5 Education Stocks in AI's Blast Radius
Graphic by Daniel DeLorenzo BY: Sam Koppelman , JD Jean-Jacques , Matthew Termine EDITOR: Vikas Kumar This past weekend, The Wall Street Journal published a bit of a bombshell: “Why Syracuse Can’t Attract the Students It Needs to Pay the Bills.” That isn’t a random school we’re talking about! It’s Syracuse University, home of the Orange. A 150-year-old, nationally known institution with a roughly $2.1 billion endowment and a sticker price approaching $100,000 a year. The place where Carmelo Anthony won a title and Donovan McNabb scored a touchdown wearing one shoe. That Syracuse … has a customer problem. Syracuse last year added roughly $450 million of debt to build dorms, yet enrollment came in weak enough to produce a budget shortfall this academic year. International enrollment, in particular, has fallen precipitously. Earlier this year, Syracuse announced it was sunsetting or pausing 93 academic programs. Fifty-five of them had zero students enrolled. Meanwhile, lower-profile colleges are disappearing altogether. Hampshire College plans to close at the end of this year after years of enrollment and financial problems. The University of Valley Forge recently announced that it would suspend academic operations at the conclusion of the current summer semester. And we may be at the beginning, not the end, of this trend. America produced about 3.9 million high school graduates in 2025, but that was apparently the peak. The Western Interstate Commission for Higher Education projects that number will decline steadily through 2041. That means colleges are about to spend 15 years fighting over fewer 18-year-olds. At the same time, something potentially much more disruptive is happening to the thing colleges actually sell. Graphic by Daniel DeLorenzo AI is increasingly calling into question the economic value of a degree. You don’t go to college for knowledge alone. You can read Plato for free. You pay that crazy sticker price to buy a bundle: instruction, credentialing, social status, friendships, and (critically!) access to a better job. AI may be attacking that last piece. At the very least, its power and ubiquity are challenging the status quo. Recent college graduates face about 5.6% unemployment and 42% underemployment. The entry-level labor market is weak for several reasons, including the rise of remote work , according to researchers at the New York Fed. But AI’s impact is becoming difficult to dismiss. Stanford University’s Digital Economy Lab analyzed recent payroll records of millions of American workers. Among those aged 22 to 25, employment in “AI-exposed occupations” is now 19% below employment observed in comparable occupations less exposed to AI. The researchers said the gap has widened since they identified it last year. In Britain , more than a third of the employers who took part in a university survey said they had cut entry-level opportunities over the past year, Reuters reported, “due in ​part to increased use of artificial intelligence and other forms of ‌automation.” So put yourself in the shoes of the parent of a 17-year-old. You are being asked to spend perhaps $200,000 in some cases ($400,000 at Syracuse!) for a degree that prepares your child for an entry-level white-collar job in 2031. Nobody knows what that job market will look like. And Americans have begun pricing that uncertainty themselves. When Gallup asked this summer what artificial intelligence would do to the importance of college degrees over the next five years, 46% said AI would make degrees less important. Just 20% said AI would make them more important. Regardless, some student borrowers are already struggling with repayment. Roughly 9 million borrowers were in default on $220 billion of federal loans as of March 2026, up 1.3 million from the previous quarter. . Dave Danielson, CEO of Student Debt Solutions , which works with borrowers to “simplify and support borrower’s journeys through complex student debt repayment options,” traces the issue to years of not having to pay. “Many student loan borrowers have not had to deal with their loans,” Danielson said, citing pandemic forbearance, the Saving on a Valuable Education (SAVE) program’s legal limbo, and a slow return to repayment. Credit reporting on delinquent student loans resumed in early 2025, and “more than 2.2 million student loan borrowers who became newly delinquent saw their credit scores drop more than 100 points and more than one million saw drops of at least 150 points,” according to the Federal Reserve Bank of New York.“That kind of woke people up,” Danielson said. Those are loans for degrees people already paid for. The question is who gets hurt if the next cohort decides the degree isn’t worth financing. And education already has its canary in the coal mine . In 2020, Chegg was worth almost $12 billion. Students or their parents paid Chegg for explanations, tutoring, and answers to homework questions. Then an AI chatbot learned to do all three. Today, Chegg’s market capitalization is approximately $90 million. The company has lost close to 99% of its value from the peak-era valuation, and 90% since The Bear Cave first wrote about the company in January 2024. We won’t kick it while it’s down. But we do want to find the next Cheggs. How many education companies are selling a service that AI will eventually make dramatically cheaper? How many education companies are selling a toolset that AI will eventually make obsolete? We dive into five — to start — below for our paid readers. Disclosure: The Bear Cave is now owned by Hunterbrook Media. Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any related positions at the time of publication. Positions may change at any time. Please see full disclosures here .
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