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?
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