught in amanufactured narrative that
(09:30):
college is the only viable pathto success.
From early childhood,standardized education trains us
to believe that not going tocollege equals failure.
This conditioning is reinforcedthrough school counselors,
media portrayals, parentalexpectations and policy
incentives.
College admission is framed asa test of personal value,
especially for elite schools.
(09:51):
Acceptance becomes a symbol ofintelligence, potential and
belonging in a meritocraticsociety.
To reject college often feelslike rejecting your own worth or
future.
Social proof and herd mentalitypush students to conform.
If everyone is doing it, itmust be right.
Few are given the tools toevaluate the long-term debt
(10:11):
implications or the diminishingvalue of many degrees in today's
economy.
Instead, they're sold a dreamor a myth.
College will make you free andeducation is a great equalizer.
Few alternative pathways likevocational training,
entrepreneurship orapprenticeships are valorized.
Challenging the college systemmeans challenging the broader
illusion that success is fairlyearned.
(10:32):
High schools, guidancecounselors, parents and media
all funnel students towardscollege.
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 tobelieve that college was worth
it than to face the idea thatyou were coerced into a lifelong
(10:54):
financial burden.
Degrees have become more aboutsignaling conformity than
acquiring critical skills.
In sociological terms, they areclass markers, gatekeeping
devices that preserve eliteaccess and justify systemic
exclusion.
Many jobs now require a degree,not because it's necessary,
because it's become a filtrationsystem.
(11:15):
Even mediocre salaries aregatekept beyond college
credentials, creating a coercivedependency on higher ed.
Of dependency on higher ed, aremarkable and flagrant
injustice reveals itself wherewe examine wage stagnation
versus tuition inflation.
Since the early 1980s, collegetuition has increased over 1,200
(11:37):
percent, vastly outpacinginflation and wage growth.
According to the College Board,the average cost of attending a
private university in the US nowexceeds $55,000 per year.
By contrast, real wages forcollege graduates have remained
nearly flat.
In the 1970s, a student couldfeasibly work a summer job and
pay tuition.
(11:58):
Today, even with scholarships,most students must take out
substantial loans.
The average student borrowercan graduate with over $100,000
in debt.
This total grows exponentiallywith graduate school or interest
accrual.
And what does that investmentyield?
Many graduates areunderemployed, working jobs that
don't require a degree.
(12:19):
The belief that a diplomaguarantees upward mobility is
increasingly disproven byeconomic data.
The disconnect between cost andvalue is widening, with
students taking on unsustainabledebt for credentials that
deliver diminishing returns.
The core disconnect is thatuniversities are charging based
on prestige inflation while theeconomy pays on market realities
(12:40):
, and the two curves havedecoupled sharply.
There is, however, an argumentfor attending college.
On average, college graduatesearn significantly more over
their lifetimes than thosewithout degrees.
Bachelor's degree holders earnabout 1.2 million more over a
lifetime than high schoolgraduates.
Unemployment rates are alsoconsistently lower for college
(13:02):
graduates.
But the caveat is that this isan average.
It hides massive variation bymajor institution, race, gender
and geography.
In many industries, a degree isno longer about learning.
It's a gatekeeping mechanism.
Employers often use collegedegrees as proxies for work,
ethic, socialization, evencompliance.
Without one, they're oftenlocked out of an entry-level
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white-collar role, regardless ofactual skill.
This is systemic coercion, notmerit, but it still reinforces
the need to attend.
College can be a place toexpand worldviews, encounter
diverse perspectives and exploreidentity, values and meaning.
For some, it offers the timeand space to question inherited
beliefs and reorient lifetrajectories.
(13:47):
This is what higher educationshould be about, though it's
increasingly crowded out by debtpressure and workforce prep.
For many, the choice isn'tbetween college and something
better.
It's between college and socialprecarity.
Until vocational paths,apprenticeships and
entrepreneurial pipelines aretruly legitimized and supported,
college remains a default routeto safety, even if it's
(14:10):
exploitative.
The reality, however, is thatthere are more graduates than
high-quality jobs requiringdegrees, especially in the
liberal arts and humanities.
But instead of adjusting thesystem, universities keep
churning out degrees andemployers keep demanding them,
knowing it reduces labor costsand raises competition.
This turns education into azero-sum game.
(14:33):
Credentials rise in price andprestige, but not in actual
power.
Student debt locks graduatesinto systems of labor,
compliance and dependence.
Debt in practice becomes adisciplinary tool.
The debt-based education systemdiscourages risk-taking,
entrepreneurship or activism,since debtors need to repay and
cannot afford instability.
(14:54):
This makes workers moreobedient, while universities
profit from enrollment and banksprofit from interest.
Some might argue that the mostegregious example of
manufacturer scarcity can befound in what we see with
universities who push the scarceadmission as prestige.
The more exclusive a school is,the more it's seen as valuable.
(15:16):
Instead of expanding access,elite universities reject tens
of thousands to inflateselectivity and protect the
brand value.
To inflate selectivity andprotect the brand value, they
could admit more.
They choose not to, becausescarcity equals status and
status equals power.
So the system creates anillusion of necessity and
(15:36):
uniqueness around college whileactively suppressing or
discrediting alternatives.
That's manufactured scarcitylimiting choices to drive demand
, then monetizing the veryaccess it restricts.
The American education system isone of the most overt mirrors
into what we value as a society.
Student debt is a rite ofpassage.
Only in America do young adultsroutinely enter decades-long
(16:00):
debt servitude for the privilegeof basic middle-class access.
In this sense, capital precedescitizenship.
You are worthy not because youexist, but because you are
willing to assume debt for yourfuture productivity.
American students must purchasetheir eligibility to
participate meaningfully in theeconomy.
Everything, even the sacred,must be monetized and scaled.
(16:23):
Market logic infiltrates theeducational structure.
Us universities aggressivelybrand themselves.
They compete by corporationsfor rankings.
They treat students ascustomers.
They prioritize growth,prestige and market share over
actual educational depth.
Many universities operatemassive fundraising campaigns,
(16:43):
luxury campus expansions, sportsfranchises and brand
partnerships.
It's almost an exact parallelto corporate expansion models.
Institutions are free toextract whatever the market will
bear, regardless of long-termsocietal cost.
In most developed nations,higher education is either free,
like in Germany or Nordiccountries, or bare and extremely
(17:06):
low cost, like France andAustria.
Meanwhile, nations like theNetherlands and even South Korea
cap tuition or heavily regulatecosts to protect accessibility.
In many other countries,education is treated as a public
good, something society investsin for the collective health
and future, regardless ofindividual earning potential.
People forget in oldereducational traditions like
(17:29):
Oxford or Bologna, even earlyAmerican liberal arts systems.
Education was originally framedas a preparation for
citizenship, moral reasoning,stewardship of society.
The American university systemdoesn't primarily exist to
cultivate whole, wise humanbeings.
It exists to manufacturemarket-ready participants for
(17:49):
the capitalist machine toextract maximum economic rent.
In the process, where othersocieties still retain vestiges
of education as a birthright ofhuman dignity, the US exposes
education as a commodifiedgateway to social worth.
How a society designs itsschools tells you what it
secretly worships.
In America, universities don'tjust teach capitalism, they are
(18:13):
capitalism dressed in ivy.
What would a fairer model looklike?
Well, you could have outcomecontingent funding, where
universities only receive fulltuition payments if students
earn above a set incomethreshold.
Post-graduation, similar toincome share agreements, there
could be federal loan caps basedon program ROI.
If the average graduate of adegree program earns $30,000 a
(18:34):
year, students shouldn't beallowed to borrow $100,000 for
it.
This creates price disciplineand deters low-value programs.
There could also be universityrisk sharing, where institutions
should be required tocontribute to repayment
insurance pools or co-sign aportion of federal loans.
This gives them skin in thegame.
There definitely should betransparency mandates, which
(18:56):
would require detailed publicreporting on how tuition revenue
and endowment income are spent,especially how much goes to
administration instruction andstudent aid, especially how much
goes to administrationinstruction and student aid.
There ought to be a statewidepush for robust alternatives
Expand public funding forapprenticeships, trade schools
and accredited non-traditionalpathways.
We should decentralize access toopportunity beyond elite
(19:18):
university gates and,undoubtedly, there should be
pricing regulation.
Unlike healthcare utilities oreven mortgage markets, higher
education pricing is almostcompletely unregulated.
There are no laws capping howmuch universities can charge for
tuition fees, room or board.
Why?
Because politically, highereducation was framed as a
(19:38):
private good rather than apublic good.
However, now that universitieshave become predatory
capitalists, there needs to be arevision in understanding.
The inherent problem is thatgovernment itself profits from
student loans.
The US federal government earnsbillions in interest from
student loans.
This reduces incentives to captuition or regulate universities
, because higher tuition meansbigger loans and bigger loans
(20:01):
mean more revenue to thegovernment Government both funds
and profits from the same debtcrisis.
Until these changes occur, weare propping up a system that
functions more like a hedge fund, with classrooms and a public
good.
The question is when does thegovernment stop becoming a
self-serving entity and beginlooking out for the public good,
(20:22):
we were told.
Education was set us free, andin many, many ways it does.
It expands our minds andcreates tremendous opportunity,
but in the shadow of industrialcapitalism, it becomes another
means of extraction.
Capitalism, while capable ofgenerating innovation,
enterprise and empowerment,cannot be allowed to run
(20:42):
unchecked, especially in sectorsthat shape the soul of a nation
.
Education is one of thosesacred spaces, but that space
has been corrupted by the veryinstitutions that claim to
protect it.
What we're witnessing is notjust a misalignment of
priorities.
It is a coordinated siphoningof public promise into private
gain.
Universities protect theirinvestments, the government
(21:05):
shields those institutions, andstudents, often barely adults,
are left footing the bill for asystem designed to profit off
their aspiration.
The endowment class, corporatefinanciers and policymakers have
built a revolving door ofprivilege funded by debtors who
can't declare bankruptcy andcan't opt out.
This is not accidental.
(21:26):
It is systemic capitalist rotmasquerading as educational
opportunity, and if we don'tconfront the corrosive power
dynamic between universities,government policy and capital,
we risk further entrenching anacademic caste system that feeds
on the future of everygeneration.
As you continue listening to theManhattan Prophet podcast, I'm
(21:47):
going to unveil the true natureof 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 cangrow together and evolve.
I'm going to provide you withreal-world ways to touch higher
levels of consciousness andunderstanding through truth and
knowledge.
Episodes are updated weekly.
If you believe and want tochange your world for the better
(22:08):
and support this evolution ofconsciousness, please show me by
following and sharing thispodcast 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 upand master your universe.
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