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Exposes the intimate relationship between big finance and higher education inequality in America.

A review of the book by the same name written by Charlie Eaton (professor of sociology at the UC Merced) It is hard to overstate how important this private equity invasion was in the explosion of enrollment at predatory for-profit colleges in the U.S.—colleges that overwhelmingly left students with crushing debts and no economic benefits. So, in sum, private equity investors oversaw much of the growth in for-profit colleges that sucked up federal student loans and other subsidies. They sucked up direct government/public dollars through private for-profit colleges, and now the private equity firms are attempting to suck up the IP from NFPs and commoditize the exam questions to hoover up related revenue for their private benefit.

Charlie Eaton, a sociology professor at the University of California, Merced and the author of Bankers in the Ivory Tower, said the Nexus acquisition and ACT’s interest in alternative degree pathways is concerning in part because the credential space is ripe for exploitation.

“We don’t know a lot about private equity’s plans for the testing industry, but we know how it transformed other education sectors,” he said. The potential here to take a trusted brand like the ACT and use it to launder more predatory business models is very concerning to me.”

Dominique Baker, an associate education professor at the University of Delaware and a former admissions dean at the University of Virginia.

“I could see a world where the profit motives create some issues,” she said… when we see private equity and venture capital move in this way, they are looking at exponential profit almost at all costs.”

Benjamin Shestakofsky, a sociologist at the University of Pennsylvania and the author of “Behind the Startup: How Venture Capital Shapes Work, Innovation, and Inequality.”

“It’s important to remember that this is an organization that’s transforming a nonprofit with a social purpose to what is ultimately an asset in a portfolio,”

he said.

Randi Weingarten, President The American Federation of Teachers, ACT's new structure has created “incentives for misconduct.”

“The ACT has become a public good, relied upon by millions of students to realize their college dreams,”

“That’s why it’s inappropriate for such a significant educational tool to be run by a profiteering private equity fund.”

Marie Bigham founded a college admissions advocacy group before starting a tech company a few years ago. Since working in the tech start-up space, she has learned a lot about the cutthroat tactics of some private equity firms. When she first learned about the ACT acquisition, she was concerned.

Janet Godwin, CEO ACT Nexus Ms. Godwin is misleading the public and the education sector by repeatedly claiming the new for-profit version of ACT will be the same as the prior 65-years as a not-for-profit. This is a legal and logical impossibility.

“We are not veering an inch from our mission,”

Private Equity in Education: The article discusses how private equity firms are increasingly interested in not-for-profit educational organizations because the private-for-profit corporation can engage in certain business practices that ACT nfp could not, hence the shift to a for-profit model to allow the private corporation extract profits. The acquisition of ACT nfp is an example of these trends, where Educational tools like standardized tests and their prep become "trophies" for investment portfolios.

Claims that they will continue the same NFP mission as the prior 65-years.

After Nexus Capital Management’s purchase of ACT nfp, it is logically and legally impossible for the new, for-profit entity to continue the prior not-for-profit mission. Logical impossibility: The mission statement she is pledging to continue and that she claims will remain UNCHANGED states:

"ACT is a mission-driven nonprofit organization. Our insights unlock potential and create solutions for K-12 education, college, and career readiness."

It is impossible for ACT Nexus to continue the ACT nfp’s mission statement because their mission statement was centered on being a NON-PROFIT. A for-profit, private equity firm cannot continue the core mission statement of being a nonprofit! Legal Impossibility and Federal Trade Commission Act (fraud): If Nexus were to follow the ACT mission statement (like they have pledged) they would commit fraud against their investors. They cannot serve two masters. They must either serve a public interest or a private profit interest; they CANNOT serve both. Since they are now a private for-profit company, they MUST serve the profit interest, and therefore, their claim that nothing has changed and they are continuing to operate under the same NFP mission is an unfair and deceptive act that violates the Federal Trade Commission Act and is misleading the market, their investors, and the general public. ACT Nexus is most assuredly not the same as ACT nfp. Here is the heart of this lawsuit. As a for-profit corporation, they MUST increase revenues. Nexus desperately wants to stop all other providers from using retired exam questions in order to eliminate competition and then enter schools and the general public as the ONLY viable ACT prep.

Quotes from Janet Godwin that ACT Nexus is remaining the same and continuing the prior NFP mission:

“The only thing that’s changing is our tax ID,” she said. “We are still the same ACT that people know and trust.” Click here

“ACT will always be driven by our mission, and this investment will allow us to accelerate delivery of impact solutions that are core to who we are — and always have been — including expanding access and opportunity for students,” Click here

“The need to prepare learners for success after high school for both college and work has never been higher, nor has the need to ensure that every learner has access to equitable college and career planning resources, guidance, and insights. Click here

“We are not veering an inch from our mission,” Click here

“The need has never been higher to ensure that EVERY LEARNER has equitable access to college (and ACT Prep)”
“Our ACT nfp mission will not change and that includes expanding access (to the ACT exam and prep) for students” Click here

“We remain committed to our mission and will do everything we can to ensure students have every opportunity to achieve success.” Click here

“ACT will renew and deepen its commitment to equity, access, and opportunity for all as it realizes these strategic pillars. Changing demographics demand that colleges and employers seek and engage a population that is increasingly diverse and mostly from low-income households. Our vision and aligned work will create solutions for a world of evolving opportunities and provide more support for learners to chart pathways toward greater mobility and economic prosperity.” Click here

“The ACT has become a public good, relied upon by millions of students to realize their college dreams. That’s why it’s inappropriate for such a significant educational tool to be run by a profiteering private equity fund.”

— Randi Weingarten, president of the American Federation of Teachers

From article: Private Equity Takes Over ACT: What Tutors Need to Know About ACT's Shift to For-Profit Click here
June 25, 2024

ACT Scores at 30 Year Low: The average ACT composite score has been on a downward trend. For instance, the class of 2023 had an average score of 19.5, which is the lowest average since 1991, marking six consecutive years of declines in average scores.  Click here

Fewer students are meeting the ACT's college readiness benchmarks. In 2023, only 21% of students met all four benchmarks (English, math, reading, and science), while 43% did not meet any, which was a record high for the latter category. Even the ACT, Inc. CEO stated that this is, “a worrisome trend that began long before ...Covid..., and has persisted.” ACT CEO Janet Godwin.  Click here