You may recall that the huge Corinthian College for-profit chain closed down last year, stranding over 16,000 students who were saddled with debt and worthless credits. The bankruptcy was precipitated when the U.S. Department of Education cut off federal funding after investigations revealed numerous frauds.
Now the ITT chain of for-profit colleges is going belly-up, after the Feds pulled the plug. The move leaves 35,000 students and employees out of luck. The students will have difficulty transferring their credits to another college or university since the for-profits are not respected by established institutions.
“Just days before the start of a new school term, ITT Educational Services, one of the nation’s largest for-profit educational companies, closed nearly all its campuses on Tuesday.
“The company cited the Education Department’s recent decision to bar the chain of colleges from using federal financial aid to enroll new students as the reason for the sudden shutdown.
“Except for a small school that operates under a different name, the move puts an end to an operation that has been accused of widespread fraud and abuse, leaving roughly 35,000 students and 8,000 employees in the lurch.
“ITT Educational Services, whose recruitment, lending practices and educational quality have been under scrutiny by federal regulators and state prosecutors for years, said in a news release that it had “exhausted the exploration of alternatives, including transfer of the schools to a nonprofit or public institution.””
Given their long-standing record of fraud, false promises, worthless degrees, predatory recruitment of veterans and low-income students, why did the Education Department allow them to get federal aid for so many years? At long last, accountability. Only the students are left holding the bag.
Diane Ravitch's blog 
http://blog.ed.gov/2016/09/message-secretary-education-itt-students/
“We are committed to helping you as you consider next steps. Most immediately, you have two basic options to choose between:
If you are currently or were recently enrolled at ITT, you may be eligible to have your federal student loans for your program at ITT discharged. Your federal loan debt will be wiped away and you will have the option of restarting your education somewhere new. We will post and update information about how to receive a discharge at our ITT announcements page.
If you wish to continue and complete your program at a different school – especially if you are close to graduating – you may be able to transfer your credits. It is important to note that transferring your credits may limit your ability to have your federal loans discharged. Closed school discharge may be an option if you enroll in a different program that does not accept your ITT credits.”
LikeLike
They blamed the closure on Federal
Regulations.
Implying these regulations were over the top –oppressive and abusive.
Not that they could admit they weren’t following any of the reasonable guidelines which ensure a proper education for their enrollment.
While I am sorry for the employees who find themselves out of work (but what else could you expect after selling your soul to the devil),
Ultimately this closure does the students a favor – now they can enroll in a “real” school.
LikeLike
“Only the students are left holding the bag.” And the US taxpayers for several million dollars of loans forgiven due to this poorly run for profit school.
LikeLike
The Corinthian loans haven’t been forgiven, so, sadly, I don’t see those students at ITT getting their money back, either.
LikeLike
Here is a link to the ITT shutdown article in Inside Higher Education. They recount phone conversations between themselves and (1) an ITT representative, and (2) a DOE representative, ,which I have snipped below.
ITT REP: “‘Today, we know by our experience that a U.S. institution or business can be forced to shut down without proof of allegations,’ said Kevin Modany, chief executive officer for ITT Educational Services, in a call with reporters. ‘The regulatory assault on our schools and institutions is unprecedented …. We have had no right to pursue our right to due process, and this should be concerning to all Americans.'”
DOE REP: “‘It wasn’t a decision we took lightly,’ said U.S. Under Secretary of Education Ted Mitchell in a phone call with reporters. ‘Ultimately, our responsibility is not to any individual institution. It’s to protect all students and taxpayers, and I have no doubt our decision to take action was the right one.'”
https://www.insidehighered.com/news/2016/09/07/itt-tech-shuts-down-all-campuses?utm_source=Inside+Higher+Ed&utm_campaign=2efe45949d-DNU20160907&utm_medium=email&utm_term=0_1fcbc04421-2efe45949d-198488425&mc_cid=2efe45949d&mc_eid=f743ca9d07
LikeLike
The irony is that UnderSecretary Ted Mitchell is one of the most prominent supporters of corporate reform, previously served on the board of a for-profit college in addition to being CEO of NewSchools Venture Fund, which promotes charters and charter chains.
LikeLike
To Diane Ravitch who replies my snip from “Inside Higher Education:” The irony is that Under Secretary Ted Mitchell is one of the most prominent supporters of corporate reform, previously served on the board of a for-profit college in addition to being CEO of NewSchools Venture Fund, which promotes charters and charter chains.”
Irony, indeed. Or perhaps a new understanding on the part of T. Mitchell. We can hope.
LikeLike
For-profit tech credentialing company Coding Dojo Wednesday announced a scholarship program for more than 35,000 students who were negatively impacted by this week’s closure of ITT Technical Institute.
The swift move backs industry insiders’ projections that alternative credentialing providers and bootcamps could be the next generation of for-profit institutions.
Many of the credits earned at ITT Tech are not transferable to traditional nonprofit institutions, meaning many students are looking for new education options and may have to start from scratch with degree or credentialing programs.
http://www.educationdive.com/news/doors-open-for-next-generation-of-for-profit-institutions-with-itt-tech-clo/425927/
LikeLike
They will probably get several years of profiteering before the government realizes their credentials have little value. The government will play whack a mole with other for profits rather than taking action against the industry, since so many representatives are on the lobby payroll. Once again, taxpayers will be on the hook for millions of waste and fraud.
LikeLike
This is interesting:
It’s for-profit college students discussing their experiences. I like it because they’re helping one another- sharing information. It’s just one of tens of places they congregate and share stories. You’ll be amazed at some of the tactics.
This went on FOR YEARS. Regulators did nothing. Congress issued report after report, there were public television exposes- they ALL knew it was happening.
No one else was stepping up, so they spread the word themselves. Good for them.
They deserve better advisers. They were ill-served by the people they hired to represent them.
LikeLike
I think there is more to the story than either side is willing have known. Yes, ITT is a for -profit school and yes, their students receive federal aid and yes, the school overcharges for their programs that are essentially AA degrees. It’s been going on for a long time now and many people have known. There is something missing in this story and it smells fishy. I don’t trust a thing that John King does or says. There is something that he has plans for that will line the pockets of his closest friends and allies by sending ITT into oblivion. I’m waiting for an announcement very soon. And for anyone that thinks that I’m wearing my tin-foil hat…..I wear it proudly….but mark my words…something else is on the horizon with this.
LikeLike
Banks win. They made millions off student loans. ITT owners win. They walk away unscathed and with ample past compensation and a secure future. Federal regulators win. They get to look like they did their job. Free market politicians win. They can brag about “running a school like a business” and point to ITT as creative destruction. Public good advocates win. They see another for-profit gone.
Students lose. They are left with loans and nothing. Adjunct professors lose. They scramble to find new gigs for minimum wage.
So goes our education system. What really happened here?
LikeLike