19 ms·

ITT Technical Institutes Shuts Down

487 points by jlas 10y ago

dccoolgai 10y ago
"It will now likely rest on other parties to understand these reprehensible actions and to take action to attempt to prevent this from happening again." Indeed.
peterhadlaw 10y ago
As an alum of IIT (Chicago)... This is extra, great news.
- tptacek 10y ago
  Why'd you go? What'd you study? What was the experience like? (I have a single semester at UIC and no other college).
  - larrywright 10y ago
    I'm pretty sure he's referring to Illinois Institute of Technology (http://web.iit.edu http://web.iit.edu), and the fact that the name confusion doesn't act in his favor. I didn't attend, but I've been on the campus and it seems like a pretty great school.
    - tptacek 10y ago
      D'oh. I'm pretty sure you're right. Thanks!
    - tamana 10y ago
      That confusing with Indian Institute of Tech should help though. That's a top school in India
      - peterhadlaw 10y ago
        Hence "(Chicago)" ;)
    - peterhadlaw 10y ago
      You are correct, I'm referring to Illinois Institute of Technology! :)
      - ianai 10y ago
        I can empathize a bit. I went to the New Mexico Institute of Mining and Technology. It's an excellent school - on par with MIT in its eyes. The name recognition's not there where I live right now, though. It's not helped me find work.
  - jotato 10y ago
    I graduated from ITT 11 years ago. Care if I chime in? * Why did I go? I was just out of high-school and I wanted to be a software engineer. I looked at the local university (Robert Morris in Pittsburgh, PA), but I didn't like their program. I was one of those kids who started tinkering with programming at 12 by making Pokemon fan sites :) 4 Years at a university studying a generic comp-sci degree didn't appeal to me. ITT offered a degree in Software Applications and Programming. It was what I was looking for. * What did I study? As mentioned, Software Applications and Programming. Aside from the core classes (English, Calc, Trig, etc...) there were 2 OS classes, 2 VB, 2 C++, 2 Java, 2 webdev and 1 data structures class. at 18, this is what I was looking for. A few classes to teach me the basics in those areas and let me chase down the rest. * What was it like? I don't have a single word to describe it, and when people ask me in person I find that I can take a good 20 minutes describing it. I'll do my best to sum it up. disclaimer: they kept 3 students on hand as lab assistants and I was one for most of my two years there. Basically, we helped out the professors as needed and offered to help tutor. It paid something like $8/hr. My opinion may be skewed because of that. - It was 100% for profit, and you could tell. Professors wouldn't really be allowed to fail students. It always bothered me that someone who only came to class on the first and last days was able to "barely pass" - "Testing out" was frowned upon. You could do it, but you needed permission from the Dean, and meet with the professor and "career services" before you took the test. I was told you had to pass with a 100% to test out - I can't really vouch for that since I never tried. - "Career Services" was a bit of a joke. It was 3 ladies who would critic your resume and let you know if they had heard of any job opening. Don't get me wrong, they were really nice people who wanted to help. I just didn't get much value from them. Sometimes local companies would come to ITT to post job openings. CS would at least email those out to you if you wanted. - The classes were basic - "topic for dummies" basic. I'm no genius, but I didn't have to take notes. I don't know if it was that I had already been learning for 7 years before ITT or what, but I didn't really learn many new things there. It was kind of two years of review. I may be wrong on this one; I just don't have any memories of struggling to learn something. - The professors and staff were nice. They did want to see you succeed. - Credit transfers. They were upfront most colleges wouldn't transfer credits, but rumor had it the local university would take a few. Mainly the cores (maths, english, etc..) * Final thoughts? - Would I go again? No - Would I tell other people to go? No - Was it worth it? Yes. I did get a degree. It isn't prestigious and I don't care. I was able to have a job lined up (in my field) before graduation. Fast forward to today and I have moved to the other side of the country. I have a great family, a good consulting job, and the confidence I need to build any software you want. How much of that was ITT, and how much was my own sweat and blood? I don't know. What I do know is I would not have been hired at the same place right out of college. Which means I wouldn't have made the connections I did which led to me moving across the country. edit: I see a few topics regarding loan forgiveness because of fraud. I experienced no such thing. Sure, the recruiters made a few statements that I consider un-true. But i wouldn't call it fraud. They did provide an education. (It may not have been the best) and they did try to place you in a job (they can't place everybody!) Ultimately, it was on me for borrowing money; not the school
- jcranmer 10y ago
  IIT (Illinois Institute of Technology) or ITT (Technical Institutes)?
  - abrowne 10y ago
    I think they are implying that now people won't think of ITT when they say they're an alum of IIT.
  - deleted 10y ago
    [deleted]
  - idsout 10y ago
    Pretty sure this is why OP is glad ITT exists no longer. Someday people won't confuse their respectable college with ITT.
tickthokk 10y ago
As a 2005 graduate of ITT, I'm glad. This was a long time coming. Now if only I could get my loans refunded :p
- jacquesm 10y ago
  From TFA: "Other former students are pushing to have their debts canceled by alleging that the company defrauded them into taking out the debt by advertising false job-placement rates." So it looks like you might have a chance.
  - ianai 10y ago
    That seems like something you couldn't sue over and win. At this point the beef exists between student and financer.
- Unbeliever69 10y ago
  Check out the DOE website. You most likely will be able to get some student loan forgiveness.
  - tickthokk 10y ago
    Thanks, I took a look, and that's great information for any current student, or students with outstanding loans. However, I was mostly joking; I've actually already paid them off completely, years ago, which wouldn't have been possible without my lovely wife. So the word "refund" was used purposefully, and getting one is likely improbable, haha. For years it was always a struggle of bashing ITT with my colleagues/the internet, but talking them up with potential employers. The only thing $40k of debt got me was the perceived prestige an employer likely already had of ITT. Now that they're defunct there's definitely no up-selling them.
    - jotato 10y ago
      I graduated in 2005 from ITT in Pittsburgh and the total cost was a hair under 28K. I got a few grants, but had less than 20K in debt when I graduated. Was the pricing really that different where you went? Also, that was over 10 years ago. I haven't had any employer really care that I went to ITT. Honestly in the last 5 or 6 years no employer even asked where I went. Where I am now most care about real world experience; not where you graduated. I don't know where I am going with this...
kayla210 10y ago
I really feel for all the students who are so close to graduating and not knowing if they'll have anything to show for it.. And their credits will most likely not transfer to another school because of the different accreditations.
- tptacek 10y ago
  That their credits had virtually no chance of transferring to any other institution --- a point ITT was forced to make on its own website --- is a pretty good reason not to allow it to be the beneficiary of billions of dollars of public financing.
  - dionidium 10y ago
    It's on this page, for the curious: http://programinfo.itt-tech.edu/consumerinfo/ http://programinfo.itt-tech.edu/consumerinfo/
    - criddell 10y ago
      Why didn't ITT seek accreditation so that credits were transferable? It seems like it would instantly increase the value of what they are selling.
      - dragonwriter 10y ago
        > Why didn't ITT seek accreditation so that credits were transferable? Accreditation and transferability are different issues; ITT was accredited (were it not, it could not have participated in federal aid programs.) > It seems like it would instantly increase the value of what they are selling. Like Corinthian, what they were selling was largely fantasies, specifically targeted to demographics who were unlikely to recognize that they were fantasies. Were ITT intending to sell a legitimate education, sure, transferability would increase the value, but they were never going to sell legitimate education at the mass-market volume and premium prices they were trying to sell at.
      - logfromblammo 10y ago
at-fates-hands 10y ago
I live in Minneapolis and the City Pages did quite an exposé on them back in 2015. It was pretty eye opening and gives a really good glimpse into their tactics: http://www.citypages.com/news/itt-tech-sells-an-american-dream-of-broken-lives-and-financial-ruin-7463804 http://www.citypages.com/news/itt-tech-sells-an-american-dre...
- deleted 10y ago
  [deleted]
gigatexal 10y ago
Yes! What a shameful institution.
JulianMorrison 10y ago
Every student's loans to these slimy operators should be simply struck off with no penalty.
- qaq 10y ago
  Why should avg. taxpayer take on this burden?
  - miiiiiike 10y ago
    Because the federal government allowed ITT to participate in the student aid programs.
    - johnward 10y ago
      The government approved loans to the school. They carry some of the burden. They should be taking every asset from ITT first but I know that they will have none somehow and the execs will walk away with multiple millions. Disclaimer: attended ITT and paid off the fed loan. Still paying on a parent plus that I doubt would qualify for forgiveness.
  - warmblood 10y ago
    Because the burden on your (so-called) average taxpayer of having a stagnant, debt-crippled workforce is greater and worse to bear in the long term.
    - clarkmoody 10y ago
      But let's not make those taxpayers foot the exploding costs of tuition caused by access to so much easy money.
      - warmblood 10y ago
        This is a mostly incoherent comment; enough so that I can only read into it what your profile statement gives away about your inclinations.
loco5niner 10y ago
Good.
koolba 10y ago
Question for lawyers in the audience: If ITT is shut down because the "education" it was providing was complete shit and not recognized anywhere else, does that mean that the usual rules about education related personal debt surviving bankruptcy wouldn't apply?
- tamana 10y ago
  There are various ways to get loan forgiveness for these loans, for reasons as you suggest, before the bankruptcy question. But pity the fool who paid off their loan and is now bankrupt.
  - koolba 10y ago
    > But pity the fool who paid off their loan and is now bankrupt. Sadly that's becoming more and more common a trend in this country. It's the same as all the poor chaps who kept trying to pay their underwater mortgages while they're neighbors squatted for free. Honest Joe seems to never catch a break :(
JoeAltmaier 10y ago
Next, go after the public colleges? Other than brand, do they do a better job? Spend more than 30% of income on actual educational expenses (like IIT does)? I doubt it. {edit} Seems like US Universities are about 1:1 faculty vs staff. Up from 2:1 40 years ago.
- qaq 10y ago
  Given the continuous grows of administrative personal and cutting of faculty positions the quality of the job they do is deteriorating quickly.
- GFK_of_xmaspast 10y ago
  How about 'fully funding public colleges' instead so that kids don't have to go into crippling debt to go there.
  - logfromblammo 10y ago
    Judging by history, this would be seen as a license to artificially inflate costs, such that the university system would become a machine for extracting money from the public treasury and placing it into private hands. You must have some feedback control, wherein the amount of public funding is dependent upon some objective criterion that measures the extent to which the public college provides a useful service to the public. For instance, give the college a percentage (that decays exponentially) of the income taxes collected from their alumni. Schools that focus on teaching the knowledge and skills that actually make students employable would then be able to more freely provide tuition discounts to students, expecting that the recurring revenue stream after graduation would make up for the lesser amount collected up front. They all hound their alumni for money all the time, anyway.
    - GFK_of_xmaspast 10y ago
      Judging from history, cheap colleges in the post-war decades worked just fine for the boomers.
chris_wot 10y ago
So to mitigate the possible effects of the colleges all suddenly shutting down they were told to put up a huge amount of collateral, which caused them to all suddenly shut down? That's quite a mitigation strategy the government has going on there.
- johnnymonster 10y ago
  And I'm sure they 78mil they hand on hand is going to "disappear" to pay for "shutting down" their offices.
- keithwhor 10y ago
  Reading between the lines: that was likely the intention all along. Better to deflate the bubble now than let it get any bigger.
- darkarmani 10y ago
  They need to call it at some point. They might as well do it before the semester starts to get some of their money back.
joedissmeyer 10y ago
I am personaly happy to see the hammer come down on these for-profit universities. I too feel for the students as I was one of the Corinthian Colleges students a few years ago at Everest University through one of the Florida campuses. My degree program was the A.S. in Computer Information Sciences -- such a waste. Look up the job placement rates for that program in 2010, just insane. Thankfully I too have been able to take advantage of the Department of Education relief. But I have to go through the process of the “borrower defense to repayment”. It continues to be a tough process but at least it some form of relief for me. I hope former ITT students are able to find a quick resoluton. This type of school shutdown is not easy on anyone. On another note, I wonder if this is the start of the 'higher-ed debt bubble' that has been predicted for quite some time now...
- ams6110 10y ago
  Easy student loans for worthless education is what created the problem of sham for-profit universities to begin with.
  - lazypenguin 10y ago
    Yes, I think this is the crux of all our education woes currently. I'd be curious to see how the system would evolve if the DOE eliminated the federal student aid program entirely.
  - dragonwriter 10y ago
    Yes, and the reason that there were easy student loans for worthless education is because of laxity in the accreditation system on which reliance is placed to assure that education is not worthless, and because of a historical lack of accountability for frauds on the part of certain (particularly for-profit, who have the strongest incentive for fraud) institutions. The recent issues at Corinthian and ITT (including the fraud lawsuits against both and the DOE pressure on accreditors, as well as the ultimately DOE action after the fraud lawsuits and accreditation issues at ITT) are a direct result of efforts to end "easy student loans for worthless education."
jhylau 10y ago
thank god
Eric_WVGG 10y ago
bad news for late night cable ad revenue
aaronchall 10y ago
The dream: take students who are mostly unprepared to succeed at college and educate & prepare them for success in the real world. The reality: most of these students will not realize a return on the investment of their time and acquisition of a ton of debt that they cannot discharge in bankruptcy. Many will fail to attend class, fail to take notes, fail to do homework, fail to learn, and will not complete - but because they have already sunk huge costs into the endeavor, will continue incurring more costs in spite of the writing on the wall. The economics means that these schools are unsustainable. However, some people find success through these schools. How can we continue to serve these people? Perhaps we could avoid throwing the baby out with the bathwater by creating more community colleges, allowing more people to enroll in affordable community colleges, complete milestones at their own pace, while providing more direct subsidies of tuition for the truly needy. I agree that we would benefit from more German-style apprenticeship programs as well. For all of their worker protections, they still have incredibly low youth unemployment.
- pgt 10y ago
  Perhaps apprenticeship programs as are common in Germany, which are more focused on practical skills development than theoretical learning?
  - at-fates-hands 10y ago
    They're actually quite a few apprenticeship programs here in the states. Learning a skilled trade just isn't sexy for a lot of kids and for some reason are looked down upon. Even though you can get a welding apprenticeship and be earning 70-80K right out of the gate. High schools here are starting to encourage kids to take a more non-traditional route to a career and letting kids know there are other avenues other than 4 year colleges - including more vocational training, apprenticeships and other options like code camps.
    - rubidium 10y ago
      I'm not disagreeing with your encouragement towards the skilled trades, but please do be realistic with your information. Median salary is $40K. http://www.payscale.com/research/US/Job=Welder/Hourly_Rate http://www.payscale.com/research/US/Job=Welder/Hourly_Rate
matchagaucho 10y ago
It's one thing for a school to recruit students that aren't prepared for the curriculum, and subsequent debt. But it's quite another problem if the school loses their accreditation and is unable to deliver a quality education.
zomg 10y ago
people are so quick to make this a "for-profit" college issue, when it's not. they shut down because the u.s. department of education banned them from enrolling new students who use federal financial aid. what do you think would happen to "not for-profit" colleges if the u.s. department of education did the same to them? i'd argue it's the "not for-profit" schools who are driving tuition prices up because the government won't stop loaning money to anyone with a pulse. dry up that loan money and watch prices fall from the sky.
jrs235 10y ago
What enabled this greed scheme to work? Government guaranteed loans. The schools and institutions need to have some of their own skin in the game.
- ams6110 10y ago
  The students too. If they are spending their own money they will (at least be more likely to) care more about what they are spending it on.
  - jrs235 10y ago
    Touche. Perhaps full deferment should be changed to paying back $200 / month even while enrolled. I know this is controversial. But at least then the students might feel the pinch and squeeze that the loans will have on them and it might also help them learn personal finance. If a student is unable to make the payments and go into default then they'll have to take a semester off and make some money (this would also prevent some from going much much deeper into debt). All around its a crappy situation. But most high school graduates probably think Caveat Emptor was some Roman ruler...
    - traviscj 10y ago
      > and it might also help them learn personal finance. Also, everyone should learn C/assembly why trying to learn how to make websites, because it might also help them learn pointers.
  - azemetre 10y ago
    How are students able to determine if the education they are paying for is valid or not? How are students that are in at-risk populations able to differentiate between valid accredited solutions and predatory schemes? It's very easy to take advantage of certain people. I'm glad the government is doing its job protecting people from unfair practices. If information asymmetry wasn't so exceedingly common maybe we wouldn't have to deal with consumers making poor mistakes because they "should have known better."
whorleater 10y ago
Thank god. Next on the menu: University of Phoenix please.
donatj 10y ago
I went to a similar for-profit school in Minnesota who also similarly shut down last year. I still feel like they get a bad rap. Was it overpriced? Probably. Did I learn a ton and have small class sizes. Absolutely. The instructors had all previously worked in the industry, and knew their topics very well. On top of all that, after graduation their persistent pestering of "how many places did you apply to this week?" (surely to help their numbers) had a lot to do with me actually getting a job. I didn't want to let the lady that called me weekly down. It took a lot of persistence and interviewing but I finally got my foot firmly in the door about 6 months after graduation. I've been gainfully employed in the industry for ten years, I'm debt free, and I'm happy. I'm thankful for my time there.
- arenaninja 10y ago
  I don't disagree that for-profit colleges get a bad rap, but I think it's deserved in the case of ITT Tech and Corinthian. I think about the government handing out student loans to students who statistically won't be able to repay, and I'm OK with the DOE putting a stop to it. Taxpayers will ultimately be on the hook for these failed loans, and if they know which institutions are largely at fault then good on them for being proactive
  - jeffdavis 10y ago
    "handing out student loans to students who statistically won't be able to repay, and I'm OK with the DOE putting a stop to it" Right, but ot depends on the facts. Were they just asked to put up reasonable collateral, foreseeable from what they delivered compared with their responsibilities by taking federal money? Or were they blindsided with an arbitrary number from the DOE that was intended to force them to shut down before they had a chance to save their business? Probably a little (or a lot) of both. And we should be as wary of the latter as the former.
    - arenaninja 10y ago
      I don't have a good answer for you, because what you said sounds rational, but their tactics were slimy and their immediate shuttering signals, in my opinion, that they had no legitimate shot without a seat in the government trough.
clarkmoody 10y ago
It looks like the main problem in this whole scheme is the government-funded student loan program. ITT was wrangling to get access that that loan money as a key to its operations. Failing to comply with the Dept of Ed's requirements caused them to go out of business, since they would no longer have a place at the public trough. How many state schools and private colleges could survive without government largess? We've seen a massive increase in tuition costs, far beyond inflation in recent years. Such is the result of artificially boosting demand for college on the backs of the taxpayer. As for forgiving ITT student loans, I say no. Students are responsible for their own loans and (bad) decisions. By that reasoning, shouldn't we just forgive all student debt for anyone who didn't get their dream job straight out of undergrad? What about those who don't finish school but still have loans? For everyone but the far left, these ideas are ludicrous. Let's not make the taxpayer suffer twice for the poor decisions of others.
- chadgeidel 10y ago
  I'm not disagreeing or agreeing with loan forgiveness, but to claim that going to college is a bad decision is really a poor choice of words. Everyone you talk to everywhere says that "a college education is the path to a good job" and "college educated workers make - on average - n% more than their non-college-educated counterparts". When these people (kids really at 18) graduate from high school, they are making the best decision they can possibly make. Yes, we know now that ITT was basically a diploma mill, but for a very long time ITT grads got good jobs in the tech industry.
  - clarkmoody 10y ago
    > claim that going to college is a bad decision Taking on the loans is the bad decision, in the case that the student is stuck with no career prospects and a mountain of debt. > they are making the best decision they can possibly make That is not true. Going to college is not the best decision for everyone. Many graduates are over-qualified for the jobs they end up taking. Many jobs that should not require a degree now can afford to filter applicants based on completing college, since so many more people are going. Employers are basically using your years at school as a signal that you are a hard worker. Is that signal worth the time and cost?
sytelus 10y ago
There is a startup opportunity here. It actually shouldn't take a lot of resources for this kind of technical education. Get a community hall, few experienced volunteers and have them teach skills for free to anyone who is interested. Students just promise to pay portion of their income if and when they get job. A startup gets little cut for coordinating whole thing.
- coev 10y ago
  I believe a lot of hacker schools do exactly this
coredog64 10y ago
Fingers crossed that UoP is next...
xenadu02 10y ago
Federal student loans shouldn't be available to any non-accredited institution. If your credit hours won't transfer then it isn't a real College or University.
- dragonwriter 10y ago
  > Federal student loans shouldn't be available to any non-accredited institution. ITT was accredited by an accreditor recognized by the government (though, among their many other problems, that accreditor has, this year, been formally recommended to be removed from that list of recognized accreditors; and even if they weren't removed, they had notified ITT that ITT's accreditation was in jeopardy -- that jeopardy was, in fact, the main direct basis of the recent DOE actions against ITT [the other direct basis is the risk associated with the fraud lawsuits against ITT, which are also the basis for the accreditation risk].) > If your credit hours won't transfer then it isn't a real College or University. Transferrability is a different issue than accreditation, and often differs strongly from receiving school to receiving school.
  - johnward 10y ago
    > Transferability is a different issue than accreditation, and often differs strongly from receiving school to receiving school. Yes but basically no regionally accredited school is taking nationally accredited credits. There is no way to transfer to a "legitimate school" in that case.
    - dragonwriter 10y ago
      > Yes but basically no regionally accredited school is taking nationally accredited credits. Plenty of regionally accredited schools don't take regionally accredited credits (even from the same accreditor), either. Common accreditation doesn't imply transferability.
- SilasX 10y ago
  Correct me if I'm wrong, but most 300+-level classes won't transfer either. My mechanical engineering degree's MEEN 363: Feedback Control of Dynamic Systems won't transfer to other universities because NIH. (Or rather, NTH, I guess.)
deleted 10y ago
[deleted]
emeraldd 10y ago
That's less than two weeks from when the Title IV "death penalty" (Assuming I have my titles right, it's been a while) was assessed. (https://news.ycombinator.com/item?id=12361737 https://news.ycombinator.com/item?id=12361737 )
mikestew 10y ago
I'll preface this with my lack of any love for ITT, but there's a piece of the story that bothers me: "Last month, the feds demanded the company produce an additional $153 million in collateral—nearly double its $78 million in cash on hand—to cover possible losses that the government might incur if the company were to suddenly fail." Here's how that sounds to me: "Well, ITT technically hasn't done anything illegal. But we don't like them. How much cash do they have? Double that amount and tell them we need this much for 'collateral' or we shut them down." Can anyone fill in the blanks that Bloomberg didn't? What basis does the government have to make such demands (as it appears to me) out of the blue? Why make such demands knowing going into it that it will become a self-fulfilling prophecy? (That last question is kind of rhetorical.)
- syntheticcdo 10y ago
  ITT Tech received > 70% of it's revenue from federal student loans. As soon as their business plan became "take as much money from taxpayers as possible because we know our 'graduates' will never be able to pay this back" they opened themselves up to this.
- antisthenes 10y ago
  > What basis does the government have to make such demands (as it appears to me) out of the blue? The utilitarian argument is that the taxpayers should be secured against paying for useless education. I guarantee you schools like that are a net utility loss for the public and the government obviously doesn't like that. Not out of the blue at all.
- dragonwriter 10y ago
  > "Well, ITT technically hasn't done anything illegal. [...]" The DOE action is based on a risk of business failure produced by fraud lawsuits by the SEC (for securities fraud) and CFPB (for consumer fraud) against ITT, both directly and because the costs and potential fundamental issues with ITTs then-existing business model revealed by those lawsuits also led to the risk of losing the accreditation from its accreditor. (Incidentally, that's an accreditor whose notorious laxness in enforcing standards on private universities has led to the recommendation that it be no longer accepted as an accreditor by the Department of Education, a recommendation which may result in action this month removing it as an accreditor.)
rufius 10y ago
Good.
dbg31415 10y ago
What disgusts me most about the for-profit schools -- not to come off as too much of a snob -- is that the money we the taxpayers put into their pockets would be better spent improving community colleges and state schools. I get not everyone needs to go to an Ivy League school, but for vocational basics -- what people are going to these for-profit schools hoping to gain -- community college should be "good enough." I'd look at Bellevue Community College as a great example of a strong vocational tech school. That should be a model others could strive for. When I was younger I learned a great deal in BCC classes -- knowledge that was immediately beneficial to my day job as a software developer. In contrast, the classes at BCC were far more hands-on training than what I got at the school I eventually graduated from. Educationally, community college I feel was better... but certainly for connections and networking the "name-brand" schools pay off.
- ianai 10y ago
  I agree. People going to ITT should view a community college as a more than fair replacement. Further, anytime you introduce profit you introduce cost reduction and "keeping something back" from what the customer paid. i.e. In order to make profit they must be giving you a product that's worth less than you paid to them. That's wasteful.
aerhakr 10y ago
My wife had worked as a temporary at ITT here in Calfornia. It was the most degrading work I have ever seen. She was teaching English courses, and 98% of the kids plagiarized, not even trying to cover it up. When she gave failing grades to the papers, the students fought back and the director at her location told her she can't do that. She quit that week.
brightsize 10y ago
Related: "The Law School Scam. For-profit law schools are a capitalist dream of privatized profits and socialized losses. But for their debt-saddled, no-job-prospect graduates, they can be a nightmare." http://www.theatlantic.com/magazine/archive/2014/09/the-law-school-scam/375069/ http://www.theatlantic.com/magazine/archive/2014/09/the-law-...
Unbeliever69 10y ago
Unfortunately, ITT is just the visible tip of the iceberg. There are MANY more for-profit schools of the same ilk as ITT that will fleece the same archetype of education-seeker. This isn't over by a long-shot. These schools are everywhere and they are probably chomping-at-the-bit to get their mits on displaced ITT students and all others that are susceptible to the type of manipulative and deceptive marketing practices that ITT, and many other for-profit schools, use.
- dragonwriter 10y ago
  > Unfortunately, ITT is just the visible tip of the iceberg. There are MANY more for-profit schools of the same ilk as ITT that will fleece the same archetype of education-seeker. This isn't over by a long-shot. Its not over, but the writing is on the wall, not just with the Corinthian and ITT actions, but more with the focus on ACICS (the accreditor of both Corinthian and ITT, and a vast number of other for-profit schools) which has formally been recommended to be removed as an accreditor recognized by the DOE (a recommendation which, I believe, must be acted on by the end of this month.)
- rhino369 10y ago
  It's not just for profit schools. There are a ton of private non-profit schools that operate the same scam. Instead of paying off shareholders, they operate to keep the organization going for all the people who make their living off it. Even many public schools run programs that are scams or just deliver such a terrible education that they aren't worth operating.
Geekette 10y ago
Too little, too late; ITT and a whole legion of similar schools should have been erased long ago, given glaring evidence of their mismanagment, often misleading/fraudulent advertising, almost no value delivered (e.g. dismal grad job stats), waste of public money, etc. The pressing question is how long before ITT re-opens under a new name; I highly doubt it'll just go away.
tzs 10y ago
For IT degrees (bachelor and master) for those who cannot go to a "normal" college for four years, an option to consider is the online non-profit Western Governor's University [1]. It is especially interesting if you already know much of the material through work or self-study. It was founded by several state governors about 20 years ago, and is accredited by The Northwest Commission on Colleges and Universities. It's pricing is interesting: $2890 per six-month term, regardless of how many classes you take or credits you earn during that term. If you want to take a heavy load to earn the degree faster and save money, you can. Each degree program has a particular list of skills that you have to demonstrate competency in to earn the degree. They offer, of course, all the necessary classes to learn those skills, but you are not required to take those classes--you are just required to demonstrate the skills. If you have already acquired some of these skills elsewhere, you can take the test or do the project that demonstrates it and that will count toward the degree. For most of the IT degrees you also earn several widely recognized third-party IT certifications, at no extra cost. For example the IT bachelor's program in network administration includes these certifications: MSCA Windows Server, CompTIA Linux+, CompTIA A+, CompTIA Network+, CompTIA Security+, and CompTIA Project+. (The offer more than IT, BTW. The also have bachelor and master programs in teaching, business, and health). [1] https://en.wikipedia.org/wiki/Western_Governors_University https://en.wikipedia.org/wiki/Western_Governors_University
KevinEldon 10y ago
Stop federally funding education. In the US we have 50 different opportunities to learn about how to create the best education system: all of these systems could learn from each other. When we allow federal funding of education we get much less diversity and innovation; we promote a mono-culture.
spudlyo 10y ago
Have you ever worked with anything ... High tech? https://www.youtube.com/watch?v=l31I9RvluEA https://www.youtube.com/watch?v=l31I9RvluEA I asked that once during an interview, and was met with blank stares. Haven't asked it since, but I feel like it could have been hilarious.
ryanlm 10y ago
Not being able to transfer credits seems to be a good example of Vendor Lock-In.
colindean 10y ago
I was an IT instructor at one for two quarters in the late 2000s. AMAA.
tomohawk 10y ago
They should have spent the $18 million. https://www.washingtonpost.com/politics/inside-bill-clintons-nearly-18-million-job-as-honorary-chancellor-of-a-for-profit-college/2016/09/05/8496db42-655b-11e6-be4e-23fc4d4d12b4_story.html https://www.washingtonpost.com/politics/inside-bill-clintons... EDIT: Not sure what the downvotes are for. ITT gets shutdown, but Laureate does the same thing, but even more so and gets a pass. The only difference appears to be these kinds of payoffs to politicos.
ramblenode 10y ago
> Students now enrolled at the company's technical schools will be able to cancel any federal student debt they incurred for their education if they decide against transferring their credits elsewhere... Taxpayers will record a loss on those debt cancellations. This seems very unfair to taxpayers, who are essentially forced creditors. If the college reneges on its contract with students, then the students should seek to reclaim their losses through a class action lawsuit against ITT. The government shouldn't be covering losses on what were, arguably, bad investments.
- ben_jones 10y ago
  If you wanted to you could also point out that we're forced creditors on the trillion dollar F-35 program... doesn't get us very far.
walrus01 10y ago
The entire concept of a corporate death penalty (in this case enforced by ITT no longer being eligible for federal student loans) is something that is not implemented nearly as frequently as it should be.
__pid_t 10y ago
How's Devry? I worked with a person that got a degree from there. It's for-profit too. I can't imagine it's any better than ITT with it's vendor lock in.
arikrak 10y ago
Instead of the government trying to protect their loans and end up doing the opposite, maybe the government shouldn't be in the business of lending money to individuals? Government + lending + a supposed social benefit = disaster. First it was with helping people own homes, and now it's with helping people go to college. It sounds nice, but by lending money the government can just hide the true cost of what their doing. (Meanwhile government loans for housing have gotten worse: http://www.economist.com/news/leaders/21705317-americas-housing-system-was-centre-last-crisis-it-has-still-not-been-properly http://www.economist.com/news/leaders/21705317-americas-hous...)
paulddraper 10y ago
This is an instructive lesson. "Free education" they say. "It will solve problems" they say. "Education will be better" they say. No, it won't. Free education -- or subsidized loans -- puts a disconnect between education and its cost. If the person paying is not the person deciding, a poor decision will be made. It's just like how HSAs prompt people to think about what they're spending their money on. ITT would not exist but for government spending. Sure, some will beat the dead horse of more regulation. But the real answer is STOP SUBSIDIZING. Stop subsidizing education, stop subsidizing mortgages, stop subsidizing GM, stop blowing decisions sideways by removing the universal language of cost from the discussion.
- themartorana 10y ago
  Stop subsidizing education? Do you propose this for just higher education? Or is it all education you'd like taxpayers to stop paying for? Unsubsidized education either a) means more private loans somehow now exempt from bankruptcy proceedings or b) education is now only for those that can afford it. I am the complete and total opposite of your position. How it is that we provide 12-14 years of education for free, but then burden the economy with an insane amount of unsecured debt for the last four is insanity. It places our economy at risk, it severely stunts upward mobility, it burdens our youngest minds with mortgage-sized debts, and it sinks people into a lifetime of debt. If college is, in general, required to actively participate in our society, it should be paid for the same as (Pre)K-12. Edit: I'd like to say that I agree that subsidizing activity as a direct pass through of money from government to for-profit enterprise is a bad idea. Don't subsidize for-profit colleges. But they were never needed to begin with.
  - paulddraper 10y ago
    The average college grad makes something like a million dollars more over his lifetime than a non-college grad. If that last 4 years cost the most, I can see why. Anyway, option B. Having a restaurant is only for those who can afford it. Owning a house is only for those who can afford it. Starting a start-up is only for those who can afford it. Fortunately, we have a system that allows people to pay each of those costs over a period of time (in some cases, even over a lifetime, as you pointed out). Maybe your restaurant goes under, or your house goes underwater, or your skills aren't valuable, or (however unlikely) your start-up fails. I don't know what to tell you. Reality's a bitch. Hopefully your research and efforts are enough for you to make the right decisions. It's quite possible for a $20k education to produce a $1 million payoff. In that case, anyone can afford it. It's also possible for a $150k education to produce a $90k payoff. In that case, few can afford it I'm not going to tell you what to do, pay for it, or take your earnings. You alone can make those decisions.
peter303 10y ago
Will coding academies go down the same route as for profit colleges? Right now they are the darling of politicians who think they could solve the country's unemployment and tech shortage problems. But once your put Wall Street in charge and scale them up handle large numbers of students, I wonder if they will become the next ITT.
WheelsAtLarge 10y ago
Yes ITT was a money grabbing parasite and I'm glad they are gone. But the glamorous 4 years schools aren't as great as they set themselves to be. Many students come out of the great schools owing thousands and having a very hard time getting a job. This is not new. The fact is that universities weren't created for job training. Their job was to expand your knowledge. That's why you can get a degree in Greek mythology or Latin or whatever. It was really a way for rich people to spend their time in something constructive. Somewhere the idea of a university and job training came together but universities aren't very good at job training so that's the big problem. We as a society don't have a great way to train the massed for society's jobs. Community college focus on getting you to a four year college but they need to do a better job at job training. For profit schools have tried but they focus on profits and lose sight of the students. We blame the institutions but students also need to take responsibility. If you can't take the time learn don't expect to get a job where someone needs to have a productive employee to keep the business going. Also the K-12 schools need to do something to fix the problem. How is it that a student goes through 13 years of school and not learn to be a productive employee? That the real shame.Yet we put the blame elsewhere. Politicians love to argue the effects of same sex bathrooms but they aren't willing to take on why schools are failing society. We need to fix that.

487 points by jlas 10y ago

"It will now likely rest on other parties to understand these reprehensible actions and to take action to attempt to prevent this from happening again." Indeed.

peterhadlaw 10y ago

As an alum of IIT (Chicago)... This is extra, great news.

tptacek 10y ago
Why'd you go? What'd you study? What was the experience like? (I have a single semester at UIC and no other college).
- larrywright 10y ago
  I'm pretty sure he's referring to Illinois Institute of Technology (http://web.iit.edu http://web.iit.edu), and the fact that the name confusion doesn't act in his favor. I didn't attend, but I've been on the campus and it seems like a pretty great school.
  - tptacek 10y ago
    D'oh. I'm pretty sure you're right. Thanks!
  - tamana 10y ago
    That confusing with Indian Institute of Tech should help though. That's a top school in India
    - peterhadlaw 10y ago
      Hence "(Chicago)" ;)
  - peterhadlaw 10y ago
    You are correct, I'm referring to Illinois Institute of Technology! :)
    - ianai 10y ago
      I can empathize a bit. I went to the New Mexico Institute of Mining and Technology. It's an excellent school - on par with MIT in its eyes. The name recognition's not there where I live right now, though. It's not helped me find work.
- jotato 10y ago
  I graduated from ITT 11 years ago. Care if I chime in? * Why did I go? I was just out of high-school and I wanted to be a software engineer. I looked at the local university (Robert Morris in Pittsburgh, PA), but I didn't like their program. I was one of those kids who started tinkering with programming at 12 by making Pokemon fan sites :) 4 Years at a university studying a generic comp-sci degree didn't appeal to me. ITT offered a degree in Software Applications and Programming. It was what I was looking for. * What did I study? As mentioned, Software Applications and Programming. Aside from the core classes (English, Calc, Trig, etc...) there were 2 OS classes, 2 VB, 2 C++, 2 Java, 2 webdev and 1 data structures class. at 18, this is what I was looking for. A few classes to teach me the basics in those areas and let me chase down the rest. * What was it like? I don't have a single word to describe it, and when people ask me in person I find that I can take a good 20 minutes describing it. I'll do my best to sum it up. disclaimer: they kept 3 students on hand as lab assistants and I was one for most of my two years there. Basically, we helped out the professors as needed and offered to help tutor. It paid something like $8/hr. My opinion may be skewed because of that. - It was 100% for profit, and you could tell. Professors wouldn't really be allowed to fail students. It always bothered me that someone who only came to class on the first and last days was able to "barely pass" - "Testing out" was frowned upon. You could do it, but you needed permission from the Dean, and meet with the professor and "career services" before you took the test. I was told you had to pass with a 100% to test out - I can't really vouch for that since I never tried. - "Career Services" was a bit of a joke. It was 3 ladies who would critic your resume and let you know if they had heard of any job opening. Don't get me wrong, they were really nice people who wanted to help. I just didn't get much value from them. Sometimes local companies would come to ITT to post job openings. CS would at least email those out to you if you wanted. - The classes were basic - "topic for dummies" basic. I'm no genius, but I didn't have to take notes. I don't know if it was that I had already been learning for 7 years before ITT or what, but I didn't really learn many new things there. It was kind of two years of review. I may be wrong on this one; I just don't have any memories of struggling to learn something. - The professors and staff were nice. They did want to see you succeed. - Credit transfers. They were upfront most colleges wouldn't transfer credits, but rumor had it the local university would take a few. Mainly the cores (maths, english, etc..) * Final thoughts? - Would I go again? No - Would I tell other people to go? No - Was it worth it? Yes. I did get a degree. It isn't prestigious and I don't care. I was able to have a job lined up (in my field) before graduation. Fast forward to today and I have moved to the other side of the country. I have a great family, a good consulting job, and the confidence I need to build any software you want. How much of that was ITT, and how much was my own sweat and blood? I don't know. What I do know is I would not have been hired at the same place right out of college. Which means I wouldn't have made the connections I did which led to me moving across the country. edit: I see a few topics regarding loan forgiveness because of fraud. I experienced no such thing. Sure, the recruiters made a few statements that I consider un-true. But i wouldn't call it fraud. They did provide an education. (It may not have been the best) and they did try to place you in a job (they can't place everybody!) Ultimately, it was on me for borrowing money; not the school
jcranmer 10y ago
IIT (Illinois Institute of Technology) or ITT (Technical Institutes)?
- abrowne 10y ago
  I think they are implying that now people won't think of ITT when they say they're an alum of IIT.
- deleted 10y ago
  [deleted]
- idsout 10y ago
  Pretty sure this is why OP is glad ITT exists no longer. Someday people won't confuse their respectable college with ITT.

tickthokk 10y ago

As a 2005 graduate of ITT, I'm glad. This was a long time coming. Now if only I could get my loans refunded :p

jacquesm 10y ago
From TFA: "Other former students are pushing to have their debts canceled by alleging that the company defrauded them into taking out the debt by advertising false job-placement rates." So it looks like you might have a chance.
- ianai 10y ago
  That seems like something you couldn't sue over and win. At this point the beef exists between student and financer.
Unbeliever69 10y ago
Check out the DOE website. You most likely will be able to get some student loan forgiveness.
- tickthokk 10y ago
  Thanks, I took a look, and that's great information for any current student, or students with outstanding loans. However, I was mostly joking; I've actually already paid them off completely, years ago, which wouldn't have been possible without my lovely wife. So the word "refund" was used purposefully, and getting one is likely improbable, haha. For years it was always a struggle of bashing ITT with my colleagues/the internet, but talking them up with potential employers. The only thing $40k of debt got me was the perceived prestige an employer likely already had of ITT. Now that they're defunct there's definitely no up-selling them.
  - jotato 10y ago
    I graduated in 2005 from ITT in Pittsburgh and the total cost was a hair under 28K. I got a few grants, but had less than 20K in debt when I graduated. Was the pricing really that different where you went? Also, that was over 10 years ago. I haven't had any employer really care that I went to ITT. Honestly in the last 5 or 6 years no employer even asked where I went. Where I am now most care about real world experience; not where you graduated. I don't know where I am going with this...

kayla210 10y ago

I really feel for all the students who are so close to graduating and not knowing if they'll have anything to show for it.. And their credits will most likely not transfer to another school because of the different accreditations.

tptacek 10y ago
That their credits had virtually no chance of transferring to any other institution --- a point ITT was forced to make on its own website --- is a pretty good reason not to allow it to be the beneficiary of billions of dollars of public financing.
- dionidium 10y ago
  It's on this page, for the curious: http://programinfo.itt-tech.edu/consumerinfo/ http://programinfo.itt-tech.edu/consumerinfo/
  - criddell 10y ago
    Why didn't ITT seek accreditation so that credits were transferable? It seems like it would instantly increase the value of what they are selling.
    - dragonwriter 10y ago
      > Why didn't ITT seek accreditation so that credits were transferable? Accreditation and transferability are different issues; ITT was accredited (were it not, it could not have participated in federal aid programs.) > It seems like it would instantly increase the value of what they are selling. Like Corinthian, what they were selling was largely fantasies, specifically targeted to demographics who were unlikely to recognize that they were fantasies. Were ITT intending to sell a legitimate education, sure, transferability would increase the value, but they were never going to sell legitimate education at the mass-market volume and premium prices they were trying to sell at.
    - logfromblammo 10y ago

at-fates-hands 10y ago

I live in Minneapolis and the City Pages did quite an exposé on them back in 2015. It was pretty eye opening and gives a really good glimpse into their tactics: http://www.citypages.com/news/itt-tech-sells-an-american-dream-of-broken-lives-and-financial-ruin-7463804 http://www.citypages.com/news/itt-tech-sells-an-american-dre...

deleted 10y ago
[deleted]

gigatexal 10y ago

Yes! What a shameful institution.

JulianMorrison 10y ago

Every student's loans to these slimy operators should be simply struck off with no penalty.

qaq 10y ago
Why should avg. taxpayer take on this burden?
- miiiiiike 10y ago
  Because the federal government allowed ITT to participate in the student aid programs.
  - johnward 10y ago
    The government approved loans to the school. They carry some of the burden. They should be taking every asset from ITT first but I know that they will have none somehow and the execs will walk away with multiple millions. Disclaimer: attended ITT and paid off the fed loan. Still paying on a parent plus that I doubt would qualify for forgiveness.
- warmblood 10y ago
  Because the burden on your (so-called) average taxpayer of having a stagnant, debt-crippled workforce is greater and worse to bear in the long term.
  - clarkmoody 10y ago
    But let's not make those taxpayers foot the exploding costs of tuition caused by access to so much easy money.
    - warmblood 10y ago
      This is a mostly incoherent comment; enough so that I can only read into it what your profile statement gives away about your inclinations.

loco5niner 10y ago

Good.

koolba 10y ago

Question for lawyers in the audience: If ITT is shut down because the "education" it was providing was complete shit and not recognized anywhere else, does that mean that the usual rules about education related personal debt surviving bankruptcy wouldn't apply?

tamana 10y ago
There are various ways to get loan forgiveness for these loans, for reasons as you suggest, before the bankruptcy question. But pity the fool who paid off their loan and is now bankrupt.
- koolba 10y ago
  > But pity the fool who paid off their loan and is now bankrupt. Sadly that's becoming more and more common a trend in this country. It's the same as all the poor chaps who kept trying to pay their underwater mortgages while they're neighbors squatted for free. Honest Joe seems to never catch a break :(

JoeAltmaier 10y ago

Next, go after the public colleges? Other than brand, do they do a better job? Spend more than 30% of income on actual educational expenses (like IIT does)? I doubt it. {edit} Seems like US Universities are about 1:1 faculty vs staff. Up from 2:1 40 years ago.

qaq 10y ago
Given the continuous grows of administrative personal and cutting of faculty positions the quality of the job they do is deteriorating quickly.
GFK_of_xmaspast 10y ago
How about 'fully funding public colleges' instead so that kids don't have to go into crippling debt to go there.
- logfromblammo 10y ago
  Judging by history, this would be seen as a license to artificially inflate costs, such that the university system would become a machine for extracting money from the public treasury and placing it into private hands. You must have some feedback control, wherein the amount of public funding is dependent upon some objective criterion that measures the extent to which the public college provides a useful service to the public. For instance, give the college a percentage (that decays exponentially) of the income taxes collected from their alumni. Schools that focus on teaching the knowledge and skills that actually make students employable would then be able to more freely provide tuition discounts to students, expecting that the recurring revenue stream after graduation would make up for the lesser amount collected up front. They all hound their alumni for money all the time, anyway.
  - GFK_of_xmaspast 10y ago
    Judging from history, cheap colleges in the post-war decades worked just fine for the boomers.

chris_wot 10y ago

So to mitigate the possible effects of the colleges all suddenly shutting down they were told to put up a huge amount of collateral, which caused them to all suddenly shut down? That's quite a mitigation strategy the government has going on there.

johnnymonster 10y ago
And I'm sure they 78mil they hand on hand is going to "disappear" to pay for "shutting down" their offices.
keithwhor 10y ago
Reading between the lines: that was likely the intention all along. Better to deflate the bubble now than let it get any bigger.
darkarmani 10y ago
They need to call it at some point. They might as well do it before the semester starts to get some of their money back.

joedissmeyer 10y ago

I am personaly happy to see the hammer come down on these for-profit universities. I too feel for the students as I was one of the Corinthian Colleges students a few years ago at Everest University through one of the Florida campuses. My degree program was the A.S. in Computer Information Sciences -- such a waste. Look up the job placement rates for that program in 2010, just insane. Thankfully I too have been able to take advantage of the Department of Education relief. But I have to go through the process of the “borrower defense to repayment”. It continues to be a tough process but at least it some form of relief for me. I hope former ITT students are able to find a quick resoluton. This type of school shutdown is not easy on anyone. On another note, I wonder if this is the start of the 'higher-ed debt bubble' that has been predicted for quite some time now...

ams6110 10y ago
Easy student loans for worthless education is what created the problem of sham for-profit universities to begin with.
- lazypenguin 10y ago
  Yes, I think this is the crux of all our education woes currently. I'd be curious to see how the system would evolve if the DOE eliminated the federal student aid program entirely.
- dragonwriter 10y ago
  Yes, and the reason that there were easy student loans for worthless education is because of laxity in the accreditation system on which reliance is placed to assure that education is not worthless, and because of a historical lack of accountability for frauds on the part of certain (particularly for-profit, who have the strongest incentive for fraud) institutions. The recent issues at Corinthian and ITT (including the fraud lawsuits against both and the DOE pressure on accreditors, as well as the ultimately DOE action after the fraud lawsuits and accreditation issues at ITT) are a direct result of efforts to end "easy student loans for worthless education."

jhylau 10y ago

thank god

Eric_WVGG 10y ago

bad news for late night cable ad revenue

aaronchall 10y ago

The dream: take students who are mostly unprepared to succeed at college and educate & prepare them for success in the real world. The reality: most of these students will not realize a return on the investment of their time and acquisition of a ton of debt that they cannot discharge in bankruptcy. Many will fail to attend class, fail to take notes, fail to do homework, fail to learn, and will not complete - but because they have already sunk huge costs into the endeavor, will continue incurring more costs in spite of the writing on the wall. The economics means that these schools are unsustainable. However, some people find success through these schools. How can we continue to serve these people? Perhaps we could avoid throwing the baby out with the bathwater by creating more community colleges, allowing more people to enroll in affordable community colleges, complete milestones at their own pace, while providing more direct subsidies of tuition for the truly needy. I agree that we would benefit from more German-style apprenticeship programs as well. For all of their worker protections, they still have incredibly low youth unemployment.

pgt 10y ago
Perhaps apprenticeship programs as are common in Germany, which are more focused on practical skills development than theoretical learning?
- at-fates-hands 10y ago
  They're actually quite a few apprenticeship programs here in the states. Learning a skilled trade just isn't sexy for a lot of kids and for some reason are looked down upon. Even though you can get a welding apprenticeship and be earning 70-80K right out of the gate. High schools here are starting to encourage kids to take a more non-traditional route to a career and letting kids know there are other avenues other than 4 year colleges - including more vocational training, apprenticeships and other options like code camps.
  - rubidium 10y ago
    I'm not disagreeing with your encouragement towards the skilled trades, but please do be realistic with your information. Median salary is $40K. http://www.payscale.com/research/US/Job=Welder/Hourly_Rate http://www.payscale.com/research/US/Job=Welder/Hourly_Rate

matchagaucho 10y ago

It's one thing for a school to recruit students that aren't prepared for the curriculum, and subsequent debt. But it's quite another problem if the school loses their accreditation and is unable to deliver a quality education.

zomg 10y ago

people are so quick to make this a "for-profit" college issue, when it's not. they shut down because the u.s. department of education banned them from enrolling new students who use federal financial aid. what do you think would happen to "not for-profit" colleges if the u.s. department of education did the same to them? i'd argue it's the "not for-profit" schools who are driving tuition prices up because the government won't stop loaning money to anyone with a pulse. dry up that loan money and watch prices fall from the sky.

jrs235 10y ago

What enabled this greed scheme to work? Government guaranteed loans. The schools and institutions need to have some of their own skin in the game.

ams6110 10y ago
The students too. If they are spending their own money they will (at least be more likely to) care more about what they are spending it on.
- jrs235 10y ago
  Touche. Perhaps full deferment should be changed to paying back $200 / month even while enrolled. I know this is controversial. But at least then the students might feel the pinch and squeeze that the loans will have on them and it might also help them learn personal finance. If a student is unable to make the payments and go into default then they'll have to take a semester off and make some money (this would also prevent some from going much much deeper into debt). All around its a crappy situation. But most high school graduates probably think Caveat Emptor was some Roman ruler...
  - traviscj 10y ago
    > and it might also help them learn personal finance. Also, everyone should learn C/assembly why trying to learn how to make websites, because it might also help them learn pointers.
- azemetre 10y ago
  How are students able to determine if the education they are paying for is valid or not? How are students that are in at-risk populations able to differentiate between valid accredited solutions and predatory schemes? It's very easy to take advantage of certain people. I'm glad the government is doing its job protecting people from unfair practices. If information asymmetry wasn't so exceedingly common maybe we wouldn't have to deal with consumers making poor mistakes because they "should have known better."

whorleater 10y ago

Thank god. Next on the menu: University of Phoenix please.

donatj 10y ago

I went to a similar for-profit school in Minnesota who also similarly shut down last year. I still feel like they get a bad rap. Was it overpriced? Probably. Did I learn a ton and have small class sizes. Absolutely. The instructors had all previously worked in the industry, and knew their topics very well. On top of all that, after graduation their persistent pestering of "how many places did you apply to this week?" (surely to help their numbers) had a lot to do with me actually getting a job. I didn't want to let the lady that called me weekly down. It took a lot of persistence and interviewing but I finally got my foot firmly in the door about 6 months after graduation. I've been gainfully employed in the industry for ten years, I'm debt free, and I'm happy. I'm thankful for my time there.

arenaninja 10y ago
I don't disagree that for-profit colleges get a bad rap, but I think it's deserved in the case of ITT Tech and Corinthian. I think about the government handing out student loans to students who statistically won't be able to repay, and I'm OK with the DOE putting a stop to it. Taxpayers will ultimately be on the hook for these failed loans, and if they know which institutions are largely at fault then good on them for being proactive
- jeffdavis 10y ago
  "handing out student loans to students who statistically won't be able to repay, and I'm OK with the DOE putting a stop to it" Right, but ot depends on the facts. Were they just asked to put up reasonable collateral, foreseeable from what they delivered compared with their responsibilities by taking federal money? Or were they blindsided with an arbitrary number from the DOE that was intended to force them to shut down before they had a chance to save their business? Probably a little (or a lot) of both. And we should be as wary of the latter as the former.
  - arenaninja 10y ago
    I don't have a good answer for you, because what you said sounds rational, but their tactics were slimy and their immediate shuttering signals, in my opinion, that they had no legitimate shot without a seat in the government trough.

clarkmoody 10y ago

It looks like the main problem in this whole scheme is the government-funded student loan program. ITT was wrangling to get access that that loan money as a key to its operations. Failing to comply with the Dept of Ed's requirements caused them to go out of business, since they would no longer have a place at the public trough. How many state schools and private colleges could survive without government largess? We've seen a massive increase in tuition costs, far beyond inflation in recent years. Such is the result of artificially boosting demand for college on the backs of the taxpayer. As for forgiving ITT student loans, I say no. Students are responsible for their own loans and (bad) decisions. By that reasoning, shouldn't we just forgive all student debt for anyone who didn't get their dream job straight out of undergrad? What about those who don't finish school but still have loans? For everyone but the far left, these ideas are ludicrous. Let's not make the taxpayer suffer twice for the poor decisions of others.

chadgeidel 10y ago
I'm not disagreeing or agreeing with loan forgiveness, but to claim that going to college is a bad decision is really a poor choice of words. Everyone you talk to everywhere says that "a college education is the path to a good job" and "college educated workers make - on average - n% more than their non-college-educated counterparts". When these people (kids really at 18) graduate from high school, they are making the best decision they can possibly make. Yes, we know now that ITT was basically a diploma mill, but for a very long time ITT grads got good jobs in the tech industry.
- clarkmoody 10y ago
  > claim that going to college is a bad decision Taking on the loans is the bad decision, in the case that the student is stuck with no career prospects and a mountain of debt. > they are making the best decision they can possibly make That is not true. Going to college is not the best decision for everyone. Many graduates are over-qualified for the jobs they end up taking. Many jobs that should not require a degree now can afford to filter applicants based on completing college, since so many more people are going. Employers are basically using your years at school as a signal that you are a hard worker. Is that signal worth the time and cost?

sytelus 10y ago

There is a startup opportunity here. It actually shouldn't take a lot of resources for this kind of technical education. Get a community hall, few experienced volunteers and have them teach skills for free to anyone who is interested. Students just promise to pay portion of their income if and when they get job. A startup gets little cut for coordinating whole thing.

coev 10y ago
I believe a lot of hacker schools do exactly this

coredog64 10y ago

Fingers crossed that UoP is next...

xenadu02 10y ago

Federal student loans shouldn't be available to any non-accredited institution. If your credit hours won't transfer then it isn't a real College or University.

dragonwriter 10y ago
> Federal student loans shouldn't be available to any non-accredited institution. ITT was accredited by an accreditor recognized by the government (though, among their many other problems, that accreditor has, this year, been formally recommended to be removed from that list of recognized accreditors; and even if they weren't removed, they had notified ITT that ITT's accreditation was in jeopardy -- that jeopardy was, in fact, the main direct basis of the recent DOE actions against ITT [the other direct basis is the risk associated with the fraud lawsuits against ITT, which are also the basis for the accreditation risk].) > If your credit hours won't transfer then it isn't a real College or University. Transferrability is a different issue than accreditation, and often differs strongly from receiving school to receiving school.
- johnward 10y ago
  > Transferability is a different issue than accreditation, and often differs strongly from receiving school to receiving school. Yes but basically no regionally accredited school is taking nationally accredited credits. There is no way to transfer to a "legitimate school" in that case.
  - dragonwriter 10y ago
    > Yes but basically no regionally accredited school is taking nationally accredited credits. Plenty of regionally accredited schools don't take regionally accredited credits (even from the same accreditor), either. Common accreditation doesn't imply transferability.
SilasX 10y ago
Correct me if I'm wrong, but most 300+-level classes won't transfer either. My mechanical engineering degree's MEEN 363: Feedback Control of Dynamic Systems won't transfer to other universities because NIH. (Or rather, NTH, I guess.)

deleted 10y ago

[deleted]

emeraldd 10y ago

That's less than two weeks from when the Title IV "death penalty" (Assuming I have my titles right, it's been a while) was assessed. (https://news.ycombinator.com/item?id=12361737 https://news.ycombinator.com/item?id=12361737 )

mikestew 10y ago

I'll preface this with my lack of any love for ITT, but there's a piece of the story that bothers me: "Last month, the feds demanded the company produce an additional $153 million in collateral—nearly double its $78 million in cash on hand—to cover possible losses that the government might incur if the company were to suddenly fail." Here's how that sounds to me: "Well, ITT technically hasn't done anything illegal. But we don't like them. How much cash do they have? Double that amount and tell them we need this much for 'collateral' or we shut them down." Can anyone fill in the blanks that Bloomberg didn't? What basis does the government have to make such demands (as it appears to me) out of the blue? Why make such demands knowing going into it that it will become a self-fulfilling prophecy? (That last question is kind of rhetorical.)

syntheticcdo 10y ago
ITT Tech received > 70% of it's revenue from federal student loans. As soon as their business plan became "take as much money from taxpayers as possible because we know our 'graduates' will never be able to pay this back" they opened themselves up to this.
antisthenes 10y ago
> What basis does the government have to make such demands (as it appears to me) out of the blue? The utilitarian argument is that the taxpayers should be secured against paying for useless education. I guarantee you schools like that are a net utility loss for the public and the government obviously doesn't like that. Not out of the blue at all.
dragonwriter 10y ago
> "Well, ITT technically hasn't done anything illegal. [...]" The DOE action is based on a risk of business failure produced by fraud lawsuits by the SEC (for securities fraud) and CFPB (for consumer fraud) against ITT, both directly and because the costs and potential fundamental issues with ITTs then-existing business model revealed by those lawsuits also led to the risk of losing the accreditation from its accreditor. (Incidentally, that's an accreditor whose notorious laxness in enforcing standards on private universities has led to the recommendation that it be no longer accepted as an accreditor by the Department of Education, a recommendation which may result in action this month removing it as an accreditor.)

rufius 10y ago

Good.

dbg31415 10y ago

What disgusts me most about the for-profit schools -- not to come off as too much of a snob -- is that the money we the taxpayers put into their pockets would be better spent improving community colleges and state schools. I get not everyone needs to go to an Ivy League school, but for vocational basics -- what people are going to these for-profit schools hoping to gain -- community college should be "good enough." I'd look at Bellevue Community College as a great example of a strong vocational tech school. That should be a model others could strive for. When I was younger I learned a great deal in BCC classes -- knowledge that was immediately beneficial to my day job as a software developer. In contrast, the classes at BCC were far more hands-on training than what I got at the school I eventually graduated from. Educationally, community college I feel was better... but certainly for connections and networking the "name-brand" schools pay off.

ianai 10y ago
I agree. People going to ITT should view a community college as a more than fair replacement. Further, anytime you introduce profit you introduce cost reduction and "keeping something back" from what the customer paid. i.e. In order to make profit they must be giving you a product that's worth less than you paid to them. That's wasteful.

aerhakr 10y ago

My wife had worked as a temporary at ITT here in Calfornia. It was the most degrading work I have ever seen. She was teaching English courses, and 98% of the kids plagiarized, not even trying to cover it up. When she gave failing grades to the papers, the students fought back and the director at her location told her she can't do that. She quit that week.

brightsize 10y ago

Related: "The Law School Scam. For-profit law schools are a capitalist dream of privatized profits and socialized losses. But for their debt-saddled, no-job-prospect graduates, they can be a nightmare." http://www.theatlantic.com/magazine/archive/2014/09/the-law-school-scam/375069/ http://www.theatlantic.com/magazine/archive/2014/09/the-law-...

Unbeliever69 10y ago

Unfortunately, ITT is just the visible tip of the iceberg. There are MANY more for-profit schools of the same ilk as ITT that will fleece the same archetype of education-seeker. This isn't over by a long-shot. These schools are everywhere and they are probably chomping-at-the-bit to get their mits on displaced ITT students and all others that are susceptible to the type of manipulative and deceptive marketing practices that ITT, and many other for-profit schools, use.

dragonwriter 10y ago
> Unfortunately, ITT is just the visible tip of the iceberg. There are MANY more for-profit schools of the same ilk as ITT that will fleece the same archetype of education-seeker. This isn't over by a long-shot. Its not over, but the writing is on the wall, not just with the Corinthian and ITT actions, but more with the focus on ACICS (the accreditor of both Corinthian and ITT, and a vast number of other for-profit schools) which has formally been recommended to be removed as an accreditor recognized by the DOE (a recommendation which, I believe, must be acted on by the end of this month.)
rhino369 10y ago
It's not just for profit schools. There are a ton of private non-profit schools that operate the same scam. Instead of paying off shareholders, they operate to keep the organization going for all the people who make their living off it. Even many public schools run programs that are scams or just deliver such a terrible education that they aren't worth operating.

Geekette 10y ago

Too little, too late; ITT and a whole legion of similar schools should have been erased long ago, given glaring evidence of their mismanagment, often misleading/fraudulent advertising, almost no value delivered (e.g. dismal grad job stats), waste of public money, etc. The pressing question is how long before ITT re-opens under a new name; I highly doubt it'll just go away.

tzs 10y ago

For IT degrees (bachelor and master) for those who cannot go to a "normal" college for four years, an option to consider is the online non-profit Western Governor's University [1]. It is especially interesting if you already know much of the material through work or self-study. It was founded by several state governors about 20 years ago, and is accredited by The Northwest Commission on Colleges and Universities. It's pricing is interesting: $2890 per six-month term, regardless of how many classes you take or credits you earn during that term. If you want to take a heavy load to earn the degree faster and save money, you can. Each degree program has a particular list of skills that you have to demonstrate competency in to earn the degree. They offer, of course, all the necessary classes to learn those skills, but you are not required to take those classes--you are just required to demonstrate the skills. If you have already acquired some of these skills elsewhere, you can take the test or do the project that demonstrates it and that will count toward the degree. For most of the IT degrees you also earn several widely recognized third-party IT certifications, at no extra cost. For example the IT bachelor's program in network administration includes these certifications: MSCA Windows Server, CompTIA Linux+, CompTIA A+, CompTIA Network+, CompTIA Security+, and CompTIA Project+. (The offer more than IT, BTW. The also have bachelor and master programs in teaching, business, and health). [1] https://en.wikipedia.org/wiki/Western_Governors_University https://en.wikipedia.org/wiki/Western_Governors_University

KevinEldon 10y ago

Stop federally funding education. In the US we have 50 different opportunities to learn about how to create the best education system: all of these systems could learn from each other. When we allow federal funding of education we get much less diversity and innovation; we promote a mono-culture.

spudlyo 10y ago

Have you ever worked with anything ... High tech? https://www.youtube.com/watch?v=l31I9RvluEA https://www.youtube.com/watch?v=l31I9RvluEA I asked that once during an interview, and was met with blank stares. Haven't asked it since, but I feel like it could have been hilarious.

ryanlm 10y ago

Not being able to transfer credits seems to be a good example of Vendor Lock-In.

colindean 10y ago

I was an IT instructor at one for two quarters in the late 2000s. AMAA.

tomohawk 10y ago

They should have spent the $18 million. https://www.washingtonpost.com/politics/inside-bill-clintons-nearly-18-million-job-as-honorary-chancellor-of-a-for-profit-college/2016/09/05/8496db42-655b-11e6-be4e-23fc4d4d12b4_story.html https://www.washingtonpost.com/politics/inside-bill-clintons... EDIT: Not sure what the downvotes are for. ITT gets shutdown, but Laureate does the same thing, but even more so and gets a pass. The only difference appears to be these kinds of payoffs to politicos.

ramblenode 10y ago

> Students now enrolled at the company's technical schools will be able to cancel any federal student debt they incurred for their education if they decide against transferring their credits elsewhere... Taxpayers will record a loss on those debt cancellations. This seems very unfair to taxpayers, who are essentially forced creditors. If the college reneges on its contract with students, then the students should seek to reclaim their losses through a class action lawsuit against ITT. The government shouldn't be covering losses on what were, arguably, bad investments.

ben_jones 10y ago
If you wanted to you could also point out that we're forced creditors on the trillion dollar F-35 program... doesn't get us very far.

walrus01 10y ago

The entire concept of a corporate death penalty (in this case enforced by ITT no longer being eligible for federal student loans) is something that is not implemented nearly as frequently as it should be.

__pid_t 10y ago

How's Devry? I worked with a person that got a degree from there. It's for-profit too. I can't imagine it's any better than ITT with it's vendor lock in.

arikrak 10y ago

Instead of the government trying to protect their loans and end up doing the opposite, maybe the government shouldn't be in the business of lending money to individuals? Government + lending + a supposed social benefit = disaster. First it was with helping people own homes, and now it's with helping people go to college. It sounds nice, but by lending money the government can just hide the true cost of what their doing. (Meanwhile government loans for housing have gotten worse: http://www.economist.com/news/leaders/21705317-americas-housing-system-was-centre-last-crisis-it-has-still-not-been-properly http://www.economist.com/news/leaders/21705317-americas-hous...)

paulddraper 10y ago

This is an instructive lesson. "Free education" they say. "It will solve problems" they say. "Education will be better" they say. No, it won't. Free education -- or subsidized loans -- puts a disconnect between education and its cost. If the person paying is not the person deciding, a poor decision will be made. It's just like how HSAs prompt people to think about what they're spending their money on. ITT would not exist but for government spending. Sure, some will beat the dead horse of more regulation. But the real answer is STOP SUBSIDIZING. Stop subsidizing education, stop subsidizing mortgages, stop subsidizing GM, stop blowing decisions sideways by removing the universal language of cost from the discussion.

themartorana 10y ago
Stop subsidizing education? Do you propose this for just higher education? Or is it all education you'd like taxpayers to stop paying for? Unsubsidized education either a) means more private loans somehow now exempt from bankruptcy proceedings or b) education is now only for those that can afford it. I am the complete and total opposite of your position. How it is that we provide 12-14 years of education for free, but then burden the economy with an insane amount of unsecured debt for the last four is insanity. It places our economy at risk, it severely stunts upward mobility, it burdens our youngest minds with mortgage-sized debts, and it sinks people into a lifetime of debt. If college is, in general, required to actively participate in our society, it should be paid for the same as (Pre)K-12. Edit: I'd like to say that I agree that subsidizing activity as a direct pass through of money from government to for-profit enterprise is a bad idea. Don't subsidize for-profit colleges. But they were never needed to begin with.
- paulddraper 10y ago
  The average college grad makes something like a million dollars more over his lifetime than a non-college grad. If that last 4 years cost the most, I can see why. Anyway, option B. Having a restaurant is only for those who can afford it. Owning a house is only for those who can afford it. Starting a start-up is only for those who can afford it. Fortunately, we have a system that allows people to pay each of those costs over a period of time (in some cases, even over a lifetime, as you pointed out). Maybe your restaurant goes under, or your house goes underwater, or your skills aren't valuable, or (however unlikely) your start-up fails. I don't know what to tell you. Reality's a bitch. Hopefully your research and efforts are enough for you to make the right decisions. It's quite possible for a $20k education to produce a $1 million payoff. In that case, anyone can afford it. It's also possible for a $150k education to produce a $90k payoff. In that case, few can afford it I'm not going to tell you what to do, pay for it, or take your earnings. You alone can make those decisions.

peter303 10y ago

Will coding academies go down the same route as for profit colleges? Right now they are the darling of politicians who think they could solve the country's unemployment and tech shortage problems. But once your put Wall Street in charge and scale them up handle large numbers of students, I wonder if they will become the next ITT.

WheelsAtLarge 10y ago

Yes ITT was a money grabbing parasite and I'm glad they are gone. But the glamorous 4 years schools aren't as great as they set themselves to be. Many students come out of the great schools owing thousands and having a very hard time getting a job. This is not new. The fact is that universities weren't created for job training. Their job was to expand your knowledge. That's why you can get a degree in Greek mythology or Latin or whatever. It was really a way for rich people to spend their time in something constructive. Somewhere the idea of a university and job training came together but universities aren't very good at job training so that's the big problem. We as a society don't have a great way to train the massed for society's jobs. Community college focus on getting you to a four year college but they need to do a better job at job training. For profit schools have tried but they focus on profits and lose sight of the students. We blame the institutions but students also need to take responsibility. If you can't take the time learn don't expect to get a job where someone needs to have a productive employee to keep the business going. Also the K-12 schools need to do something to fix the problem. How is it that a student goes through 13 years of school and not learn to be a productive employee? That the real shame.Yet we put the blame elsewhere. Politicians love to argue the effects of same sex bathrooms but they aren't willing to take on why schools are failing society. We need to fix that.