ITT Technical Institute (ITT Tech) was a private for-profit technical institute with its headquarters in Carmel, Indiana and many campuses throughout the United States. Founded in 1969 and growing to 130 campuses in 38 states of the United States, ITT Tech was one of the largest for-profit educators in the US before it closed in 2016.
The institute was owned and operated by ITT Educational Services, Inc., a publicly traded company headquartered in Carmel."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" The company also owned and operated the Breckinridge School of Nursing and Health Sciences schools.
In 1999, two former ITT employees brought forth a lawsuit alleging the school used illegal recruitment practices, saying the school was "abusing that system for years and ripping off the government for billions of dollars." In 2004, the Justice Department initiated a criminal investigation into ITT colleges in eight states.
Following state and federal investigations, the United States Department of Education prevented students from using federally guaranteed student loans at ITT Tech locations in August 2016. All ITT Tech campuses were closed the following month and ITT Tech filed for bankruptcy.
In 2018, ITT Tech's court-appointed bankruptcy trustee sued the United States Department of Education and lenders to pay $1.5 billion in claims against ITT, alleging that in allowing loans to low-income ITT students, regulators neglected their oversight duties. Three years later, the US Department of Education allocated $1.1 billion in loan relief to an additional 115,000 former ITT Tech students.
History
In 1946, ITT Tech was established as Educational Services, Inc. From 1965 until its IPO in 1994, ITT Tech was a wholly owned subsidiary of the ITT Corporation (as "ITT/ESI"). During its years in operation, it was based in Carmel, Indiana. By 1986, all its institutions had become known by the common name "ITT Technical Institute." By 1999, ITT Corporation had divested itself completely of ITT Tech's shares. The schools were allowed to continue using the "ITT" name under license.
In the mid-2000s, CEO Rene Champagne cashed out more than $50 million in stock, before stepping down from the position in 2007. Kevin Modany was appointed as CEO, while maintaining all of the positions (president, COO, and director) he had held from early June 2002.
It acquired the financially struggling Daniel Webster College (DWC) in Nashua, New Hampshire in June 2009 for $29.3 million. The nonprofit college converted into a for-profit institution. In 2013, ESI began operating public charter schools in three cities: Indianapolis, Tempe, and Troy, Michigan. In charter documents, the company referred to potential students as "educational have-nots.""The Early Career Academy Charter School: Application".Early Career Academy, Inc. March 15, 2013. "Each of the 147 ITT Tech campus' student population represents the communities in which they reside, and we believe this will be observed with The Early Career Academy. Based on the 2012, data the average age of the ITT Tech student is 28 years old and one in five has an average of 26.9 hours of transfer credit; and 68 percent take advantage of Pell grant. This tells us they that many of these students have tried other postsecondary institutions and for some reason it did not work for them. It also tells us that they do not have substantial means. Many are the first in their extended family to graduate from college. Many of these students have lost a decade of productive work in a career and consequently have not entered the middle class. They are part of the educational have-nots and are at ITT Tech to reverse course. We believe that we will attract these same types of students a decade earlier allowing them to forego the lost decade. The Early Career Academy will eliminate the lost decade, providing entrance into the middle class, the American Dream and a career of which they can be proud."
ITT Technical Institute charged among the highest tuition fees in the industry - between $45,000 to $85,000 in 2014 - and had the industry's highest rate of loans that went into default within two years of attendance.
In 2016, Chinese investors Zhifeng Zhang and Yude Zhang became ESI insiders, purchasing more than 3,000,000 shares of ITT Educational Services stock."Form 4 ITT EDUCATIONAL SERVICES For: Jul 18 Filed by: Zhang Zhifeng". ITT Educational Services Inc. StreetInsider.com. July 18, 2016. In July 2016, ESI reported that enrollment was projected to drop by 30% to 40% from 2015 to 2016. In August 2016, the U.S. Department of Education barred the company from enrolling new students who use government loans. On the 30th of the same month, ITT Technical Institute stopped accepting applications for new enrollment. At that time, ITT Tech said that existing students could still finish their studies. ITT Tech also said that they would continue to operate until the last of its enrolled students either graduate or drop out. However, on September 6, 2016, ITT Technical Institute announced that it was shutting down all of its campuses, effective immediately.
At the time of its system-wide closure on September 6, 2016, the school had more than 130 ITT Technical Institute campuses across the United States, with more than 40,000 students and 8,000 employees. ITT Educational Services filed for Chapter 7 bankruptcy liquidation on September 16, 2016.
As for DWC, Southern New Hampshire University (SNHU), a nonprofit college in Manchester, New Hampshire, hired most of the college's faculty and staff. This arrangement allowed the 2016–17 academic year to proceed as usual. DWC's aviation and engineering programs were effectively transferred into SNHU, which had offered to buy the Nashua campus. However, its bid got rejected, and SNHU instead opted to build a new on-campus science and engineering building.
Student loan debt and debt relief In 2014, Time magazine ranked ITT Technical Institute No. 2 on its list of "The 5 Colleges That Leave the Most Students Crippled By Debt". Among ITT Tech graduates with loans due in 2011, 22% had defaulted by 2014. This statistic compares with a default rate of about 13.7% for student loans generally. According to the Time magazine report, ITT Tech's default rate ranked second. The for-profit University of Phoenix had a lower default rate by percentage (19% at Phoenix versus ITT Tech's 22%). However, the total number of students in default from Phoenix was much higher (45,123 Phoenix students versus 11,260 ITT Tech students).
According to the College Scorecard, , 39% of ITT Tech graduates were paying off their debt, compared to the national average of 66% among all U.S. schools."ITT Technical Institute". College Scorecard Data. United States Department of Education. This percentage represented the number of graduates able to repay at least $1 in student loan debt in the three years after their graduation.
In 2018, a settlement to a class-action lawsuit was tentatively reached to wipe out student loans for attendees from 2006 to 2016. Students who attended ITT Tech may be able to have their debt forgiven by applying to the United States Department of Education for borrower defense to repayment. However, Secretary of Education Betsy DeVos announced on July 25, 2018, that the borrower defense rule would be rewritten and replaced with a stricter repayment policy starting July 1, 2019. On December 13, 2018, a US federal court ruled that the department's decision to do this was "arbitrary and capricious." The court sided with plaintiffs in invalidating the stay put in place by the Department of Education. There will be an additional hearing on December 14, 2018, to "address remedies."
In June 2019, Student CU Connect CUSO, a private lender for ITT Tech, settled with the Consumer Financial Protection Bureau and 44 states and the District of Columbia. The settlement called for CUSO to forgive a reported $168 million in private student loans. CUSO agreed to stop collecting on, and discharge, all of the loans.
Academics The school characterized ITT Tech students as "older and balancing family obligations with underemployment." The company's web site stated: "The programs employ traditional, applied and adult-learning pedagogies and are delivered through traditional, accelerated and distance methodologies in a learner-centered environment of mutual respect."
ITT Tech offered associate, bachelor's, and master's (business-only, online) degrees. The commonwealth of Pennsylvania was the only state which forbade ITT Tech to offer master's degrees. , the ITT Technical Institutes were offering 49 education programs in various fields of study.
At the vast majority of campuses, ITT Tech organized the academic schedules based on four 12-week academic quarters in a calendar year, with new students beginning at the start of each academic quarter. Using that calendar, students taking a full course load could complete associate degree programs in seven or eight academic quarters, bachelor's degree programs in 14 or 15 academic quarters, or a master's degree program in seventeen academic quarters.
Depending on student enrollment, class sessions at ITT Technical Institute campuses were generally available during the day and evening. The courses for education programs taught online were delivered through an asynchronous learning network and had a prescribed schedule for completion of the coursework. At the vast majority of ITT Technical Institute campuses, the class schedule for education program residence courses and the coursework completion schedule for online courses generally provided students with the flexibility to maintain employment concurrently with their studies. Student surveys indicated that a majority of ITT Technical Institute students worked at least part-time during their programs. A significant portion of classes involved practical study in a lab environment.
Accreditation ITT Tech was nationally accredited by the Accrediting Council for Independent Colleges and Schools (ACICS). According to ITT Educational Services' annual report for the fiscal year 2015, 31 campuses and more than 400 programs were not meeting ACICS standards for student retention. Per the ITT Tech 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." In April 2016, ACICS issued the company a "show cause" order to request information establishing why the accreditor should continue to accredit the institution. This order was in response to its programs being non-compliant with specific standards.
Rankings In 2015, financial news site TheStreet.com ranked ITT Technical Institute-Seattle on a list of "10 Best U.S. Two-Year Colleges That Actually Pay Off." According to TheStreet.com, ITT's Seattle campus ranked fourth in terms of alumni reporting rewarding careers, only after its sister ITT Technical Institute schools in San Antonio, West Houston, and San Diego.
Legal issues
In September 1998, ITT Tech agreed to settle eight legal proceedings involving 40 former students arising out of their recruitment and education practices at ITT Tech campuses. The settlements cost $12.9 million, which included legal fees.