We're saddened and all the emotions you would expect to have," he said. Our focus is on our students and their families, and we'll do everything we can to mitigate the effects of what we believe was a preventable situation. The news comes nearly two weeks after the U. Department of Education prohibited ITT from enrolling new students who use federal financial aid.
The department also tightened its already enhanced oversight of the company, including a prohibition on ITT awarding raises, bonuses or severance packages to the company's executives.
A letter of credit is collateral the government asks colleges to set aside when officials have concerns that an institution may be unable or unwilling to pay back money it owes the government. There are very fundamental issues of institution integrity, financial stability, administrative capacity and their ability to meet federal and state financial aid administration requirements, so these are not small matters, these are matters that cut to the heart of the institution's ability to provide quality service to its students and to provide value to taxpayers in the Title IV program.
ITT had also been facing several state and federal investigations and legal actions, including lawsuits from the Consumer Financial Protection Bureau and the U.
Securities Exchange Commission. But it was ITT's issues with its accreditor that spurred the department to take its recent action. The Accrediting Council for Independent Colleges and Schools last month determined that ITT was not in compliance and "unlikely to become in compliance" with its criteria.
ACICS also is facing federal scrutiny. The department has been in direct contact with some community college leaders as well as regional and national accreditors about being flexible with transfer credits from ITT and helping its students transition to their new campuses, Mitchell said, adding that they've created a website specifically for ITT students to help them through the process.
However, transferring may not be an option for someone like Jimmy Bilbo, who was close to graduating this spring from ITT Tech with a bachelor's degree in cybersecurity. I was looking over the list they gave me, and none of the schools in the area have the same program I'm studying. Bilbo said ITT for the past week had been sending him emails explaining that classes would start normally and that the Education Department's recent actions only affected new students.
So far, he's struggled to get in touch with his campus for transcripts and help on what to do or where to go. He's also concerned about losing the monthly housing allowance that's included in his GI Bill benefits, which helps Bilbo pay his mortgage. At this point, Bilbo said he's not certain whether he would start over again at a new institution if he can't use the credits he's earned.
ACICS says that a job must require skills learned at school as a "predominant component of the job" in order to be counted. A lot of students spent years in school and thousands of dollars, only to find their degree would never land them a new job in their chosen field.
Because in many cases, the school's professional programs lacked the accreditation to work in those areas. For example, none of ITT's nursing programs had a nursing-specific accreditation.
Without the specific accreditation, a graduate can still sit for a licensing exam. But many employers simply won't hire someone whose degree comes from a school that doesn't have the accreditation.
And it will be hard for students to transfer credits or pursue a bachelor's or master's degree in nursing at another school. In one ongoing lawsuit, the New Mexico Attorney General alleges the ITT campus in Albuquerque misled students into believing the program either already had the nursing accreditation or would receive it soon.
But in reality, the school never began the formal application process. In addition, ITT's nursing and other programs across the country weren't regionally accredited, which made it hard for students to transfer credits to community colleges and public schools, most of which are regionally accredited. The Consumer Financial Protection Bureau alleges that ITT "exploited" students who may not have known that a regional accreditation was more preferable than a national one.
Tom Gesiorski, who graduated from ITT in with a bachelor's degree in criminal justice, is one of those students. He still works for the same security company he did before he got his degree.
Gesiorski says he wasn't able to get a job as a police officer because the school didn't have a regional accreditation. The New Mexico lawsuit and one from the Consumer Financial Protection Bureau allege that the school misled students about the private loans it offered between and While a majority of ITT students took out federal loans, they didn't always cover the full cost.
At the same time, a federal loan carried a 6. Sometimes, ITT would initially offer the student a zero-interest temporary line of credit. Recruiters were also encouraged to focus on prospective students eligible for military benefits, to maximize the amount of federal aid the college could receive.
In addition to internal documents that called for more aggressive recruitment from the military, executives also frequently talked about it among themselves. Enrollment was particularly high during the recession, when Americans were eager to seek new skills and find better jobs.
In , the school had more than 88, enrolled students compared to just 53, in Enrollments had a direct correlation with the amount of money ITT executives made in salary and bonuses every year. The Senate investigation also found ITT spent a large majority of its revenue on profit and marketing, rather than investing it into the curriculum, which was a red flag for federal investigators.
In short: ITT executives made it a point to funnel money from tuition revenue into their private accounts. They appealed to people who were watching television at odd hours and were unhappy with their lives. The brothers compliment each other and their family holds hands, wading through the waves. Then comes the call-to-action. While most of the databases and articles included in the pre-assigned class syllabuses were outdated, some did not even work at all because the subscription payment lapsed.
I thought that was a huge oversight. Valladares and other students say the technology taught at ITT was years outdated, and that many of the teachers were students only a few semesters ahead of the others. I was paying a lot of money for this school. I could have just done that from home. I would occasionally help the other students with the more hands-on stuff. Even if a teacher was inspired to create an interesting curriculum for the students, there was very little room to make a difference.
She explained that there was a corporate representative for each field of study such as the school of business or school of design in charge of creating the syllabuses for all campuses. The company seemed to use every trick in the book and even made up its own when the feds aggressively pursued the company for misconduct. For example, when student loan defaults became an issue at dozens of campuses in , ITT consolidated them into two unanalyzable entities to avoid regulation.
In , the FBI raided company offices in eight states looking for evidence of fraud relating to attendance, placement, and recruitment. Shortly after, then-CEO Omer Waddles resigned and the company was hit with several class action lawsuits.
But ITT stayed in business and was not charged with any wrongdoing. Between and , ITT expanded aggressively, adding 8 to 10 new campuses per year. In , ITT consolidated 26 campuses tracked by federal regulators into one entity to obfuscate financial information.
The same year, the school created an off-balance-sheet trust to increase the amount of private loans it could make available to students. In , when the Senate launched an investigation into 30 for-profit colleges, it used ITT as an example of misconduct. He was asked to clarify why, according to the Education Department, the for-profit college sector had the highest default rate in at By , things really started to unravel for ITT Tech.
The company was almost delisted from the New York Stock Exchange for failing to report financial information on time.
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