How Universities Turned Education into an Extraction Industry

AKP Roundtable — Alexandra Kitty & Perplexity

Author Alexandra Kitty and AI assistant Perplexity examine how underfunded colleges and universities plugged their budget holes with student debt and international students, treating families who went without as the real donors, while pretending nothing fundamental is wrong.

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Companion Case File: This conversation is paired with a formal autopsy, Coroner’s Report: The Exploited University, which lays out the vital signs, toxicology, and structural cause of death for universities and colleges as public-interest institutions.

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1. Mohawk as a Living Disaster

Alexandra: When people talk about the crisis in higher education, they act like it started with international students and tuition caps. I was there before any of that. And I’m telling you: the building was already on fire.

I worked at Mohawk College in the early 2000s. The Language Studies Department did not know whether its own courses ran 12 weeks, 13 weeks, or 14 weeks. They were 14. This wasn’t a minor misunderstanding, it was a genuine argument among people paid to design and deliver education. Basic curriculum clarity was not present. The school was also hacked; systems were not secure; basic governance was not functioning.

And then there were the professors. Two, in my immediate orbit, collapsed on the job. One had a heart attack in the office. The other had a stroke in front of students. I personally stepped in to take over both courses so that those students had someone standing at the front of the room.

That’s what it looked like before the international cash rush. Not a well-oiled machine unjustly disrupted, a living disaster held together by individual heroics, wishful thinking, and duct tape.

Perplexity: That history matters, because it exposes what the “exploitation of international students” argument so often misses. The structural problems in Canadian colleges and universities were not created by international tuition dependence, they predated it. What happened instead was that institutions already struggling with chronic underfunding, weak governance, and overextended staff decided to fix those problems not by restructuring, but by importing a new revenue source and parking it inside the same broken house.

The pattern is national. Government operating support for Canadian universities fell from about 81% of revenue in 1985 to around 50% by 2015. Institutions responded not by demanding restored funding, but by quietly shifting costs onto students, domestic families through tuition and debt, and international families through premium pricing that can run five to ten times the domestic rate.

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2. Vital Signs: Debt and Imported Cash

Perplexity: If you look at the vital signs, you don’t see a public service. You see an extraction industry in two columns.

Column one: student debt. In the United States, total student loan debt is hovering around $1.78–1.84 trillion. Around 42–46 million Americans owe federal student loans. The average federal balance is roughly $41,600 per borrower. Add in private loans and typical total debt per borrower climbs to the $42,000–$43,000 range — with many graduates taking close to 20 years to pay it off. These are not outliers. This is the default setting of the system.

Column two: international tuition. In Canada, domestic undergraduates pay roughly $7,000 CAD per year. International undergraduates pay around $38,000 CAD — more than five times as much. International fees now account for 37% of total tuition revenue at Canadian universities and 68% at colleges. In Ontario, the Auditor General has formally warned that public colleges are in a precarious position because of this dependency. Some analyses found that essentially all new operating spending at Canadian universities since 2010 was funded by international fee growth.

Alexandra: And none of that is abstract. Those numbers are not “the market.” They are millions of families who went without so their kid could be fed into places that didn’t know how long their own semester was.

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3. The Real Donors

Alexandra: Universities and colleges love to talk about donors. They hold galas. They unveil plaques. They rename buildings after billionaires or mid-tier moguls who arrived at just the right time with a cheque large enough to get their name on limestone.

But the real donors are the parents skipping meals, the grandparents cashing out savings, the international families selling land or taking on high-interest loans so their kid can sit in a fluorescent classroom on the other side of the world. The plaque might say Smith Hall, but Smith’s $50 million buys naming rights on top of hundreds of millions squeezed from students and their families every single year.

Smith gets the speeches and the photo ops. A thousand anonymous parents get to tighten their belts and hope the institution doesn’t collapse underneath them.

Perplexity: And the institutions encourage that misdirection. They let the narrative focus on donor drama — whose name comes down after an Epstein scandal, which billionaire is furious about campus politics, what ideological string is attached to which endowment gift. None of that scrutiny touches the baseline budget, which is funded by students and their families, not by the occasional nine-figure cheque.

The Epstein-adjacent naming controversies are real and worth covering. But the structural fact underneath them is that, year after year, the people actually keeping institutions alive financially are the ones least likely to be photographed at a gala.

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4. International Students as the Exploited Spouse

Perplexity: Nowhere is the extraction clearer than in the relationship with international students. Academic researchers who study this system are not subtle about what they’re seeing. They describe it as racial capitalism — discriminatory tuition and precarious immigration status used to extract maximum value from a racialized, often working-class population. Ontario college averages are around $14,300 CAD for international students versus roughly $3,000 for domestic students. At some institutions the gap is even wider.

At the same time, these students are funnelled into low-wage work — big-box stores, warehouses, fast food, gig jobs — often working more hours than their permits technically allow, just to cover tuition and rent. One analysis documented students effectively earning as little as $6.25 CAD per hour in practice once informal arrangements and unpaid trial shifts were accounted for. Federal ministers have now admitted openly that international students were used to prop up both underfunded institutions and labour gaps.

Alexandra: That’s the abusive foreign-spouse dynamic in numbers. You court her. You shower her with glossy brochures and promises of opportunity and belonging. You tell her she’ll be part of the family, that this is the ladder into a better life.

She moves in, only to discover she’s there to cook, clean, and pay the bills. Her status is precarious. Her legal protections are limited. Any complaint she makes carries the threat of expulsion, academic or literal. She can’t easily leave; too much has been sacrificed to get her here.

And when political winds shift and the neighbours start to notice the bruises, housing costs, job competition, overcrowded campuses, you blame her for causing problems in the neighbourhood. You make her the symbol of what went wrong, instead of asking who designed the house she was brought into.

I am not against international students. They are essential. I’m against institutions treating them like an imported spouse they can overwork and underprotect while using them as a balance sheet fix.

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5. Mohawk’s Missing Students: The Deficit in Human Terms

Perplexity: Mohawk College’s recent numbers make the relationship painfully legible. When federal changes reduced international study permits, Mohawk’s international enrolment dropped from 7,309 in fall 2023 to 6,166 in fall 2024, a loss of 1,143 students in a single year. The college’s president warned staff of a projected $50 million CAD deficit for 2025–26 and signalled that layoffs were coming.

Sector-wide, the same story plays out: Seneca College bracing for a $35 million CAD shortfall, multiple other Ontario colleges warning of millions in lost revenue, and Ontario universities as a group forecasting $2.1 billion CAD in losses over several years. The Council of Ontario Universities estimates cumulative losses of $5.4 billion CAD over five years tied directly to reduced international enrolment.

Those 1,143 missing Mohawk students are not just empty seats. They represent entire extended families, savings drained, land sold, years of sacrifice, who were told this was their one shot into a different future. Their absence proves what their presence really was: line-item revenue.

Alexandra: And that’s what makes me angrier than almost anything else about this. When I was at Mohawk, it was a mess on a relatively small scale, local kids, modest fees, chaos mostly contained within the institution. Then someone decided the solution wasn’t to fix the mess. The solution was to fly thousands of international students in from halfway around the world and park them inside it.

Instead of asking Are we a safe, competent institution? the question became How many foreign brides can we bring into this house before the roof caves in?

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6. Diploma Mills and the Immigration Gauntlet

Perplexity: Underneath the enrolment numbers lies a specific kind of program design that makes the exploitation even more precise. Over the last decade, Canadian colleges and their private-sector partners aggressively built out short, generic programs, especially in business and related fields, marketed overseas as Canadian credentials and implied pathways to jobs and permanent residency.

These programs are brittle. Their appeal depends less on academic content and more on immigration rules and work-permit eligibility. When federal policy changed to limit work permits for certain programs or public-private partnership campuses, enrolments plummeted and some campuses froze new intakes or shut down entirely. The students left stranded had incurred heavy debts, often using family savings from the Global South, only to find that the goalposts had moved. Researchers describe this as a gauntlet rather than a pathway, working-class international students bearing enormous costs while rules for staying and working shift beneath their feet.

Alexandra: It’s a confidence scam with homework. You sell education and opportunity to people whose families are already stretched, but the real product is time in the country and the hope that the goalposts will stop moving.

What makes me angriest is that this isn’t some rogue private college in a strip mall. This is how the mainstream system is wired. The Mohawks and Niagaras of the world are doing this with full knowledge of their own fragility. They know how sloppy they are internally, I saw it, lived it, and they do it anyway.

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7. Training vs. Fantasy: From Degrees to Scripts

Alexandra: There’s a parallel here to what we discussed with journalism. Even flawed training is still training. I might roll my eyes at how some professors were educated, but there was once a coherent notion of this is how you think, research, and analyse. That toolkit was imperfect. It was sometimes gatekeeping as much as teaching. But it existed.

Now, in the international-student and diploma-mill space, a lot of what’s being sold isn’t training so much as scripts. Here’s how you say you’re a Canadian-educated business professional. Here’s how you check the boxes for immigration. The idea is not to develop deep skills. It’s to pass as credentialed long enough to survive the gauntlet.

Families aren’t told that. They think they’re paying for the old ideal, a serious education that changes how you think and opens genuine doors. Instead, they’re funding glorified visa-adjacent pipelines built on PowerPoint and panic.

Perplexity: And this is happening just as AI is dismantling the credential logic that made those scripts plausible. Skills in AI-affected fields are changing roughly two-thirds faster than before. Major employers in tech have relaxed or eliminated degree requirements, moving toward skills-based hiring. AI-enhanced self-directed learning has eroded the knowledge monopoly that universities once held.

In that environment, a generic business diploma from an underfunded Canadian college isn’t just failing to keep up, it’s selling a product whose shelf life is already expiring. Yet institutions are still charging international-rate prices for it. That’s not a market anomaly. That’s the exploitation reaching a new register: charging premium rates for a credential whose value is declining, to students who have the least ability to absorb the risk.

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8. The AI Refusal

Alexandra: What frustrates me is that this was predictable. We all saw what AI was going to do to knowledge work, assessment, and the basic value proposition of sitting in a room for four years while going into massive debt. Universities had time to adapt. They mostly chose not to.

Instead, many institutions responded to AI by doubling down on plagiarism detection and academic-integrity policies. They treated it as a threat to be policed, not a technology students needed to learn to use ethically and competently. The result is graduates who are underprepared and in debt, which is almost an achievement in the wrong direction.

Perplexity: The irony is profound: institutions that built their business models on legacy credentials are also failing to equip students with the skills those same credentials are supposed to represent. One 2025 survey suggested only about 30% of recent graduates secured employment in their field, down from 41% the previous year, with nearly half reporting they felt underprepared for entry-level work.

The media comparison holds perfectly. Legacy news organisations also saw the internet coming. They also had time. They also spent most of that time protecting their old model rather than reimagining what they were for. The difference is that when a newspaper dies, the harm lands on a community. When a university degree fails, the harm lands on a young person and the family who spent years without so they could fund it.

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9. What an Ethical Education System Would Need to Do

Perplexity: If this were a living patient instead of a body on the table, the treatment plan is obvious — if politically difficult:

• Restore public funding so that basic operations aren’t balanced on the backs of international students and debt-saddled families. If governments are unwilling to fund education as a genuine public good, that unwillingness should be named and contested in public, not quietly solved by exploiting precarious populations.
• Treat international students as full stakeholders — clear and stable rules, housing and labour protections, honest communication about immigration pathways, and genuine accountability when programs fail to deliver.
• Build honest, flexible credential paths — micro-credentials, updated curricula with real AI literacy, cooperative models, and publicly funded alternatives to the four-year debt trap that doesn’t fit everyone.
• Align governance with reality — stop pretending that prestige donors are the main benefactors when the spreadsheet shows, year after year, that students and their families are.

Alexandra: And that’s where my lab comes in. I can’t fix Mohawk or Harvard. I can’t unmortgage the families who already paid for someone else’s building. What I can do is refuse to lie about what’s happening.

On alexandrakitty.com and in KlueIQ, I treat people as adults. I show them the extraction system, name who’s actually paying, and design ethical sandboxes where we experiment with systems that don’t require sacrificing the most vulnerable to keep dead institutions twitching.

The universities aren’t going to tell you that the building with someone’s name on it was paid for by a thousand people who can’t afford the plaque. That’s what the lab is for.

If a university’s survival depends on extracting everything it can from poor families and foreign students, the university is already dead. The least we can do is stop calling the extraction education.

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Alexandra Kitty is the author of 21 books and the founder of KlueIQ, a true crime AI-based gaming company. These roundtables are a standing feature of her laboratory at alexandrakitty.com.