Slashdot Mirror
How ITT Tech Screwed Students and Made Millions (gizmodo.com)
An anonymous Slashdot reader shares "a grim story about a company that screwed poor people, military veterans, and taxpayers to turn a profit." Gizmodo reports:
By the time ITT Technical Institute closed its doors earlier this month, the for-profit college had been selling tenuous diplomas at exorbitant prices for more than 20 years...burying low-income and first-generation students in insurmountable debt, and evading regulators since the early 1990s...
ITT collected $178 million over two years just in federal education funding for veterans -- even while the company projected 33% of its students would ultimately default on their loans -- and last year 70% of the school's total revenue came directly from federal financial aid programs. Gizmodo spoke to one student who "will now spend the rest of his life paying back loans for a degree that is practically useless," after compounding interest turned his $70,000 loan into $200,000 in debt. "Like all of the former students interviewed by Gizmodo, he was placed in a job that did not require professional training" -- specifically, a game-testing position that didn't even require a high school diploma, while ITT "placed" another student in a $5.95-an-hour telemarketing job. Her assessment of ITT? "It was totally worthless."
ITT collected $178 million over two years just in federal education funding for veterans -- even while the company projected 33% of its students would ultimately default on their loans -- and last year 70% of the school's total revenue came directly from federal financial aid programs. Gizmodo spoke to one student who "will now spend the rest of his life paying back loans for a degree that is practically useless," after compounding interest turned his $70,000 loan into $200,000 in debt. "Like all of the former students interviewed by Gizmodo, he was placed in a job that did not require professional training" -- specifically, a game-testing position that didn't even require a high school diploma, while ITT "placed" another student in a $5.95-an-hour telemarketing job. Her assessment of ITT? "It was totally worthless."
That's 29% interest. Who out there is actually offering student loans at 29% interest?
Companies choose to outsource based on two (often realtors) issues: talent availability and cost. Some jobs have a rational pay ceiling; when you exceed this they are ripe for outsourcing.
Suppressing pay is not a noble goal, but if an employer can reduce the education debt that an employee has then maybe the salaries can be kept closer to the break-even point for outsourcing. Maybe we can increase the talent pool as well...
Was this their ad?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Well, the number one thing is that a degree from an accredited university marks you as middle class and therefore gets you through at least one round of filters for jobs. That works out to a difference in starting salary of about $17,500 more for the college graduate on average, which extended over a lifetime works out to be a big difference, even if you count four years out of the workforce and an average debt of $29000 on graduation. So on average it's a win.
Of course many people differ from average, and quite a few college grads may find themselves below average for salary and above average for debt. People in this category will of course feel very much like you do. An electrical engineering grad starting at around $60K at the start of his career probably won't.
Now there are a number of for-profit universities which have transient adjunct faculties and predatory marketing practices that aren't that different. But I guarantee if you got into an ivy-league school you'd get a very different experience. Or one of those historically Quaker institutions. Or MIT. It's not all the same thing -- although what is available to you financially and academically might not be so diverse.
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Back in the 1960's, corporations had training programs. The bean counters in the 1980's eliminated everything that didn't add value directly to the bottom line. The cost of training people to become employees got shifted to the public school and colleges. These days you need a college degree to get hired on as a filing clerk.
http://www.nytimes.com/2013/02/20/business/college-degree-required-by-increasing-number-of-companies.html