As freshmen settle in for their first year of college, their arrival on campuses marks a milestone higher education has long dreaded: this incoming class is the last big one before a prolonged decade-plus drop off begins.

Starting this year, the graduating classes of high schools across the country are getting smaller, the result of fewer people having children during the Great Recession and the years after. Even after the economy rebounded, the birth rate kept dropping. The COVID pandemic led to another sharp decline.

This is the beginning of what college officials call the “demographic cliff.” Higher education is one of the few industries that can predict its future customer base far in advance. When college leaders look at the projections of high-school graduates, they see down arrows only every year through 2041 — by then totaling a 13 percent drop overall to 3.4 million high-school graduates from nearly 3.9 million this year.

This doesn’t sound like bad news to everybody though. What alarms campus officials suggests an opportunity to many parents who assume the shift will work in their favor, improving their kids’ odds of getting into top-ranked schools or securing bigger breaks on tuition from colleges desperate to fill seats. Just this spring, before the enrollment cliff really hit, several colleges sent out surprise financial-aid packages to students who had already committed elsewhere in an effort to lure them in after coming up short in attracting enough freshmen to fill empty seats.

That may happen in some contexts. But higher education isn’t monolithic —even though we talk about college like it is — and the reality of what’s coming for teenagers and their families is complicated by geography and a college’s position in the larger market.

At an industry level, the demographic cliff is likely to leave the U.S. with a very different higher-education landscape from the one we know today with nearly 4,000 schools. Some colleges will close, merge, or be acquired by stronger players. Many others will limp along eventually resembling malls with vacant stores — bringing in just enough money to keep going but not enough to maintain their buildings or provide the kinds of services that add up to a good student experience.

For families already navigating a college-admissions process reshaped in recent years by test-optional policies and the growth of early applications, the demographic cliff adds yet another wrinkle. Should students take that shot at the elite schools on the chance they’ll be slightly easier to get in to? Will tuition discounts become more generous, but where? And how can families be sure the school they eventually choose will still have the resources to invest in facilities and programs after their kids arrive on campus? These are questions that students and parents didn’t need to ask a decade ago; now they will define both the college search for teenagers in the near term as well as the future of higher education in the U.S..

“There simply aren’t enough students to go around,” said Nathan Grawe, an economist at Carleton College in Minnesota. But the effects of the demographic cliff, he noted, “won’t be evenly distributed.”

Grawe has written a pair of books in which he calculates a “Higher Education Demand Index.” It not only considers the changes in the number of high-school graduates whom demographers study but student characteristics that predict college enrollment, such as race and ethnicity, as well as family income, which is an especially strong indicator of enrollment at elite colleges. (One recent study found that one in six students at Ivy League schools has parents in the top one percent.)

According to Grawe’s analysis, top-ranked schools will hardly feel the demographic cliff at all. He defines those as colleges in the top 50 of the U.S. News & World Report rankings, which include a mix of elite private schools (think Harvard, Stanford, and Northwestern) as well as big public flagships (think Michigan, Penn State, and the University of Washington). These schools are already inundated with applications for a fixed number of seats from families all across the country with the means and willingness to pay. Since the turn of this century, the number of applications to the 67 most selective colleges in the nation has tripled, to nearly 2 million a year, while their enrollments have barely budged upward.

In other words, it might get a little bit easier to get into the schools every teenager seems to have on their list these days — but it will still be difficult. “Maybe they’ll get fewer applications, and that moves their acceptance rates from 5 percent to 10 or 15 percent,” said Bob Massa, who was dean of admissions at Johns Hopkins University in the 1990s. “But we’re not talking about returning to 30 or 40 percent acceptance rates that were common when today’s parents went to these colleges.”

While the top schools vacuum up applications, the most dramatic effects of the demographic cliff will be felt downstream at colleges deeper in the rankings that mostly enroll students from their own backyard. Despite the popular narrative that students go “away” to college, higher education is largely a local business. Most teenagers stay close to home, enrolling in a school within 50 miles.

Much of the downturn in high-school graduates over the next decade will be among states in the Northeast and the Midwest, which also happen to be home to the largest concentration of colleges. As the country’s population expanded in the Northeast and then outward to the west in the 19th century, religious groups and towns started colleges to put themselves on the map. Massachusetts alone has 72 different private colleges. New York has 181 — half of which have fewer than 1,000 students. 

Grawe projects that over the next decade, the pool of applicants for these regional four-year institutions could contract by 10 percent. In states like New York, Ohio, Michigan, Wisconsin, and Illinois, it will decline by 15 percent or more. Already this past admissions cycle, the Common Application, which has more than 1,000 colleges on its platform, reported that the number of teenagers applying from southwestern states surged 39 percent, bypassing New England for the first time. Meanwhile, the South grew 7 percent, making it the largest source of applicants overall, topping the mid-Atlantic.

Even as more applicants originate in the South and Southwest, the public flagships that dominate those regions are increasingly drawing interest from northern teenagers eager for big, rah-rah campuses synonymous with football and Greek life. “Counselors call these the ‘College Day’ schools,” said Eric Furda, a college counselor at William Penn Charter School in Philadelphia and former dean of admissions at the University of Pennsylvania, a reference to the ESPN Saturday football show that travels to campuses. “A number of factors are driving it. Some of it is sports, some politics, some weather. Students are seeing on their social-media feeds a college experience that looks fun.”  

These regional trends will have a disproportionate effect on small liberal-arts colleges. Even demand for top-ranked colleges in New England like Bowdoin and Bates is expected to fall, according to Grawe. Small liberal-arts colleges — SLACs as they’re called on College Confidential, Facebook groups, and Reddit threads about admissions — have also fallen out of favor among the large segment of students who are most focused on college as a means to a career and choose to major in business, a STEM field (science, technology, engineering, and math), or pre-professional programs, like nursing.

“They want their diploma to have more on it than a major in psychology from a small liberal-arts college,” said Susan Carroll, the college and career center coordinator at New Canaan High School in Connecticut.

The list of colleges that seniors apply to from New Canaan, a well-to-do New York City suburb, reflects this shift. More than a decade ago, the top-ten schools included liberal-arts colleges like the University of Richmond, Franklin and Marshall College, and Bucknell University. Today, those schools have dropped off the list, replaced by the University of Wisconsin, Indiana University, and Clemson University. “A school like Indiana isn’t particularly hard to get in to, but within the university is the Kelly School of Business, which this town considers a very fine business school,” Carroll told me.

New Canaan’s in-state flagship, the University of Connecticut, remains the most applied-to school among seniors. In addition to those big, public flagships in other states, private schools in the South are also popular with Elon University now cracking the top ten.

Selective New England liberal-arts schools like Bates and Bowdoin — which still have acceptance rates around 10 percent overall — will likely be fine. They have large endowments. They need to enroll only around 500 students a year. And they’re able to satisfy enough students who want a business degree by offering an economics major. But beyond the very top of the rankings, the demographic math gets much grimmer for small institutions, which make up more than 40 percent of the U.S. higher-education market.

The demographic cliff comes at a moment when families are growing more skeptical about paying large tuition bills.  A long-running survey by Sallie Mae and Ipsos captures the shift: In the mid-2010s, around 85 percent of parents and students said that college was an investment in the future; by 2024, just 56 percent felt that way. And only 41 percent said in 2024 they were willing to “stretch themselves financially to obtain the best opportunity for their future,” versus nearly 60 percent a decade earlier.

A shrinking pool of students in the years ahead has many parents hoping they’ll benefit from bigger tuition deals. Even in today’s relatively positive demographic environment, some schools are already offering substantial tuition price cuts. The average discount for freshmen at private colleges nationwide is 56 percent. “I’m not sure how much more they can discount until they’re not bringing in enough money to actually pay their expenses,” said Massa, the former Johns Hopkins admissions dean.

The chief financial officer of a small liberal-arts school told me that each year the college’s freshmen contribute less toward its net revenue than the previous incoming class. His only hope to generate additional revenues is through higher charges for room and board. That’s why many private colleges require students to live on campus — they turn a profit on your living expenses that subsidizes other operations and services.

The rapid deterioration of students paying full tuition has been most acute at small liberal-arts colleges that rank between 51 and 100 in U.S. News. In 2022, nine out of every ten full-pay students who went to any liberal-arts college were enrolled at a school in the top 50. When basically everyone gets an unfunded discount at a college, the student experience will suffer.

“Most of the schools that give the best merit are in financial straits,” Ann told me matter-of-factly when we first met. The mother of three and a vice-president of digital marketing in the Northeast, Ann had been researching colleges for her children since they were in middle school. She and her husband, a teacher, make around $270,000 a year; with three kids in college at the same time, securing the lowest net price for each was crucial.

One of her kids ended up at Paul Smith’s College, a small school in upstate New York that was subject to increased financial oversight by the federal government because of concerns that it might run out of money. Another enrolled at Clarkson University, and during their sophomore year, the school announced cuts to several liberal-arts majors, in part to close a reported $7 million deficit. The same year, Moody’s revised its outlook for Clarkson to “negative.” The analyst noted the school’s “steadily rising discount rate and softening net tuition per student,” market troubles that “add significant obstacles to sustainably returning to fiscal balance.” Elsewhere in the report, Moody’s warned of a “rising age of plant” and “reliance on supplemental endowment draws.” Translation: Older buildings will need upkeep and the college is already dipping into its endowment for extra cash.
For Ann, the tradeoff was worth it: predictable discounts that made financial sense for her family even if that meant living with some financial uncertainty on campus. With a few exceptions (for example, the big Wall Street banks or the heavyweights among consultants), “the name on the diploma doesn’t matter much in hiring,” Ann said. “So it didn’t make sense to pay 10, 20, 30 thousand more a year, for what? Because the campus is nicer?”

The best way for families to determine how a school is doing financially — beyond getting access to internal balance sheets and budgets — is to look at its bond-rating reports. Three major agencies rate colleges: Moody’s, Standard & Poor’s, and Fitch. Most of the underlying information is publicly disclosed on the agencies’ websites. Much like credit reports for people, bond ratings assess the risk of lending money to the school. While individual borrowers receive a credit score, colleges are assigned a letter or letter/number combination.

What the analysts for the bond-rating agencies are increasingly finding is that many colleges aren’t bringing in enough revenue to cover expenses. More than 40 percent of private colleges posted a loss in 2023, the most recent fiscal year publicly available; 20 percent of public colleges did, according to Robert Kelchen, a professor at the University of Tennessee, who studies college finances. Some 50 colleges in his analysis have been running deficits for eight or more of the past ten years. “Unfortunately, these aren’t data points easily available to the public,” Kelchen said, “and even if they were, few families would pore over them like they do acceptance rates.”

In the early 1980s, the talk on campuses was much like it is today: of a demographic cliff as the last of the baby-boomers cycled through college. An influential report sponsored by the Carnegie Commission on Higher Education at the time warned of a “new depression” in the sector. It predicted that two-thirds of the colleges and universities in the United States were in or near grave financial difficulty.

But that bust never arrived. College enrollment actually increased by more than 20 percent during the 1980s and early 1990s, even as the number of high-school graduates declined. One reason was the recession of the early 1980s. It took a disproportionate toll on manufacturing in the U.S. economy and made the financial payoff of going to college well worth the cost. Second, more women, who historically didn’t go to college at the same rate as men, enrolled. By the 1990s, women began to outpace men.

The problem now is there aren’t similar levers colleges can pull to attract more 18-year-olds to campus. Undergraduate enrollment in the U.S. has already been on a decline since 2011 when it reached its peak. And the percentage of high-school graduates going straight to college is also falling after hitting a high of 70 percent in 2016; by 2022, the last year available, it had dropped to 62 percent.

Like the Carnegie Commission four decades ago, a report by Bain & Company in 2023 painted a dark picture of what’s to come for higher education: One-third of colleges are in “precarious financial positions.” Consolidations and cuts are starting to happen. This summer, six public colleges and universities in Indiana eliminated or combined more than 400 academic programs before a new state law took effect requiring them to get permission to continue low-enrollment programs. Colleges have long bragged about all the majors they offer as a sign of strength. But the reality is that very few students major in most of the programs listed in a college catalogue. On many campuses, half of the students are enrolled in just ten academic majors.

Colleges are also merging or being acquired by larger institutions. After taking over Mills College in Oakland, Northeastern University is now in the process of acquiring Marymount Manhattan College, a liberal-arts college in New York primarily known for its performing-arts programs.

Both of those plays were largely real-estate deals for Northeastern to gain a foothold in new metropolitan areas. The more likely scenario on the horizon for colleges that can’t make it is closure. Experts in higher-education finance predict if the worst-case scenarios come to pass, an additional 80 schools will close each year over the next decade, about double the annual average over the past one. Already in New York State, since 2023, Cazenovia College, Wells College, and the College of Saint Rose have closed.

John B. King Jr., the chancellor of the 64-campus State University System of New York, told me there are enough students to go around the state “if we reach the students who haven’t historically been well served by the higher-education sector,” including returning adult learners and underrepresented students. “That said, if you look at the math, I think we’re going to see more private-college closures, not just in New York but throughout the country.”

When colleges close, the impact reverberates beyond campuses. Two of the three closures in New York were in small towns, where the college was the largest employer, the cultural center, and their students and faculty kept local businesses busy with customers. As New America’s Kevin Carey has noted, the demographic cliff risks accelerating the “geographic consolidation that is already upending American politics” as college-educated Democrats congregate in cities and coastal areas in which campuses will thrive — while people in rural towns, less likely to have degrees, might bear the brunt of closures.

When Wells College announced it was going out of business in 2024, I noted on social media that the institution had been recruiting new students for the following fall right up to the very end. Despite some noise about the troubles Wells was in, the school hadn’t sent clear signals that the end was near. My post about Wells attracted the attention of Doug Moore, who had been seeing the worrisome signals at Wells and other colleges.

Soon after, I met up with Moore at a private airfield in Schaumburg, Illinois, not far from Chicago, where he emerged from his Cirrus SR20 single-prop plane. I came to nickname Moore “The College Closer.” For years, he’d led the closure of industrial sites, until one day, a subcontractor mistakenly opened a gas line. “It nearly killed me,” Moore told me. Right around that time, he saw a presentation about the coming demographic cliff in higher education. Then someone asked him to help close a college in Iowa. The college work has only picked up since and is now his full-time gig.

He usually gets the call 90 days before closure, when it’s too late to save the school. “The die is cast, and it becomes a self-fulfilling prophecy as the media begins to pay attention,” he said.

As we stood on the tarmac, I asked him what he saw as the signs of a distressed college. He rattled off several — not paying vendors, borrowing against the endowment, and constant changes in leaders. He then mentioned one more that surprised me: a high percentage of students playing sports.

The outside bet that struggling colleges are making is adding athletic teams — especially niche ones — to boost enrollment. Division III schools in particular are falling into this trap. They aren’t allowed to offer sports scholarships, but plenty of students still want to play and aren’t good enough to play at the Division I level. That’s who these schools court. Overall athletic participation is growing in college with Division III seeing the largest growth, adding more than 17,000 athletes in 2022 through ’23 alone.

Adrian College, a liberal-arts school in Michigan, has more than doubled its enrollment to 1,600 over the past 15 years by adding more than 30 sports teams, including synchronized ice-skating, bass fishing, and varsity cornhole. Today, 70 percent of the student body are athletes. Fairleigh Dickinson University in New Jersey added two sports after school leaders brought in an outside economist to show that athletics should be judged not only on the costs but also on the potential to drive net tuition revenue. But as Moore noted, because most schools don’t closely track revenue and expenses by program, they can’t accurately say how much more tuition money they could net by offering football or field hockey. Nor can they sustain this strategy for growth.

“There are only so many sports you can add,” Moore observed. “And then what do you do?”

That question looms large for both colleges and prospective students. After decades of finding yet another student segment to tap for growth, higher education might be finally out of answers.

All sectors of the economy — even those that seem super-static like higher education — experience market disruptions that have a way of creeping up on us. The annals of business are filled with examples. Sears, Roebuck and Co., the first “everything store” long before Walmart or Amazon came along, has shuttered all but a few locations. Kodak failed to pivot to a digital world in time to stay on top, despite having the technology. When I mention these brands to my teenage daughters, they give me blank stares. Like Sears and Kodak, many colleges are losing the market power and relevance they’ve long enjoyed. After decades during which higher ed assumed growth was inevitable, it may have already reached its peak.

This article was adapted from Dream School: Finding the College That’s Right for You, by Jeffrey Selingo, published on September 9 by Scribner.

by Duaa Eldeib, photography by Sarah Blesener for ProPublica

This story contains graphic descriptions of suicide attempts.

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The email took Dr. Neal Goldenberg by surprise in a way that few things still do.

As a psychiatrist, he had grown accustomed to seeing patients in their darkest moments. As someone who reviewed insurance denials, he was also well-versed in the arguments that hospitals make to try to overturn an insurer’s decision not to pay for treatment.

But as soon as he opened the review last October, he knew something was different. It was personal and forceful and meticulous — and it would lead him to do something he had never done before.

“Based on the indisputable medical facts, we are unsure why anyone would assert that any part of the insured’s inpatient behavioral health treatment was ‘not medically necessary,’” the appeal letter argued.

The battle playing out on the pages before him began in March of 2024. Highmark Blue Cross Blue Shield had refused to pay for a North Carolina man’s monthlong treatment at a psychiatric hospital. The man had been suffering escalating mental health issues, culminating in back-to-back suicide attempts. But using a designation insurers commonly employ when denying coverage, doctors working for Highmark determined the care was not “medically necessary.”

Insurance companies deny hundreds of millions of claims a year, and only a tiny percentage of people appeal them. Even fewer take the process to the very end, appealing to a third-party, or external, reviewer like Goldenberg. A recent report found that, on average, less than 1 out of every 10,000 people eligible for an external review actually requested one.

Goldenberg, who is based in Cleveland, had initially picked up the extra job a few years ago to help pay down the massive student debt he and his wife, a family doctor, had accumulated during medical school.

External reviewers like Dr. Neal Goldenberg have the power to overrule an insurer’s decision to deny coverage for patient care and to force insurance companies to pay for treatment.

In that role, he has the power to overrule an insurer’s decision to deny a patient coverage and force the company to pay for treatment. Few things anger him as much as patients being denied the care they needed, which compelled him to continue doing the reviews even after the student loans were paid off.

Attached to the appeal letter were nearly 200 pages of records organized by headings and numbers. There was even a glossary of diagnosis codes that are used for billing.

Goldenberg’s first thought was that a lawyer had put together the appeal. But the name on the bottom of the letter didn’t belong to a law firm.

He spent the next hour and a half reading the file: records from eight separate medical providers; research on suicidal ideation; letters from two psychiatrists supporting the appeal, including one that described the patient’s depression and stress as causing “psychological suffering and functional impact.”

Then he did something he hadn’t done in the six years he’s been reviewing cases. He called the name at the bottom of the letter: Teressa Sutton-Schulman.

The line rang several times before going to voicemail.

“Hello. My name is Neal Goldenberg. I am reviewing an insurance claim for your husband,” he began.

Teressa Sutton-Schulman and her husband on their wedding day

Sutton-Schulman’s husband, who ProPublica is identifying by his middle initial “L,” had always been anxious and more than a little obsessive. As an adult, financial matters, especially, threw him into a panic and eventually sent him to therapy.

By January of last year, after deciding that the therapy wasn’t working, he made an appointment with his primary care doctor, who prescribed him an antidepressant and antianxiety medication. After a few days, L called the doctor to say he felt worse. A panic attack landed him in the emergency room about a week later.

Right before Valentine’s Day, he met with a psychiatrist.

The way his mind had begun to shuffle through worst-case scenarios was something Sutton-Schulman hadn’t witnessed before.

They met at Georgia Tech. L had noticed her at a party. When he walked up to her, she told him she was waiting for someone.

“I could be someone,” he responded without missing a beat.

She was drawn to his humor and charm. As an introvert, Sutton-Schulman marveled at the way his presence filled a room, floating between people and the things they talked about with ease. He considered her his rock, his best friend, the person he loved most in this world.

They shared a mutual admiration for each other’s intellect and drive. He skewed nerdy, playing Dungeons & Dragons in his downtime. Not that he had much. As a rising star in the world of software engineering, work consumed him. He craved success the same way he pushed the boundaries of technology — relentlessly.

They decided not to have kids; they had each other and their work. In the early 2000s, they built a software consulting company together. Although Sutton-Schulman trained as a chemist, she went back to school to become a paralegal and the company’s in-house legal expert.

More than 20 years into their marriage, they still held hands like it was their first date. When they entered their 50s and faced the prospect of growing old in their three-story house, they decided to buy a ranch home in the same small North Carolina town outside of Raleigh that they had lived in for more than two decades.

That decision would forever alter their lives.

After more than 20 years of marriage, Sutton-Schulman and L bought a ranch home outside of Raleigh, North Carolina.

The pandemic’s housing market, with its skyrocketing prices and houses that sold before they even went on the market, exacerbated his stress. The couple put offers on half a dozen houses. They lost $25,000 in earnest money after backing out of the only two offers that were accepted. The hit hurt, but thanks to L’s job, they had more than enough in the bank.

Finally, in the summer of 2023, they found their house, though it needed some work. They decided to rent out their old house, but that, too, required some fixing up before they could put it on the market. L was determined to get a renter in quickly, and they poured money into both houses simultaneously.

L’s anxiety grew with every expense. They argued about money, about his insistence on undertaking everything at once, about his unwillingness to get treatment, about their five cats. She begged him to get help. He assured her he had it all under control.

After two months, they moved into the new house.

L grew more irrational each day. All he could do was fixate on the finances. On top of it all, they weren’t sleeping. To help with the cats’ transition to the new house, Sutton-Schulman had talked to L about getting them an enclosed space on their patio. But L, who was overseeing the remodeling, didn’t prioritize it. The cats kept them up each night with their incessant whining and scratching at their doors.

She knew that all of his concerns were symptoms of a larger problem, but neglecting to take care of the cats was the final straw. As hard as it was for her to leave him, she felt like she had no other choice. Two weeks after moving in, she packed her bags and her SUV and moved back into their old house.

It took her leaving for him to see a therapist and agree to couple’s counseling.

Buying the house, he told his wife, was a mistake.

If you or someone you know needs help, here are a few resources:

• Call the National Suicide Prevention Lifeline: 988

• Text the Crisis Text Line from anywhere in the U.S. to reach a crisis counselor: 741741

“I started catastrophizing every day,” L said at his appointment with his psychiatrist right before Valentine’s Day, medical records show.

L told him that he regularly woke up at 2:30 a.m. in the throes of a nightmare. His heart raced. His legs felt weak. He contemplated ending his life.

The psychiatrist tried to determine how serious his suicidal thoughts were. L admitted he felt anxious and hopeless, but he said he was afraid to die.

“I’m a fucking coward and I can’t do it,” L told the psychiatrist, according to his medical records. “I don’t know how to kill myself.”

Two days later, he swallowed a bottle of sleeping pills and chased them down with bourbon. He slid into the driver’s seat of his Mercedes parked in the garage, turned on the ignition and closed his eyes.

L finally agreed to go to counseling after Sutton-Schulman moved out, but his condition continued to deteriorate.

Goldenberg’s path to medicine began at a young age. He excelled in science in school. He grew up with a dad who was a dentist and a belief that doctors could heal.

But 2003, his first year of medical school, was difficult. He didn’t fit in with some of his classmates who were focused on which speciality would yield the biggest salary.

Stumbling upon a book by Dr. Hunter “Patch” Adams, the doctor who devoted himself to infusing humor and compassion in medicine, provided the inspiration he needed. Adams’ name became the title of a movie starring Robin Williams, which made the red clown nose he popped on when visiting sick children famous.

Goldenberg reached out to Adams’ nonprofit Gesundheit Institute, which allowed him to volunteer. He soon embarked on a 300-mile bike ride from Ohio to West Virginia to spend the summer after his first year of medical school surrounded by people who, like him, were frustrated by the health care system. They yearned for an approach that focused not just on the illness of one patient, but on the health of a community.

When he got back, he volunteered at a free clinic in Columbus. The experience deepened his appreciation for caring for the sick as well as his disillusionment with a health care system he viewed as farming out the medical treatment of certain patients to trainees.

The next turning point came when he attended a conference of the American Medical Student Association, which encourages doctors to advocate for affordable health care. Seeing so many of his fellow medical students with the same values energized him.

“Vast swaths of our population were uninsured,” he recalled. “I just couldn’t get over how unfair that was and wanted to be part of the good guys fighting to change that.”

“Vast swaths of our population were uninsured,” recalled Goldenberg. “I just couldn’t get over how unfair that was and wanted to be part of the good guys fighting to change that.”

Goldenberg met his wife at the conference; together they pledged to improve how medicine is practiced. They both pursued family medicine. But during his residency at the University of Wisconsin-Madison, he fell in love with psychiatry. He found satisfaction in building relationships with patients struggling with mental illness and helping them through it.

Madison had pioneered a team-based model in the 1970s that treated patients with severe mental illness in their homes and communities, rather than at institutions and hospitals. He was so struck by this approach that he specialized in community psychiatry. Later, he became medical director of a nonprofit organization that treated the homeless.

The job reviewing health insurance denials came about after he spotted an online job posting.

With more than 15 years’ experience treating patients at clinics and in hospitals, he was flush with knowledge and a desire to make a greater impact. He told himself that he could walk away at any point if he felt he wasn’t living up to the ethical standards he set for himself. He was determined not to be a rubber stamp for anyone — not for the insurance companies and not for the hospitals.

Perhaps surprisingly, he estimates that he sided with insurance companies about half the time. Some hospitals, he said, admitted patients when they didn’t need to, and some doctors wrote that they had ordered treatments that made little sense given the patient’s diagnosis.

The bulk of his cases are reviews involving the major Medicaid plans in Ohio. The third-party company he worked for approached him in 2023 with another opportunity: to do more in-depth external reviews for commercial insurers. He agreed, but his priority remained his main psychiatry job and the patients he treated there.

The third-party review company that Goldenberg works for declined to comment.

State and federal regulations designed external reviews as an attempt to level the playing field between behemoth insurance companies and individual patients. The idea is to provide an added measure that prevents insurers from having the final say in deciding whether they will pay for a claim they had already denied. The Affordable Care Act in 2010 expanded access to the reviews, but barriers regularly get in the way of the process serving as a true check on insurers.

Most people haven’t heard of external reviews, and most denials are not eligible for one. Those that are eligible typically involve medical judgment, surprise medical bills, or an insurer deciding to retroactively cancel or discontinue coverage or determining that a treatment was experimental. Even then, insurers can argue that a denial is ineligible for an external review.

Only after the internal appeals with the insurer are exhausted is an external review an option for some denials. Requests have to be filed within a certain time frame, depending on whether they’re filed under state or federal laws. That distinction can also determine if insurance plans get to pick the company that does the external review.

In addition, it’s nearly impossible to know how effective they are. Insurance companies almost never release data around denials in general. That’s especially true about external reviews.

A recent KFF report looking at federal insurance marketplace plans found that fewer than 1% of of the system’s tens of millions of denials were appealed internally. Of that 1%, about 3% of all upheld internal appeals — only about 5,000 enrollees — went on to file external reviews, though there wasn’t enough data to calculate the rate at which external appeals were upheld.

After L’s suicide attempt last February, a judge ordered him to be committed to a mental health center about 40 minutes south of Raleigh. There, staff took away his phone, shoes and anything that could be a safety hazard. Doctors increased the dosage of his new antidepressant and, while they waited for the medicine to take effect, L spent his days coloring, making bracelets and watching a documentary about meditation.

The court rescinded the involuntary commitment order about a week later, but did so under two conditions: that L be released to his wife’s care and that he see a therapist and a psychiatrist. Sutton-Schulman heeded the judge’s orders and agreed to have him move back in with her.

When she picked him up, they both cried.

“I never want to do anything ever to go back to a place like that again,” he said as he climbed into her car.

At the house, she didn’t let her emotions show through the reassuring facade she maintained for him. Secretly, she was terrified he would try to kill himself again.

Four days later, she woke up to a quiet house. She assumed he’d gone for a walk, as he usually did.

After L’s first suicide attempt, he moved back in with Sutton-Schulman, who agreed to help care for him as a condition of his release from a mental health facility.

She heard the front door open and went to greet him. Her eyes immediately found him leaning over the kitchen sink. As she got closer, she glimpsed a knife in the sink covered in blood. Then she saw blood pouring out of his neck, spilling from his wrists, soaking his sweater.

She grabbed a towel to put pressure on the gash on his neck.

“Did you do this to yourself?” she asked.

“Yes,” he said.

For the second time in 11 days, she called 911.

“Just let me die,” he said over and over.

Paramedics rushed him to the hospital. This time, police taped off the house and questioned Sutton-Schulman for two hours until a detective got a call from the hospital confirming that L had attempted suicide in the woods behind the house.

By the time she arrived at the hospital, the bleeding was under control. After the doctor stitched up L’s neck and bandaged his wrists, he agreed to accept treatment. Police drove him to Triangle Springs, a residential treatment facility in nearby Raleigh.

But instead of improving, L’s mental health deteriorated. He began displaying signs of psychosis. He told the doctors that “the coke machine was fuzzy and he could hear just random voices,” his medical records show. During a call with Sutton-Schulman, he told her that he believed the other patients had been planted at the facility by the FBI and authorities were trying to frame him for murder.

“Patient is not considered safe to be discharged,” his doctors wrote in his medical notes on four separate occasions.

Desperate, Sutton-Schulman called a friend who is a social worker in psychiatric hospitals. He’s getting worse, she told her. Where else can I take him?

Of the three facilities her friend recommended, The Menninger Clinic in Houston was the only one that returned her call.

She wasn’t sure she could get him there in his condition, but she knew she had to try. She booked an early-morning flight for the two of them. At one point, he dropped to the airport floor. “I can’t do it anymore,” he told her.

“You have to,” she told him.

She was relieved when they arrived at Menninger. The staff did genetic testing that revealed he could have an adverse reaction to the antidepressant his doctor had put him on. Learning that, she said, felt like the missing piece of a puzzle.

Sutton-Schulman got L settled in, met with his doctors and, for the first time in months, felt some hope.

Goldenberg approached his side job with caution.

When he’d started, a part of him feared he would be pressured to side with insurers regardless of the medical evidence. But that didn’t happen. He soon embraced the job as a way to hold everyone accountable because it wasn’t just insurance companies that tried to game the system.

“Doing these chart reviews has also opened my eyes to the way doctors and hospitals cheat the system, even Medicaid,” he said. “And I don’t like that either.”

Over the years, he said, he’s done hundreds of Medicaid reviews and about a dozen external reviews. He knows more than most that no one is immune to having a mental health episode.

“We all have vulnerabilities, and we all have genetic predispositions, sensitivities to certain kinds of stress,” he said. “Someone who’s been able to handle stuff all their life, if they have just too many things going on, it can push you past your breaking point.”

It’s a bit like how a healthy person can be diagnosed with cancer or get into a car accident. People pay for insurance, he said, so it’s not financially disastrous when that happens.

“I’m working within a system that I know is broken, but doing my best to change it from the inside,” he said.

A part of him wonders if Patch Adams would consider him a sellout for not living up to the radical ideologies of his youth. But his goals haven’t changed. They’re evident in the practice philosophy he spotlights at the top of his CV: “Increase quality of life for those suffering from mental illness in an atmosphere of respect, understanding, and collaboration.”

The spirit of his work, which earned him a humanism in medicine scholarship in medical school, is what prompted him to call Sutton-Schulman.

“I see how opaque the system can be,” Goldenberg said, “how frustrating it is when you feel like no one hears you.”

Sutton-Schulman with the records she kept from her husband’s case

On March 19, just a week after her husband was admitted to Menninger, Sutton-Schulman received the first denial from Highmark.

Highmark had sent her a letter in late February confirming pre-authorization for his treatment at Triangle Springs, where L was first treated after his initial suicide attempt. “This approval means that we confirm that the requested services or supplies are medically necessary and appropriate.”

And again a few days later, it sent her another: “We approved the request to extend an inpatient admission for the patient.”

But on that day in mid-March, Highmark showed a balance of $30,599.69.

The reason? The Triangle Springs treatment was not being covered after all; it had been deemed not medically necessary.

The pre-authorization letters included a line saying payment was not guaranteed, but Sutton-Schulman didn’t think much of it. And with good reason. At the top of the letter, in bold, were the words: “We approved your inpatient admission request.” She felt like Highmark was reversing itself.

Sutton-Schulman watched as her husband — one of the smartest men she knew — continued to unravel. When a person is gravely ill, they’re often forced to fight two battles, one against their sickness and the other against the insurance company. As L focused on his health, Sutton-Schulman mobilized against Highmark.

She was no stranger to taking on powerful companies. She was part of the army of women who took on the pharmaceutical giant Bayer after they blamed the company’s permanently implanted birth control device for serious health complications. They filed reports with the Food and Drug Administration over adverse reactions, they organized protests, and many of them sued Bayer, though Sutton-Schulman did not.

At the end of 2018, Bayer stopped selling the device, despite insisting it was safe.

In her fight with Highmark, Sutton-Schulman leaned on her paralegal skills, beginning with reading the company’s coverage booklet from start to finish. That’s where she learned of the possibility of the external review. Then she began tracking and documenting everything — the calls with Highmark, its promises, denial letters, bills and appeal requests — and developing her own filing system of labeled manila folders and document boxes. She even started recording her phone calls with the company.

Just as she started to get going, a call from Menninger stopped her in her tracks.

Her husband had passed out in the bathroom and hit his head. Menninger took him to a nearby hospital, where he was treated for a severe colon infection, likely brought on by his long-term use of antibiotics to treat the neck wound.

Once doctors cleared out the infection, an ambulance took him back to Menninger to complete his treatment.

Meanwhile, Highmark sent Sutton-Schulman a succession of denials.

Sutton-Schulman continued to fight Highmark to cover her husband’s care, even as he was hospitalized.

Highmark refused to pay for the emergency medical treatment for the colon infection. In a bizarre twist, that denial letter listed her husband as the patient but made reference to the care of a newborn, not that of a 52-year-old man having a mental health crisis.

“It was determined,” the letter said, “that your newborn does not meet the criteria for coverage of an inpatient hospital admission.”

“This is when I really start to think they’re just denying,” she recalled. “They’re not even looking. They’re just ‘deny, deny, deny.’”

A denial letter from Highmark relating to L’s stay in a Texas hospital with a colon infection described the 52-year-old man as a newborn, stating “it was determined that your newborn does not meet the criteria for coverage of an inpatient hospital admission.” (Obtained and highlighted by ProPublica)

Before she could appeal it, she was hit with another denial. The company denied her husband’s first week of care at Menninger.

Then the fourth denial arrived, this one for the rest of the treatment at Menninger.

Doctors at the hospital where her husband was treated for the colon infection had persuaded Highmark to pay for the medical care, but she was responsible for the remainder of the appeals. She soon found herself raging at what she came to believe was “weaponized incompetence.”

Fax numbers were wrong. Key records that included the billing codes and denial reasons that she needed for her appeals were no longer available online. The insurer wouldn’t even give her access to her husband’s medical records, though he had signed a release granting her permission.

“At this time,” she wrote to the insurer, “I can only interpret Highmark’s refusal to respond to appeal requests in a timely manner or provide information as an ongoing, purposeful effort to erect insurmountable obstacles to this process.”

On her 18th call to Highmark, she bristled at the notion that a critical letter from the insurer was lost in the mail.

“I never got a letter,” Sutton-Schulman shot back from her kitchen table.

Listen to One of Sutton-Schulman’s Calls With Highmark

Sutton-Schulman: So it’s up to me to do the appeal, to handle the appeal. Which it’s very hard for me to do when there are roadblocks being purposefully erected for me, such as not being notified that I have a case number and that I’m supposed to send stuff in and I’m on a deadline. Because I absolutely would have sent that stuff in. I have it.

Highmark representative: Mm-hmm.

Sutton-Schulman: I am very curious under what scenario exactly a person who has tried to kill himself twice within the span of a week is denied an inpatient behavioral health treatment when every doctor that saw him said he needs to be in a residential treatment program. I am infinitely curious what credentialed individual made that decision that that is not medically necessary.

Highmark representative: Yeah, I definitely understand. That’s very frustrating.

Appalled, she filed two complaints with the state insurance department in Pennsylvania, where Highmark is based. The first, in June 2024, explained the multiple roadblocks she experienced and wrote that Highmark denied claims as medically unnecessary and impeded her ability to appeal them. The department wrote back and incorrectly stated that the denial was not eligible for an external review because it did not involve medical judgment or rescission of coverage.

Six months later, Sutton-Schulman filed a second complaint with the agency highlighting a litany of additional problems and asking for an investigation into Highmark. After both complaints were closed, Sutton-Schulman wrote the agency again, reasserting the “weaponized incompetence” claim and adding that she believed the company’s goal “seems to be not paying claims or to delay payments as long as possible.”

“Frankly,” she concluded, “I don’t even know why they are allowed to continue operating like this without sanctions or fines.”

A spokesperson for the insurance department did not answer ProPublica’s questions, saying that state law prohibits the department from disclosing details of individual consumer complaints or ongoing investigations.

In a statement, the department said every complaint is “carefully reviewed and informs our broader oversight. When we find systemic issues, we have not hesitated to act, including imposing fines, ordering corrective actions, and requiring restitution to Pennsylvanians.”

The Pennsylvania agency and the Delaware Department of Insurance have fined Highmark and its health insurance subsidiaries at least four times in the past 10 years, including as recently as 2024 and 2023. The fines were levied for denying and failing to pay claims on time, including those for mental-health-related treatment. Just last year, Delaware fined Highmark $329,000 for violating mental health parity laws, which aim to ensure that mental health and physical health insurance claims are treated equally. Highmark said in response that it evaluated its practices and ensured that the same standards are used for mental health as physical health. In addition, it said at the time that it would review and revise its procedures where necessary to ensure compliance with state and federal requirements.

L provided Highmark two signed releases authorizing the company to respond to ProPublica, which the company said were necessary for it to answer questions. He also called the company to ask it to respond. Still, Highmark would not discuss L’s case in any detail, citing patient privacy.

Instead, the company provided a statement acknowledging “small errors made by physicians and/or members can lead to delays and initial denials,” but said those are corrected on appeals. The statement said company officials “recognize and sincerely regret” when prior authorization and claims processing are “challenging and frustrating,” and added that the issues raised by L’s case were “resolved at least a year ago.”

The statement said prior authorization requests are reviewed by licensed physicians and completed based on widely accepted national guidelines. The decision to deny or uphold an appeal, the statement said, is based on the same national guidelines. Highmark said it is working to improve its prior authorization process, including reducing “denials when errors are made, regardless of who or how the errors are made because we are passionate about providing appropriate and timely care to our members.”

“Highmark is dedicated to full compliance with all applicable state and federal Mental Health Parity laws regarding coverage for behavioral health services for our members,” the statement said.

In the end, Sutton-Schulman won the Triangle Springs appeal, but Highmark classified L’s treatment at Menninger as two separate admissions. She eventually was able to get Highmark to pay for the first week at Menninger — more than $20,000 — but the company wouldn’t budge on the $70,000-plus for the other four weeks of treatment.

Her final shot was an external review, but getting Highmark to agree to one wasn’t easy — though Sutton-Schulman believed they were eligible. When she finally convinced the company, it gave her less than two hours to file a request before a 5 p.m. deadline. She pressed send on the email at 4:34 p.m.

By the time Sutton-Schulman’s letter landed in Goldenberg’s inbox, he had done enough reviews to know what to expect. But the details of L’s case were striking.

“This is the high-risk case that psychiatrists have nightmares about,” he recalls thinking.

It was also the first time he had received an appeal from a family member, not a hospital. He wondered if he should call Sutton-Schulman. He decided that for a doctor who believes so adamantly in humanism in medicine, this was a chance to be human.

She wasn’t sure what to make of his voicemail. A part of her was relieved, but a bigger part didn’t trust it. After all the denials and broken promises, she couldn’t believe that it could all be resolved in a single phone call.

A little while later, Goldenberg called her again. This time she answered.

He asked how her husband was doing. Did he survive?

He’s back home, she said, seeing a local psychiatrist. “I think they finally have his medication correct and stabilized.”

“I just want you to know that there was a human in this whole process that actually took a look at all this stuff, that actually read it,” he told her. “It probably just felt like that has not been the case for most of it.”

“We all have vulnerabilities, and we all have genetic predispositions, sensitivities to certain kinds of stress,” said Goldenberg. “Someone who’s been able to handle stuff all their life, if they have just too many things going on, it can push you past your breaking point.”

He acknowledged that he probably shouldn’t be talking to her.

“Part of the reason I do this job is to make sure that people get what they need,” he said, “and bad doctors get punished, and shitty insurance companies don’t get to do this kind of stuff to people.”

In response to Highmark’s denial, Goldenberg wrote that the insurer did not understand L’s “complex psychiatric and medical situation.” His treatment was interrupted by a medical emergency — he didn’t leave the facility because he had completed treatment, as the company suggested. After doctors tended to the infection, his “psychosis and depression were still severe.” The resumed treatment, he wrote, was “denied unfairly.”

In total, L’s treatment cost more than $220,000, which includes claims that Highmark approved when they were initially filed. But Sutton-Schulman and L had to pay more than $95,000 out of pocket, burning through their savings in hopes that Highmark would reconsider their denials. Many people don’t have the money to pay for care if their insurance won’t cover it. Highmark ended up reimbursing them more than $70,000. Considering out-of-network and other charges, Sutton-Schulman was content with that amount.

With their struggles against Highmark behind them, Sutton-Schulman and L are still putting their lives back together. In July, they returned to couple’s counseling; the therapist told Sutton-Schulman she needed to process the trauma of what happened.

“I’m just now starting to do that,” she said, “because I finally feel like I don’t have any insurance to fight.”

She’s also dealing with her own guilt, wondering if moving out pushed her husband over the edge.

L turned to look at her. “You shouldn’t blame yourself.”

“I know,” she said, her voice breaking. “But the reality of knowing that intellectually to be true, and then emotionally, those are two very different things.”

He has tried to assure his wife that he’s better. He’s returned to work, though colleagues don’t know what happened, other than that a medical emergency kept him away. He logs onto meetings from his laptop and travels for business trips. His voice is exuberant, especially when cracking jokes.

“When your mind shatters like this, it’s hard to explain,” he said. “Nothing makes sense, and you just want it to be over.“

Things feel normal until he catches sight of the scar on his neck. It’s small and could pass as a nick from a razor. But every time he looks in the mirror, he is transported back to that moment in the woods. He’s not sure he can handle the world knowing what happened.

The couple still live in separate houses but eat dinner together most nights. On a recent evening, they sat at the round kitchen table where Sutton-Schulman had done so much of the work fighting with Highmark. He chatted about work. She talked about needing to take one of the cats to the vet. As he got up to leave, she walked him to the door and wrapped her arms around him before saying goodbye.

They recognize how lucky they were that their case was assigned to Goldenberg.

The praise makes Goldenberg uncomfortable.

“It shouldn’t even be a big deal,” he said. “It should have happened multiple steps before it got to me.”

Since the review, Goldenberg has gone back to the residents he teaches. As doctors, he tells them, they have the power to make patients feel seen, to spend an extra few minutes filling out paperwork to help someone with a request for time off work, to support an appeal if they believe an insurer wrongly denied coverage.

“Sometimes,” he said, “there’s an opportunity to reach out and connect in a way that adds a little bit of humanity to the world.”

L has recovered and he and Sutton-Schulman continue to process the trauma of his experience.

How We Did This:

Last September, Teressa Sutton-Schulman reached out to ProPublica to share this story. She was frustrated by Highmark’s denials and unsure if her last resort, the external appeal, would yield results. Reporter Duaa Eldeib interviewed Sutton-Schulman and L multiple times and traveled to North Carolina for additional reporting. To verify the details of their story, Eldeib examined thousands of pages of medical records, billing statements, state agency reports and insurance documents. She also reviewed 911 records, text messages and audio from dozens of recordings Sutton-Schulman made of calls with Highmark and of a voicemail from and a conversation with Dr. Neal Goldenberg. Eldeib made multiple trips to Ohio to interview Goldenberg. She sent Highmark a detailed list of questions, which the company did not answer. In a statement, Highmark said it is “dedicated to full compliance with all applicable state and federal Mental Health Parity laws regarding coverage for behavioral health services for our members.”

Mariam Elba contributed research. Photo editing by Andrea Wise

Welcome to the Unsleeping City, a magical New York overrun with the ghosts of crooked cops and members of a fairy mafia. Seven actors had gathered onstage at Madison Square Garden to occupy the fantasy world designed by Brennan Lee Mulligan, the game master for Dimension 20, a streaming show based around Dungeons & Dragons. This was a live one-off episode. Fireballs erupted around the actors as if they were pro wrestlers rather than a group of improv comedians enacting a tabletop role-playing game. The last time they performed in New York, in 2019, it was for 250 people. Tonight, a sold-out audience of nearly 20,000 fans had filled the Garden, to the cast’s surprise. “Everyone I’ve told about Madison Square Garden is like, ‘Oh, is there a smaller room at Madison Square Garden?’ ” Ally Beardsley, one of the actors, said beforehand.

In the game, Beardsley plays a drug dealer who wears a medical bracelet — from his recent top surgery — that gives him powers. Midway through, Beardsley broke character. “Fun fact,” they said as they rolled a pair of dice. “When I made this character, in his med bracelet was testosterone — which is not in pill form. Now I know.” Beardsley came out as trans shortly after Dimension 20 started. In the intervening years, they learned that testosterone is taken by injection. Their hairstyle changed and their voice deepened. In one episode, they made a joke about a bad dice roll making them so mad it burst their top-surgery stitches. Everyone in the audience had watched Dimension 20 from the beginning and witnessed Beardsleytransition in real time, regularly weighing in online to express how much they adored them. “Every time I cut my hair,” one fan wrote, “I dedicate the hair to Ally and pray to the gender gods that my hair will look half as hot as theirs.”

Premiering in 2018, Dimension 20 was the first breakout success for the independent streaming service Dropout. Unlike the major streamers, which try to offer something for everyone, Dropout is about immersing oneself in a world. In many ways, it can feel like one interconnected show about an expanding cast of -comedians — kind of like the Marvel Cinematic Universe, but instead of with superheroes, its world is filled with improvisers with niche interests. Stars such as Jacob Wysocki, Rekha Shankar,and Lou Wilson may be far from household names, but if they were getting a matcha at a coffee shop near the UCB Theatre in L.A., they would be mobbed like they were three Timothée Chalamets. Broadly, Dropout shows are nerdy and lighthearted, living at the intersection of games and improv comedy. Besides Dimension 20, popular ones include Very Important People, a show where host Vic Michaelis interviews a guest in heavily made-up character; Make Some Noise, in which performers improvise based on prompts like “Female Characters Who Just Can’t Seem to Pass the Bechdel Test”; and, by a large margin, Game Changer, wherein the game changes every -episode — in one, a heart monitor is strapped to the contestants as they undertake increasingly intense challenges, winning points only if their heart rate doesn’t rise.

Dropout fans have developed a reputation for being young, progressive, extremely online, and deeply invested in the artists who appear on the platform. Many feel marginalized in their everyday lives and see the Dropout community as a place where they are accepted. Pronouns and content warnings are always displayed. (Got emetophobia, the fear of vomiting? Dropout will give you a heads​-up.) The talent roster is largely made up of elder–millennial comedians who convey the hopeful vibe of the first Obama campaign. The world of Dropout feels a little like being a Harry Potter fan before J. K. Rowling got Twitter.

While the Dimension 20 seven played onstage at the Garden, Dropout CEO Sam Reich watched from above in a luxury box. “You can really compartmentalize the fandom until you see them in person,” he tells me afterward. “It was a bit of an out-of-body experience.” Reich, 40, purchased the service in 2020 along with its sister company, CollegeHumor, at a moment when it was an unwanted asset. The son of former U.S. secretary of Labor Robert Reich (i.e., the only former U.S. secretary of Labor most people would be able to name), he dropped out of high school at 16 and has been working in comedy and theater ever since. A trained improviser, he hosts Game Changer and Make Some Noise. On those shows, Reich plays a somewhat maniacal ham, dressed like, as one comedian joked on a recent season of Make Some Noise, “a mayor of a town where everyone sings.”

I meet Reich at a coffee shop a few blocks from the Garden before the show. In person, he is affable and cerebral. Dropout, he has said, was an attempt to create a company that lived up to his comedic taste and moral standards. At a time when streaming services have grown overstuffed with content, Dropout makes the case for going niche — if you can call close to 1 million subscribers niche. In a poststrike Hollywood defined by widespread unemployment and bloated CEO salaries, it’s also a model for a talent and business relationship that isn’t exploitative, owing to a profit-sharing program that benefits everyone from talent to the people who clean the studios. It has become an institution to believe in for a generation that grew up not believing in institutions. In April, some fans were bothered when the company announced that the monthly subscription cost would increase $1, from $5.99 to $6.99, but would stay the same for any current subscribers: Couldn’t they also pay the higher rate to better support the performers?

This kind of fierce loyalty has been crucial to Dropout’s growth. It has also come with complications: The more your viewers look up to you, the greater the risk of disappointing them. “I don’t like people putting us on a moral pedestal,” Reich tells me. “A lot of people confuse me for an idealist, but I just want more middle-class media companies to exist.”

The story of Dropout can be traced back to Reich’s own dropout story. When Sam was 14 years old, he became severely depressed. He was floundering at the Buckingham Browne & Nichols School in Cambridge, Massachusetts, whose notable alumni include Netflix founder Reed Hastings and Mindy Kaling (she went to prom with Sam’s brother). He went on Zoloft and got a therapist, but relief didn’t come until the next summer, when he enrolled in the Walnut Hill theater camp. “It blasted me out of my depression,” Reich tells me. “Then the new school year started, and I plummeted again.” At home, he was surrounded by high achievers. His parents had committed their lives to academia — both had spent many years as Harvard professors. His elder brother, Adam, who was class president, would go on to become a sociology professor at Columbia. “I was like, I think I’ll be over here being a clown,” Sam recalls.

Sam was interested in magic and Monty Python; at 7, he discovered “Weird Al” Yankovic, who became his main obsession until Jim Carrey came on the comedy scene. At 10, he happily joined his father for the Washington, D.C., premiere of Batman Forever. After the screening, then-Secretary Reich was stopped by Newt Gingrich; Sam had picked up at home that he was more or less the enemy. His father was cordial, but when he introduced the Speaker of the House to Sam, Sam folded his arms and turned his back to Gingrich. In that moment, Robert says, he realized his son did have “some deep principles. He just wasn’t motivated.”

Before Sam dropped out, his parents enrolled him in the Center for Interim Programs, an organization that specializes in gap years, which allowed him to finish his sophomore year of high school in Oxford, England. While he was there, he got involved with the Burton Taylor Studio, pitching a staging of Waiting for Godot and casting the leads. When his father asked him if the actors knew how old he was, Sam said, “No, they think I’m an undergrad.”

The semester ended, and Sam returned to America. His parents tried to enroll him at Walnut Hill for the school year, but when the administration wouldn’t let him act in shows, or put on his own, he threw a fit. They tried a public school next, hoping his problems stemmed from the high-pressure environments he was in. Nope. One night, his mother was trying to help him with his homework and said, “This really isn’t working, is it?” “I burst into tears,” Reich tells me, “and we started strategizing how maybe I could get my GED and then figure out if college was something I wanted to do down the road.” (It wasn’t.) His father struggled with the decision. “When I was dropping out, he sat me down,” Reich says, “and he was like, ‘You’re good at so many things. Why does it have to be acting?’ My response was ‘I’m also interested in poetry.’ He replied, ‘Acting sounds good.’ ”

Back in Boston, Sam staged a production of Rosencrantz & Guildenstern Are Dead at the Tower Auditorium. This time, he told everybody he was 26. After a successful run, The Improper Bostonian printed an exposé with the headline “Busted!” revealing Sam had been 17 the whole time. He wrote a letter in response demanding a -correction — he was 16.

“Everything in my body was telling me to make art but also to be entrepreneurial,” says Reich, who takes pains to acknowledge the privilege of his dropping-out story. Since he wasn’t going to college, his parents agreed to help him with the money that would’ve gone to his education: $3,000 a month, gradually reduced over time until it was set to run out in 2006. It helped fund Reich’s move to New York and, in 2005, helped him start Dutch West, a sketch-comedy group with cinematic flair that stood out in the era of pre-YouTube online comedy. His work with the group put Reich on CollegeHumor’s radar, and in 2006, he agreed to take over the company’s nascent video operation at age 22, right around when he would have otherwise been graduating from college.

That year, IAC, Barry Diller’s online-media conglomerate, bought the fun-loving, party-photo-and-beer-chugging tips comedy brand for a reported $26 million. IAC and the founders hoped to grow it exponentially. “My mandate was ‘Go viral,’ ” Reich tells me. And it did. The channel found success splitting its content with dude-centric bait (i.e., 2008’s “Why Girls Don’t Fart”) and videos starring its employees, set at the office, called “Hardly Working.” People were watching, but it wasn’t making enough money. “It was like a muscle that had outgrown its arm,” Reich says. The company spent a dispiriting couple of years trying to sell TV shows and movies to traditional Hollywood companies. Then, in 2017, the same year that Seeso, NBCUniversal’s -comedy-only streaming service, failed to make it to its second birthday, IAC decided a -comedy-only streaming service was going to be CollegeHumor’s last shot at a sustainable business model. It named the service Dropout and would invest between $20 million and $40 million in the company over the next two years. The name was a play on -CollegeHumor — it implied a more rebellious departure than calling it something like Graduate.

While CollegeHumor was a channel on YouTube, Dropout would be its own platform. The thinking was that it would need scripted shows to justify the price of a subscription. Reich put a bunch of shows into development, including See Plum Run, the service’s first big scripted offering upon its launch in September 2018. While these shows were premium compared with what was available on YouTube, they couldn’t compete with what was on Netflix. After three months and modest growth, IAC decided to sell. Meetings were set up with media companies and studios; IAC was reportedly looking for $100 million. A company that “rhymes with Schmiacom,” Reich says, offered $3 million for CollegeHumor and Dropout’s back catalogue. By December, not wanting this to extend into another year, IAC was planning to accept the offer. Production would be shut down on all CollegeHumor and Dropout content, adding them to the list of online-media brands put down before they could ever figure out how to make money.

When Reich heard rumblings of the deal, which would have put him out of work and killed the brand he’d spent most of his adult life cultivating, he came up with a proposal. In its first year of operation, Dropout had launched a small number of unscripted games-related shows, meant to fill out the platform while the scripted stuff generated acquisitions. That included Dimension 20. While Dropout’s scripted content was not premium compared to what else was out there, Dimension 20 was something worth paying for in the actual play space. At the time, this space was dominated by shows like Critical Role, a YouTube and Twitch series in which viewers watch as a group of professional voice actors mount yearslong Dungeons & Dragons campaigns. Unlike its podcast and livestream competitors, Dimension 20 was filmed, allowing for additional camerawork and editing; there were close-ups and reaction shots that made the experience of watching people play the game more intimate. It gave the viewer the feeling of hanging out with their friends. Dimension 20 would be instrumental in sustaining the platform’s 75,000 subscribers in its first two years of operation.

Reich wondered if the company could operate with a spartan staff focused exclusively on unscripted content, which was less costly to produce. He made his pitch: IAC sells CollegeHumor, and thus Dropout, to Reich for $0, divesting itself from any financial commitment, and in exchange keeps a minority stake. Over time, he projected, it would make a modest profit that would exceed the $3 million IAC had been offered. IAC accepted Reich’s proposal two days before Christmas. On January 8, 2020, in an event called by those who were there “the CH-apocalypse,” IAC slashed the 105-person staff down to seven. The deal between IAC and Reich closed in March 2020. Later that week, COVID shut down all production.

COVID turned out to be good for business. That March, Reich quickly decided to get the main cast of players (most of whom had recently been fired) equipment to shoot remotely, so Dimension 20 never went a month without a new episode. Those who had been following Dimension 20 tuned in to Game Changer — which had launched the previous fall — to watch the same performers on that series. Reich started posting Game Changer clips to his personal TikTok account, and he noticed they could garner hundreds of thousands of views this way. In the comments of each post, people were asking, “What’s this show?” Dropout created a Dimension 20 account, which is when things really started to build. By the end of 2022, Dropout had around 350,000 subscribers.

Social media has become central to Dropout’s development decisions. Reich and his team established a checklist of questions for new shows: Will it do well on social media? Is it worth nerding out about? All the shows the platform launched in 2022 — Play It by Ear, Dirty Laundry, and Make Some Noise — fit the criteria, but it’s Make Some Noise that affirmed this strategy. Dropout’s version of Whose Line Is It Anyway? is the platform’s most instantly accessible show. Each episode, three improvisers are given a series of shortform prompts made up by Reich, Elaine Carroll (Reich’s wife and former Dutch West collaborator), and a few other -writers. Individual prompts perfectly slot into TikTok, Instagram Reels, and YouTube Shorts. For example, Make Some Noise’s Bechdel Test prompt has 10.5 million views on TikTok alone — but if you watch the show on Dropout, it feels like a cohesive episode of television and not a series of clips. Wysocki, a sort of SoCal stoner version of Jack Black, emerged as the algorithm’s favorite Make Some Noise cast member, which motivated the development team t​o make him a fixture of the entire platform. All Dropout shows are now built with clips in mind.

By the end of 2023, the company had grown its subscriber base by 50 percent. One day that year, Michael Schaubach, a freelance director on Dimension 20, suggested to COO David Kerns that it would be nice if Dropout offered royalties. After doing some research, Kerns went to Reich and Andrew Bridgman, the chief digital officer, and said, “Royalties are very tricky to calculate, and maybe we could do that at some point, but what if in the shorter term we did something like it?” They landed on the idea of profit sharing.

Since the end of 2023, Dropout has shared profits with every person it pays a dollar to. How much a person receives depends on how much the individual made over the year and what their day rate is, but Reich says it ranges from a tenth to a quarter of a person’s total earnings. Full-time staff are also given three two-week-long mandatory paid vacations in which the entire company goes on hiatus so no one receives any emails or requests when they aren’t working. (This decision was agreed on by the staff, who preferred better vacation time over the flexibility to plan trips whenever they wanted.) Dropout pays for auditions, which means it also shares profits with up-and-coming comedians who audition but don’t get cast. “Anybody who’s in our business should be invested in how talent thinks of them,” Reich says. Eighty percent of why he decided on profit sharing is to make sure talent wants to work for Dropout. “What loyalty this will inspire among our people,” he says, smiling. “Then it’s 20 percent ‘Fuck you, David Zaslav,’ ” he adds, referring to the CEO of Warner Bros. Discovery.

Before it was implemented, Reich ran the idea of profit sharing by his father, who has written extensively on the subject. Robert tells me how Sears Roebuck used to profit-share in the 1910s, when the Department of Labor suggested it “as a way of avoiding the labor-management conflicts that were tearing the nation apart.” Some fans like to describe Dropout’s model as socialist, a characterization both Robert and his son reject. It is, after all, a for-profit company. No, Robert says: “It’s a means of saving capitalism.”

Dropout’s rates are competitive and often higher than the going ones for comparable jobs. Performers on its smaller or newer shows get around $2,000 for an episode. For the bigger shows, like Game Changer and Make Some Noise, it’s around $3,000. Very Important People, which demands guests be put in heavy prosthetics and improvise in character for a whole 30-minuteepisode (like John Early and Kate Berlant, who played zombie megachurch owners, or Saturday Night Live’s Bobby Moynihan as a recently unfrozen man), pays from $5,000 to $10,000 an episode. By comparison, CBS’s After Midnight pays $1,400 an episode (SAG scale). Stand-up Gianmarco Soresi tells me that his half-day of shooting Game Changer paid two and half times more than a role on a new Tracy Morgan show on Paramount+. At least one castmember said the main cast of Dimension 20 makes around $7,000 an episode — in part an acknowledgment of their role in the early success of Dropout.

Dropout also produces comedy specials, for which the pay varies by comedian. It paid at least one mid-level comedian $30,000 for a special, which, in the long run, can be a better deal than the $200,000 Netflix offers most stand-ups for a two-year license — in those cases, the streamer doesn’t cover production and promotion (Dropout does), so the stand-up can end up losing money.

Reich wouldn’t share how much he makes a year as the CEO and the host and showrunner of two of the biggest shows on the network. The first year after he bought Dropout, he says, he made $0 because the taxes he owed from acquiring the asset canceled out anything he’d earned. The second year, 2021, he made close to nothing. The third year, 2022, he made more than $1 million. “Ever since that year,” he says, “we started to try to deliberately reduce the amount that’s going to the top.” Profit sharing started in 2023. Zaslav was paid $52 million in 2024, and he doesn’t own Warner Bros. Discovery, let alone appear in an episode of The White Lotus.

In the fourth episode of Game Changer’s current season, Reich introduces a game built around crowdwork. In it, three stand-ups with sizable online followings — Soresi, Jeff Arcuri, and Josh Johnson — call on audience members wearing shirts printed with prompts like ASK ABOUT MY FAITH and ASK ME ABOUT MY FAMILY. Arcuri picks a woman in an ASK ME ABOUT MY LOVE LIFE T-shirt, who shares that she married her college professor, whom she met when she was 20 and he was 38; the interaction is funny and pleasant enough. But throughout the taping, Soresi kept calling back to the woman’s relationship, dumbfounded by how everyone in the audience was cool with the age gap. Later, Soresi heard that the woman had complained about the experience on the Dropout Reddit. Reich checked in with her afterward and said he would cut anything she was uncomfortable with. She was fine with it, but ultimately, he determined that Soresi’s behavior was “bullyish” and removed his portion of the interaction while keeping Arcuri in the edit. (Crowd Control will be spun off into its own series, hosted by -Jacquis Neal, later this year.)

Reich occasionally wonders if Dropout has taken the instinct to please its fans a bit too far. “The audience has maybe encouraged us to create some stuff that’s a bit more comforting by default,” he says. Performers who are part of the Dropout universe tell me they would like it if the material were a bit more challenging. Not that it should go full edgelord, but, to put it in Dropout-friendly terms, right now it can be very Hufflepuff, and it might benefit from being more Slytherin. The stand-ups I spoke to felt a bit boxed in by the feeling that they had to be kinder and more gentle than they are normally (and these are stand-ups generally considered to be kind and gentle). They brought up Nathan Fielder and Tim Robinsonas examples of the type of comedy they would like to see on the service — which is to say, not necessarily politically transgressive but more willing to make the audience squirm. Multiple successful comedians I spoke to who are familiar with Dropout but have not appeared on the service wondered if it would be possible for it to exist as it does but to be a bit cooler — more ironic, more cynical, more grown-up.

Reich says there would be nothing worse than if Dropout started trying to be cool, but he tells me the company is constantly talking about ways to expand the voice without losing the identity. He wants to get more comedians into the fold but doesn’t want to start pulling from stand-ups in the Joe Rogan–verse. What about someone like Stavros Halkias, the lovable, id-driven former Cum Town co-host, who has emerged as a front–runner for the title of Joe Rogan of the left? Reich says his name comes up a lot. To the Fielder suggestion, Reich says he personally just doesn’t like cringe comedy as a viewer. Even though so much of the comedy on Game Changer stems from getting the performers out of their comfort zone, Reich wants the audience to feel comfortable.

Sometimes that’s impossible. In October 2024, fans called to boycott Dropout after the appearance of a guest on Dirty Laundry whom they believed to be Zionist; 1,474 fans signed a petition calling on the company to denounce Zionism. Earlier in the year, the service had raised more than $218,000 for the Palestine Children’s Relief Fund. Reich thought the backlash might blow over. When it didn’t, the company posted a statement on Instagram: “Where Dropout stands is here: Israel is committing genocide against Palestine, and the people of Palestine deserve to be free and safe.” It went on to say, “If there are individuals who perpetuate speech and actions that go against Dropout’s values, they will not be invited back.” The call for a boycott ended, but, predictably, the statement resulted in an even more intense backlash from pro-Israel viewers. After receiving a number of physical and legal threats, Dropout took down the statement, releasing a more vague one that said, “We stand committed as ever to the safety, freedom and lives of the Palestinian people” and “welcome all to our platform who treat others with respect, empathy, and human dignity.”

Sitting on the main stage at Dropout’s Silver Lake studio, Reich is deeply uneasy when I bring this up. Behind him, production staff are putting up the Pee-wee’s Playhouse–esque background that has helped Make Some Noise’s clips flourish online. He calls the decision to release a statement an error in judgment. “It was a hard lesson in how outspoken and political we can afford to be,” he says. With its growth, he continues, Dropout has lost something. “There are a lot of kids who look up to us, and there’s a grief for me in not being able to be an outspoken idealist in all the ways I would like to be.” He adds, “I’m also CEO of a company. There might be something that a comedian out in the world can say that I can’t say because I’m responsible for a lot of people’s welfare.”

The closeness between Dropout and its fans is in some ways the biggest hindrance to its growth. Still, at the moment, Dropout is continuing to grow. Following a period of relative stasis, Game Changer premiered its new season in April, and Dropout acquired 100,000 new subscribers. Kristen Wiig was in talks with Dropout about appearing on Very Important People, and though a schedule couldn’t be worked out, it’s clear that Hollywood talent is curious to play in the Dropout sandbox. With viewership numbersrivaling those of most network late-night shows, especially when social clips are factored in, Dropout will surely become a stop on celebrity press tours, alongside shows like Chicken Shop Date. Reich imagines a world in which Dropout licenses a big sitcom — say Parks and Recreation — that could both bring subscribers and fit in with the platform’s sensibility. But growth, Reich adds, has a cost. “There are 5 million subscribers out there for Dropout, but are there 10?” he wonders. “The biggest argument for growth is as a hedge against shrinking.”

Right now, he’s more concerned with making sure everything they do feels like it couldn’t exist anywhere but Dropout. He worries about shows seeming like video podcasts or drifting into the bland aesthetic of “high-number cable television,” as he puts it, referring to networks like HGTV: “If you’re looking at just budget, Dropout shows and HGTV are not far away from each other.” He’s been discussing a travel-show concept with Wysocki. “We have a good take on it,” Reich says, but the fear is that it ends up feeling too much like general programming. “How do we make sure what we’re doing feels original and funny and of the internet?”

*This story has been updated to clarify pay information for cast members of Dimension 20.

Spoilers of The Last of Us season two episode two follow.

In the past 24 hours, the world lost its moral compass. No, we don’t mean Pope Francis — we’re talking about Joel on The Last of Us. The begrudging foster father, played by Pedro Pascal, was killed by newcomer Abby (Kaitlyn Dever) in the second episode of the show’s second season. Viewers watched in horror as Abby shot Joel in the leg, beat him with a golf club, then ultimately stuck the broken club in his neck with his surrogate daughter, Ellie, watching. If anyone forgot that this show’s M.O. is “How can we break audience members’ hearts into the tiniest little pieces imaginable this week?” the final tableau, with Ellie curled up next to a dead Joel, is a grave reminder. His death occurs early on in The Last of Us Part II, though Abby explains her reasoning while interrogating Joel instead of later in the game.

seeing joel’s body in that bag at the end of the episode pic.twitter.com/szcZ3rxiz3

— zoë rose bryant (@zoerosebryant) April 21, 2025

Online, people are mourning in ways that haven’t been seen since Ned Stark died in June 2011. “It’s all okay bc he’s gonna wake up right?” one person tweeted. “He’s gonna recover and everything will be fine. Joel and Ellie forever right?” No … not Joel and Ellie forever. At least now people who played the game can talk to those who haven’t without the weight of a giant secret on their shoulders.

#TheLastOfUs game players knew this WHOLE TIME that Joel was gonna die and you didn’t warn me?!? pic.twitter.com/fKXD4IwWSA

— Jarett Wieselman (@JarettSays) April 21, 2025

Me watching Joel die even though I played the game #TheLastOfUspic.twitter.com/8c7Q7ddijC

— kira 🍉 (@shivmcavoy) April 21, 2025

Related

• The Video Game Version of Abby Anderson Thinks HBO Made a Wise Choice
• The Last of Us’s New Beginning
• Meanwhile, in Jackson …

If you have tips about the Trump administration’s efforts to remake American science, you can contact Katherine on Signal at @katherinejwu.12.

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For decades, the National Institutes of Health has had one core function: support health research in the United States. But for the past month, the agency has been doing very little of that, despite multiple separate orders from multiple federal judges blocking the Trump administration’s freeze on federal funding. For weeks on end, as other parts of the government have restarted funding, officials at the Department of Health and Human Services, which oversees the NIH, have pressed staff at the agency to ignore court orders, according to nearly a dozen former and current NIH officials I spoke with. Even advice from NIH lawyers to resume business as usual was dismissed by the agency’s acting director, those officials said. When NIH officials have fought back, they have been told to heed the administration’s wishes—or, in some cases, have simply been pushed out.

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The lights at the NIH are on; staff are at their desks. But since late January, the agency has issued only a fraction of its usual awards—many in haphazard spurts, as officials rushed grants through the pipeline in whatever limited windows they could manage. As of this week, some of the agency’s 27 institutes and centers are still issuing no new grants at all, one NIH official told me. Grant-management officers, who sign their name to awards, are too afraid, the official said, that violating the president’s wishes will mean losing their livelihood. (Most of the officials I spoke with requested anonymity, out of fear for their job at the agency, or—for those who have left—further professional consequences.)

[Read: The erasing of American science]

NIH lawyers have told officials at the agency that to comply with court orders, they must restart grant awards and payments. But HHS officials have handed down messages too, several current and former NIH officials told me: Hold off. Maintain the pause on grants. And the NIH’s acting director, Matthew Memoli, who until January was a relatively low-ranking flu researcher at the agency, has instructed leadership to stick to what HHS says. Memoli, HHS, and the NIH did not respond to requests for comment.

NIH officials are used to following cues from their director and from HHS. But they were also used to their own sense of the NIH’s mission—to advance the health of the American people—being aligned with their leaders’. For weeks now, though, they have been operating under an administration ready to dismantle their agency’s normal operations, and to flout court orders to achieve its own ends.

As the freeze wore on, one former NIH official told me, some people at the agency recalled a mantra that Lawrence Tabak, the NIH’s longtime principal deputy director, often repeated to colleagues: As civil servants, your role is not to call the policies, but to implement them. That is your duty, as long as you’re not doing something illegal or immoral. The NIH’s expert staff might have their own ideas about how to allocate the agency’s funds, but if political leaders chose to pour money into a pet project, that was the leaders’ right. This time, though, many at the NIH have started wondering if, in implementing the policies they were told to, they were crossing Tabak’s line. Over and over, the former NIH official told me, “We were asking ourselves: Are we there yet?”

Without the ability to issue research grants, the NIH effectively had its gas line cut. The agency employs thousands of in-house scientists, but a good 80 to 85 percent of its $47 billion budget funds outside research. Each year, researchers across the country submit grant proposals that panels of experts scrutinize over the course of months, until they agree on which are most promising and scientifically sound. The NIH funds more than 60,000 of those proposals annually, supporting more than 300,000 scientists at more than 2,500 institutions, spread across every state. This system backed the creation of mRNA-based COVID vaccines and the gene-editing technology CRISPR; it supported 99 percent of the drugs approved in the U.S. from 2010 to 2019. The agency has had a hand in “nearly all of our major medical breakthroughs over the past several decades,” Taison Bell, a critical-care specialist at UVA Health, told me.

That system ground to a halt by late January, after the Trump administration paused communications across HHS on January 21, and a memo released from the Office of Management and Budget just days later froze funding from federal agencies. The NIH stopped issuing new awards and began withholding funds from grants that had already been awarded—money that researchers had budgeted to pay staff, run experiments, and monitor study participants, including, in some cases, critically ill patients enrolled in drug trials.

Several of the agency’s top officials immediately sought advice from Tabak, who served as interim director from December 2021 to November 2023, and had long been a liaison between the agency and HHS. But Tabak openly admitted, several officials told me, that his power in this moment was limited. Although he had been the obvious choice to act as the NIH’s interim leader after Monica Bertagnolli, the most recent director, stepped down, the Trump administration hadn’t tapped him for the position. In fact, several officials said, the administration had ceased communicating with Tabak altogether. (Tabak declined to comment for this story.)

The role of acting director had instead gone to Memoli, who had no experience overseeing awards of external grants or running a large agency. But, officials said, Memoli had expressed beliefs that seemed to align with the administration’s. In 2021, he had called COVID vaccine mandates “extraordinarily problematic” in an email to Anthony Fauci (then director of the NIH’s National Institute of Allergy and Infectious Diseases) and reportedly refused the shot himself; last spring, Jay Bhattacharya, Donald Trump’s nominee to lead the NIH, praised Memoli on social media as “a brave man who stood up when it was hard.” And last year, Memoli had been deemed noncompliant with an internal review, two officials said, after he submitted a DEI statement calling the term “offensive and demeaning.”

[Read: A new kind of crisis for American universities]

From the moment of his appointment, Memoli became, as far as other NIH staff could tell, “the only person the department or the White House was speaking directly to” on a regular basis, one former official said. And the message he passed along to the rest of the agency was clear: All NIH grants were to remain on pause.

That position was at odds with a growing number of court orders that directed the federal government to resume distributing federal funds. Some of those orders included painstaking, insistent language usually reserved for defendants who seem unlikely to comply, Samuel Bagenstos, who until December served as general counsel to HHS, told me. In written correspondence with senior NIH leadership in early February, current HHS lawyers, too, interpreted the court’s instructions unambiguously: “All stop work orders or pauses should be lifted so contract or grant work can continue” and contractors and grantees could be paid. In other words, put everything back the way it was.

Government lawyers aren’t the final arbiters on what’s legal. But the National Science Foundation, for instance, unfroze its funding on February 2. And the independent lawyers I spoke with agreed with what HHS counsel advised. The continuation of the NIH freeze “is unambiguously unlawful,” David Super, an administrative law expert at Yale University and Georgetown University, told me. The money that Congress appropriates to federal agencies each year is intended to be spent. “If they’re holding it back for policy reasons,” Super said, “they’re violating the law.”

At a meeting on February 6, several of the agency’s institute and center directors demanded that Memoli explain the NIH’s continued freeze. David Lankford, the NIH’s top lawyer, said that the position of the general counsel’s office aligned with that of the courts: Grants should be “awarded as intended.”

But Memoli called for patience, officials with knowledge of the meeting told me. He was waiting for one thing in particular to restart grant funding: He had tasked Michael Lauer, the deputy director of the NIH’s Office of Extramural Research, which oversees grants, to draft a formal plan to make the agency’s funding practices consistent with Trump’s executive orders on gender, DEI, foreign aid, and environmental justice. (Lauer declined to comment for this story.)

Squaring those orders with the NIH’s mission, though, wasn’t straightforward. One sticking point, officials said, was funding for research into health disparities: If the administration’s definition of DEI included studies that acknowledged that many diseases disproportionately affect Americans from underrepresented backgrounds, complying with Trump’s orders could mean ignoring important health trends—and broad cuts in funding across many sectors of research. Cancer, for instance, disproportionately affects and kills Black Americans; men who have sex with men are the population most affected by HIV. “To pretend that entire communities don’t exist—in health, that doesn’t make sense,” Bertagnolli, the former NIH director, told me.

In several discussions that followed, officials with knowledge of those conversations said, Memoli assured NIH officials that health-disparity research could continue, as long as the inclusion of diverse populations in studies was “scientifically justifiable.” But given the administration’s disregard of scientific norms up until this point, “nobody was particularly satisfied by that explanation,” one former official told me.

Still, on February 7, Memoli yielded a bit of ground: He green-lighted the NIH to start issuing a small subset of grants for clinical trials. That allowance fell far short of Lankford and other lawyers’ recommendation to resume grant funding in full—but some officials wondered if the ice had begun to thaw.

That afternoon, Memoli acknowledged to other NIH officials that he understood what the agency’s lawyers were telling him, an official with knowledge of the meeting told me. But then, he offered an alternative justification for holding back the agency’s funds. What if, he said, the halt was continuing, not because the agency was adhering to the president’s executive orders, but because it was pursuing a new agenda—a new way of thinking about how it wanted to fund research? Such shifts take time; surely, the agency couldn’t continue its work until it had reoriented itself.

The lawyers were unmoved. At best, they said, that argument came off as a thinly veiled attempt to disregard court orders. Memoli contemplated this. He had no choice, he insisted: He was following the directions of three HHS officials—Dorothy Fink, then the acting secretary; Heather Flick Melanson, chief of staff; and Hannah Anderson, deputy chief of staff of policy—who had told him, in no uncertain terms, that the pause was to continue, save for the few award subtypes he’d already okayed. In other words, the Trump administration’s political leadership at HHS wanted funding to stay frozen, and that overruled any legal concerns.

And, as officials learned later that day, HHS officials had been planning new ways to limit NIH funding. That afternoon, they foisted a new policy on the NIH that would abruptly cap the amount of funding that could be allocated to cover researchers’ and universities’ overhead. The first Trump administration had tried to cut those “indirect cost” rates in 2017; in response, Congress had made clear that altering them requires legislative approval. And so within days, yet another temporary restraining order had blocked the cap.

[Read: The NIH memo that undercut universities came directly from Trump officials]

By this point, NIH lawyers were grim in their prognosis. If the agency moved forward with slashing indirect cost rates, they explained, individual staff members could be prosecuted for failing to comply with a congressional directive. On February 10, Sean R. Keveney, HHS’s acting general counsel, sent a memo to Flick Melanson that included a directive in bold, italicized font: All payments that are due under existing grants and contracts should be un-paused immediately.

Two days later, Lauer, the extramural-research director, issued a memo authorizing his colleagues to resume issuing awards—what should have been the agency’s final all-clear to return to normalcy.

Even then, the staff remained divided on how to proceed. Some institutes immediately began sending out awards: Lauer’s email spurred one institute, a current official told me, to process 100 grants in a single afternoon. Others, though, still held back. “They’re scared out of their minds,” the official told me. Some worry that, despite what Memoli has said, they’ll be held accountable for somehow violating the president’s wishes, and be terminated.

So far, at least 1,200 federal workers—many of them on probationary status—have been fired from the NIH; a new OMB memo released yesterday indicates that more layoffs are ahead. On February 11, HHS also attempted to unceremoniously reassign Tabak, the deputy director, to an essentially meaningless senior advisory position to the acting HHS secretary, with an office in another city, far from the laboratory he ran at the agency—a demotion that several NIH officials described to me as an insult. Tabak chose instead to retire that same day, abruptly ending his 25-year stint at the agency; Lauer, who had worked closely with Tabak for years, announced his own resignation that same week.

Their departures left many at the agency shocked and unmoored, several former and current officials told me: If Tabak and Lauer were out, was anyone’s position safe? And because Lauer left immediately after clearing his colleagues to issue grants, who would ensure that the agency’s core business would continue? “We’re all still terrified for our jobs,” one current official told me. Agency hallways, where colleagues once chatted and laughed, have sunk under an uncomfortable silence: “No one knows who they can trust.”

The administration has also kept up its attempts to block NIH grants. Even after Lauer’s memo went out, HHS continued to bar agency officials from posting to the Federal Register, the government journal that publishes, among other things, the public notices required by law for meetings in which experts review NIH grant applications and issue funds, one official told me. The NIH might have been allowed to award grants, but logistically, it was still unable to. Finally, on Monday, Memoli announced in a leadership meeting that the agency could resume submitting to the Federal Register. But there were limits: Although officials could post notice of some meetings to review grant proposals, meetings to finalize funding recommendations were still off the table—meaning the NIH would still be in a grant backlog. “We can’t go crazy and put all our meetings on,” Memoli told his colleagues. But if agency personnel responded to this new allowance reasonably, he said, they’d be granted more liberty.

[Read: Grad school is in trouble ]

To Super, the administrative lawyer, curtailing posting to the Federal Register constituted yet another strategy intended to circumvent court orders. “These aren’t legitimate workarounds,” he said. “This is contempt of court.” The NIH’s developing plan to align the agency’s strategies with the president’s executive orders—which, officials told me, is still awaiting formal HHS approval—may end up being a legal battleground too: On Friday, a federal judge declared Trump’s executive order attacking DEI programming a potential violation of the First Amendment.

The longer the pause on NIH funding has dragged on, the more the American research community has descended into disarray. Universities have considered pausing graduate-student admissions; leaders of laboratories have mulled firing staff. Diane Simeone, who directs UC San Diego’s cancer center, told me that, should the pause continue for just a few more weeks, dozens of clinical trials for cancer patients—sometimes “a patient’s best chance for cure, and long-term survival,” she told me—could be at risk of shutting down.

Even if courts ultimately nullify every action that the Trump administration has taken, the NIH—at least in its current form—may remain in jeopardy. Robert F. Kennedy Jr., now the leader of HHS, has said that he wants to shift the agency’s focus away from infectious disease and downsize the staff. Some Republicans have been pressing for years to slash the number of institutes and centers at the agency, which depends on Congress for its budget, or to disburse its funding to the states as block grants—a change, Bertagnolli told me, that could mean biomedical research in America “as we know it would end.”

At a meeting with NIH leadership on February 13, Memoli explained to officials that “we are going to have to accept priorities are changing.” He didn’t say what those changing priorities might be, but previewed an era of “radical transparency,” language that would headline an executive order from Trump just days later. In this moment, federal judges were “hampering us” from moving forward, into the agency’s future, Memoli said. But the path before them remained the same: The NIH would do as the nation’s leaders wished.

Six months. Five-hundred-seventy-six applications. Twenty-nine responses. Four interviews. And still, no job. When my younger brother rattled off these numbers to me in the fall of 2023, I was dismissive. He had recently graduated with honors from one of the top private universities in the country into a historically strong labor market. I assured him that his struggle must be some kind of fluke. If he just kept at it, things would turn around.

Only they didn’t. More weeks and months went by, and the responses from employers became even sparser. I began to wonder whether my brother had written his resume in Comic Sans or was wearing a fedora to interviews. And then I started to hear similar stories from friends, neighbors, and former colleagues. I discovered entire Subreddits and TikTok hashtags and news articles full of job-market tales almost identical to my brother’s. “It feels like I am screaming into the void with each application I am filling out,” one recent graduate told the New York Times columnist Peter Coy last May.

As someone who writes about the economy for a living, I was baffled. The unemployment rate was hovering near a 50-year low, which is historically a very good thing for people seeking work. How could finding a job be so hard?

The answer is that two seemingly incompatible things are happening in the job market at the same time. Even as the unemployment rate has hovered around 4 percent for more than three years, the pace of hiring has slowed to levels last seen shortly after the Great Recession, when the unemployment rate was nearly twice as high. The percentage of workers voluntarily quitting their jobs to find new ones, a signal of worker power and confidence, has fallen by a third from its peak in 2021 and 2022 to nearly its lowest level in a decade. The labor market is seemingly locked in place: Employees are staying put, and employers aren’t searching for new ones. And the dynamic appears to be affecting white-collar professions the most. “I don’t want to say this kind of thing has never happened,” Guy Berger, the director of economic research at the Burning Glass Institute, told me. “But I’ve certainly never seen anything like it in my career as an economist.” Call it the Big Freeze.

[Jonathan Chait: The real goal of the Trump economy]

The most obvious victims of a frozen labor market are frustrated job seekers like my brother. But the indirect consequences of the Big Freeze could be even more serious. Lurking beneath the positive big-picture employment numbers is a troubling dynamic that threatens not only the job prospects of young college graduates but the long-term health of the U.S. economy itself.  

The period from the spring of 2021 through early 2023, when employees were switching jobs like never before, was a great time to be an American worker. (Remember all those stories about the Great Resignation?) It was also a stressful time to be an employer. Businesses struggled to fill open positions, and when they finally did, their newly trained employees might quit within weeks. “It’s hard to overstate the impact this period had on the psyche of American companies,” Matt Plummer, a senior vice president at ZipRecruiter who advises dozens of companies on their hiring strategies, told me. “No one wanted to go through anything like it again.” Scarred by the chaos of the Great Resignation, Plummer and others told me, many employers grew far less willing to either let go of their existing workers or try to hire new ones.

Even as they were still shaken by the recent past, employers were also growing warier about America’s economic future. In March 2022, the Federal Reserve began raising interest rates to tame inflation, and the business world adopted the nearly unanimous consensus that a recession was around the corner. Many companies therefore decided to pause plans to open new locations, build new factories, or launch new products—all of which meant less of a need to hire new employees.

Once it became clear that a recession had been avoided, a new source of uncertainty emerged: politics. Recognizing that the outcome of the 2024 presidential election could result in two radically different policy environments, many companies decided to keep hiring plans on hold until after November. “The most common thing I hear from employers is ‘We can’t move forward if we don’t know where the world is going to be in six months,’” Kyle M. K., a talent-strategy adviser at Indeed, told me. “Survive Until ’25” became an unofficial rallying cry for businesses across the country.

By the end of 2024, the pace of new hiring had fallen to where it had been in the early 2010s, when unemployment was more than 7 percent, as Berger observed in January. For most of last year, the overall hiring rate was closer to what it was at the bottom of the Great Recession than it was at the peak of the Great Resignation. But because the economy remained strong and consumers kept spending money, layoffs remained near historic lows, too, which explains why the unemployment rate hardly budged.

Look beyond the aggregate figures, and the hiring picture becomes even more disconcerting. As the Washington Post columnist Heather Long recently pointed out, more than half of the total job gains last year came from just two sectors: health care and state and local government, which surged as the pandemic-era exodus to the suburbs and the Sunbelt generated demand for teachers, firefighters, nurses, and the like. According to an analysis from Julia Pollak, the chief economist at ZipRecruiter, hiring in basically every other sector, including construction, retail, and leisure and hospitality, is down significantly relative to pre-pandemic levels. Among the hardest-hit professions have been the white-collar jobs that have been historically insulated from downturns. The “professional and business services” sector, which includes architects, accountants, lawyers, and consultants, among other professions, actually lost jobs over the past two years, something that last happened during the recession years of 2008, 2009, and 2020. The tech and finance sectors have fared only slightly better. (The rise of generative AI might be one reason the hiring slowdown has been even worse in these fields, but the data so far are equivocal.)

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A job market with few hiring opportunities is especially punishing for young people entering the workforce or trying to advance up the career ladder, including those with a college degree. According to a recent analysis by ADP Research, the hiring rate for young college graduates has declined the most of any education level in recent years. Since 2022, this group has experienced a higher unemployment rate than the overall workforce for the first sustained period since at least 1990. That doesn’t change the fact that college graduates have significantly better employment prospects and higher earnings over their lifetime. It does, however, mean that young college graduates are struggling much more than the headline economic indicators would suggest.

For job seekers, a frozen labor market is still preferable to a recessionary one. My brother, for example, eventually found a job. But the Big Freeze is not a problem only for the currently unemployed. Switching from one job to another is the main way in which American workers increase their earnings, advance in their careers, and find jobs that make them happy. And indeed, over the past few years, wage growth has slowed, job satisfaction has declined, and workers’ confidence in finding a new job has plummeted. According to a recent poll from Glassdoor, two-thirds of workers report feeling “stuck” in their current roles. That fact, along with a similar dynamic in the housing market—the percentage of people who move in a given year has fallen to its lowest point since data were first collected in the 1940s—might help explain why so many Americans remain so unhappy about an economy that is strong along so many other dimensions.

This is a warning sign. The historical record shows that when people are hesitant to move or change jobs, productivity falls, innovation declines, living standards stagnate, inequality rises, and social mobility craters. “This is what worries me more than anything else about this moment,” Pollak told me. “A stagnant economy, where everyone is cautious and conservative, has all kinds of negative downstream effects.”

According to economists and executives, the labor market won’t thaw until employers feel confident enough about the future to begin hiring at a more normal pace. Six months ago, businesses hoped that such a moment would arrive in early 2025, with inflation defeated and the election decided. Instead, the early weeks of Donald Trump’s presidency have featured the looming threat of tariffs and trade wars, higher-than-expected inflation, rising bond yields, and a chaotic assault on federal programs. Corporate America is less sure about the future than ever, and the economy is still frozen in place.