ITT Technical Institute

ITT Technical Institute
Motto Education for the Future
Type For-Profit
Established 1969 (1969)
President Eugene W. Feichtner[1][2]
Students 57,000[3]
Location Carmel, Indiana, United States
Campus Locations More than 130 campuses
Affiliations ITT Educational Services, Inc. (1994-2014)
ITT Corporation (1965-1994)
Website itt-tech.edu
ITT Tech Canton, Michigan campus

ITT Technical Institute (often shortened to ITT Tech or ITTTI), is a for-profit technical institute with over 130 campuses in 38 states of the United States.[4] ITT Tech is owned and operated by ITT Educational Services, Inc., a publicly traded company headquartered in Carmel, Indiana.[5]

Students and employees have written critically about the school's high tuition and low academic standards.[6] ITT Technical Institute charges among the highest tuition in the industry. It also has the industry's highest rate of loans that go into default within two years of attendance.[7] In 2014, the tuition for attending an ITT Tech campus ranged from $45,000 to $85,000.[8] According to ITT Tech literature, credits earned at ITT Tech are unlikely to transfer to other colleges.[9]

On February 26, 2014, the Consumer Finance Protection Bureau (CFPB) sued ITT, alleging that they used high-pressure tactics to coerce students into high-interest private loans that were likely to end in default.[10][11] ESI is also being investigated by at least a dozen state attorneys general.[12][13][14] On October 19, 2015, the U.S. Department of Education announced that because of the company's failure "to meet its fiduciary obligations," it was being placed under "heightened cash monitoring".[15]

History

ITT Tech was founded in 1946 as Educational Services, Inc. and has been headquartered in Carmel, Indiana, since 1969. From 1946 until 2004 ITT was an abbreviation for Institute of Technological Technology, however on May 4, 2004 the name was officially changed from Institute of Technological Technology Technical Institute to ITT Technical Institute. From 1965 until its IPO in 1994, ITT Tech was a wholly owned subsidiary of ITT Corporation (as "ITT/ESI"). By 1999, ITT Corp. (which had merged with Starwood Hotels & Resorts Worldwide the year before) divested itself completely of ITT Tech's shares but the schools still use the "ITT" name under license. It operates over 130 ITT Technical Institutes across the US, which primarily provide career-focused degree programs to approximately 60,000 students.

California Regent Richard C. Blum (Senator Dianne Feinstein's husband) has been a significant shareholder of the stock[16][17] despite allegations of conflict of interest.[18]

Board member Vin Weber has also been a key political operative for the company since 1994.

On February 26, 2014, the Consumer Financial Protection Bureau sued ITT for its use of loans the college chain knew would default.[19] In August 2014, the US Department of Education placed ESI under "heightened cash monitoring" failing to submit financials and compliance audits tied to its administration of federal financial aid. CEO Kevin Modany also announced his resignation.[20]

In the wake of these problems, accounting firm PricewaterhouseCoopers left ESI and [21]Deloitte was named the external auditor for ESI.[22] In November 2014, J.P. Morgan Chase Bank loaned ITT Educational Services $79,000,000 to "satisfy a federal penalty".[21] In December 2014, Cerberus Capital Management issued a $100,000,000 term loan to ESI. The loan will mature in December 2017.[23]

Academics

ITT Tech offers AAS, bachelor's BAS, and master's (business-only, online) degrees. ITT Tech is nationally accredited by the Accrediting Council for Independent Colleges and Schools. It may be impossible to transfer credits from ITT to a traditional university; per the ITT Web site, "it is unlikely that any credits earned at an ITT Technical Institute will be transferable to or accepted by any institution other than an ITT Technical Institute."[24] ITT's brick-and-mortar offerings include more than 130 locations in 35 states.

Controversy

In August 1998, 15 former students alleged misrepresentation, fraud and concealment by ITT arising out of their recruitment and education at ITT campuses. In September 1998, ITT settled all of the claims.[25]

On February 25, 2004, federal agents raided the company's headquarters and ten of its campuses.[26] The investigation negatively affected the company's stock and triggered several class action lawsuits by investors.[27][28] In October 2005, ITT agreed to pay $730,000 to settle a lawsuit with California in which employees alleged that it inflated students' grade point averages so they qualified for more financial aid from the State of California.[29]

An investigation by WGBA-TV (NBC26, Green Bay, Wisconsin) found evidence of widespread grade inflation. In one instance, a student got 100% on a computer forensics assignment by emailing the professor a noodle recipe. The station believes this to be a way to increase federal student aid funding.[30] In early March 2011 WTMJ-TV (NBC4, Milwaukee, Wisconsin) ran an investigation finding teachers lying on attendance records so they could get cash bonuses paid by ITT Tech. ITT Tech formerly used an attendance policy as part of a requirement to get financial aid to show student progress.[31]

In 2013, a complaint was filed against ESI and two ESI executive officers in US District Court for the Southern District of New York regarding securities. The Massachusetts Laborers' Annuity Fund filed a similar complaint and the cases were consolidated. The Plumbers and Pipefitters National Pension Fund and Metropolitan Water Reclamation District Retirement Fund were the lead plaintiffs.[14] Students continue to allege that private loans with JP Morgan Chase and other banks are predatory.[11] In 2013 USA Today listed more than 50 ITT campuses as "red flag" schools because their student loan default rates were higher than their graduation rates.[32]

See also

References

  1. ↑ "Corporate Governance - Management & Directors". ITT Education Services. Retrieved 2010-04-16.
  2. ↑ "Eugene Feichtner: Executive Profile & Biography". BusinessWeek. Retrieved 2010-04-16.
  3. ↑ Calia, Michael; Dulaney, Chelsey (October 17, 2014). "ITT Enrollment Declines Not As Steep As Feared". The Wall Street Journal.
  4. ↑ ITT Educational Services, Inc. Announces the Opening of its First College in West Virginia Expanding the Company's Reach into 37 States MarketWatch, November 14, 2008
  5. ↑ "FAQ." ITT Technical Institute. Retrieved on November 23, 2011. "Our principal executive offices are located at: ITT Educational Services, Inc. 13000 North Meridian Street, Carmel, Indiana 46032"
  6. ↑ http://www.nytimes.com/2010/03/14/business/14schools.html?src=me&ref=general&_r=0
  7. ↑ Bill Alpert (14 April 2012). "Clever Is as Clever Does". barrons.com.
  8. ↑ http://programinfo.itt-tech.edu/cost.pdf
  9. ↑ https://www.itt-tech.edu/downloads/credits.pdf
  10. ↑ Lopez, Ricardo. "Regulator accuses ITT for-profit college chain of predatory lending". latimes.com. Retrieved 2014-02-27.
  11. 1 2 "CFPB Sues For-Profit College Chain ITT For Predatory Lending". Consumer Financial Protection Bureau.
  12. ↑ "State Attorneys General Open Major Investigations of Big For-Profit Colleges". The Huffington Post.
  13. ↑ Stephanie Armour and Alan Zibel (13 January 2014). "CFPB, State Attorneys General Expand For-Profit College Probe - WSJ". WSJ.
  14. 1 2 "EDGAR Pro". edgar-online.com.
  15. ↑ Nick DeSantis and Goldie Blumenstyk , "U.S. Tightens Restrictions on ITT's Access to Federal Student Aid", Chronicle of Higher Education, Oct. 20, 2015 Accessed 21 Oct , 2015
  16. ↑ "Who Runs the University of California?". counterpunch.org.
  17. ↑ "Is UC regent's vision for higher education clouded by his investments?". latimes.
  18. ↑ Berkeley Daily Planet, Berkeley California. "Billion Dollar Baby:
    The University of California invests $53 million in two diploma mills owned by a regent.. Category: Page One from The Berkeley Daily Planet"    . berkeleydailyplanet.com.
  19. ↑ "U.S. sues college chain ITT over loans". USA Today. February 26, 2014. Retrieved February 27, 2014.
  20. ↑ "ITT Educational CEO signals resignation amid stock freefall, federal scrutiny". ibj.com.
  21. 1 2 "ITT Auditor Walks Away Amid CEO Search". law360.com.
  22. ↑ "EDGAR Pro". edgar-online.com.
  23. ↑ "ITT Educational Services (ESI) Enters $100M Term Loan Agreement with Cerberus Business". StreetInsider.com.
  24. ↑ "ITT Tech - Campus Programs FAQ". itt-tech.edu.
  25. ↑ ITT Educational Services, Inc · 424B4 · On 1/27/99
  26. ↑ Feds serve warrants at ITT Tech campuses, CNN
  27. ↑ "MCPmag.com -- Microsoft Certified Professional Magazine Online". certcities.com.
  28. ↑ ITT's CEO Expects Lengthy Federal Investigation, Stock Slips, Channel Web Network, Feb. 26, 2004, Mark Jewell
  29. ↑ "ITT, Calif. Settle False Claims Lawsuit". insidehighered.com.
  30. ↑ Diamant, Aaron. "I-Team: Easy A's". WGBA-TV. Archived from the original on 2011-02-18. Retrieved 2014-11-02.
  31. ↑ Jim Conigliaro. "TODAY'S TMJ4 - Milwaukee's Source for Local News and Weather". JRN.com.
  32. ↑ Mary Beth Marklein, Jodi Upton and Sandhya Kambhampati, USA TODAY (2 July 2013). "College default rates higher than grad rates". USA TODAY.

External links

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