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."

Comments

How is this different from any university?

[Anonymous Coward]

Funny how few people call out universities for their bullshit marketing and loan sharking. Is it a Stockholm Syndrome among you geeks?

Re:How is this different from any university?

[binarylarry]

That's exactly what I thought....

"So.... just like our entire higher education system?"

Re:How is this different from any university?

[rholtzjr]

Just because an organization is considered a "not for profit" does not mean "someone" is not making a decent amount of money doing what they do. Take a look at any Charity, foundation, donation organization, etc. and take a look at the person running it. In most cases that person is making millions.

Re:How is this different from any university?

[hey!]

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.

Re: How is this different from any university?

[jellomizer]

For Profit, NFP, self taught... I have had good and bad experiences with them. It really comes down to how willing they are to learn after school.

I found For Profit there is less hand holding in teaching on how to use the app but covering theory and concepts are hard.
For NFP the theory and concepts are easier but getting them on different tools and showing them when you need to break the rules gets harder.
Self taught are often experts in some areas however they will have unpredictable gaps in their knowledge.

Now if the person is willing to learn, ask questions, and think about what they are learning then in the long run their education will not matter much.

Re:How is this different from any university?

[lucm]

The starting salary may be higher but the difference disappear over time, it doesn't last for the whole career.

I remember having this exact discussion with a HR person while looking for candidates for my team. I was surprised by the salaries so she explained that junior people with a degree from a prestigious school started higher on the salary scale to recognize their investment and possible better education but that someone with a community college diploma would catch up within a few years.

This being said does that mean it's a bad investment? If salary and job opportunities are the only factor then no it's not worth it, but if you consider the education itself and the boost of confidence it can bring in the first years that could be valuable. Personally I'm more in favor of the strict minimum education in terms of time and money to get to work as soon as possible and earn as soon as possible without any kind of debt but that's a matter of preference.

Re: How is this different from any university?

[0100010001010011]

I found For Profit there is less hand holding in teaching on how to use the app but covering theory and concepts are hard.
For NFP the theory and concepts are easier but getting them on different tools and showing them when you need to break the rules gets harder.

Broken down it's the technicians vs the engineers.

The "For Profit" colleges filled a niche which was the fact that we forgot about the skilled trades in the US. Everything taught at ITT tech is a trade option in Germany. You don't need 4 years of theory you need a hands on approach to learning what you need to know to get the job done.

"Not for profit" colleges are how they've always been, theory based academia. If you don't want to learn the theory and learn stuff unelated ("well rounded student") then college isn't for you, try a trade.

Both are equally important jobs. But they're separate. You don't hire an electrician when you need an electrical engineer and you don't hire an electrical engineer when you need an electrician.

The same applies to computer based jobs. Despite what eveyone says on Slashdot a handfull of "code bootcamp" would do wonders in some organizations. If HR hands me another CS graduate that can tell me the *theory* behind Python's design and not actually write Python I'm going to raise hell again.

Re:How is this different from any university?

[ArmoredDragon]

Because the other universities and colleges are "not for profit", i.e. government run so off the hook. They know how to play the crony games with the politicians and bureaucrats.

Even though many are grade inflating diploma mills who graduate students with worthless degrees and lots of debt as well.

Regardless of whether or not a college is for profit, there are a lot of really stupid people out there who don't belong in college at all but go anyways because there's this overall mantra that "you must go to college". Contrary to popular belief, college is NOT for everybody.

I can't tell you how many people I've met that get either completely worthless degrees (i.e. being a history major) or degrees that are legit but are in professions that are over-saturated (i.e. law degrees.) You can get these degrees at what are otherwise good state universities, and, it's not the university's fault if you fail to make a successful career out of it, even though you were (in a sense) doomed to failure before you even took your first class. However we should probably stop sending the message that college is for everybody, lest these people go deep into debt for no good reason at all, and worse, since there's a lot of them, they put upward pressure on tuition costs that make it more expensive for those who should be going to college.

And on that note, I think student loans are a really dumb idea, no matter what college you're going to or what degree you're getting (unless you want to be a doctor, which most med school students I've spoken to said it's just not worth it and if they had to start over again, they'd have done something else.) Furthermore I have almost no sympathy at all for anybody who has a huge amount of student loan debt. Why? Well, if college costs you so much that you have to borrow, you're probably doing it wrong. Community college is dirt cheap, so you should be taking advantage of that for as long as you can.

I personally spent about $14,000 on college, with 75% of my bachelor's degree credits coming from community college, (my graduate's degree is from Northern Arizona University) and two years after graduating I'm already within the top 30% of income earners in the Phoenix area.

Then again I'm also the kind of guy who believes that if you need to borrow money to buy a car, then you're paying too much, so maybe I'm biased.

Re:How is this different from any university?

[ShanghaiBill]

... or United Way (both often cited as "bad" or "misleading" charities)

The United Way is not considered "bad" just because of where their money goes, but also where it comes from. Every year they run a "Federal Campaign", to collect money from government employees. When I was in the military, each unit had a quota of contributions to collect, and commanders were judged on their ability to collect. This led to a lot of coercion and abuse. Anyone who didn't agree to sign up for a monthly payroll deduction was assigned to clean latrines or given guard duty when everyone else had a 4 day pass. There were privates with families to support, barely making enough to survive, getting their pay docked every month despite needing the money far more than most United Way recipients. United Way collects contributions, skims administrative fees off the top, and then passes the rest on to the actual charities. It is far better to contribute directly to deserving charities, and leave United Way out of the loop.

Re:How is this different from any university?

[quetwo]

A lot of it has to do with the states dropping their support of higher-ed. In Michigan, as recently as 2000, 80% of the major Universities' operating budget came from the state. In 2015, it was down to 15%. Costs to educate each student (budget / number of students) has been flat, without considering inflation. Funding sources from outside the state have gone up, but not enough to offset the difference. Consequently, tuition used to cost $135/credit hour for in state, and now it costs $375/credit hour.

This is stupid

[binarylarry]

The problem isn't ITT, it's that people think some school (or ANYONE ELSE) will make you successful.

You make yourself successful. Only you.

Re:This is stupid

[Anonymous Coward]

Yeah seriously. They did zero research before taking on 70 thousand dollars in debt? And then they relied on the school to "place them" in a job (what the actual fuck?!), and made apparently no effort to find something better than telemarketing? Those people sound completely useless to me, if they didn't get shafted by this school they'd still get taken advantage of by someone else.

Re:This is stupid

[OrangeTide]

Places like ITT give you quite the song and dance when you visit their campus. And "walk you through the process". The simple mistake people make is not getting a second opinion. Are students responsible for their own mistakes? Sure. Is it fair? No. Should we shut down those who exploit other people, that is gain profit without offering something of equivalent value in return? Absolutely.

Re:This is stupid

[drinkypoo]

The problem isn't ITT, it's that people think some school (or ANYONE ELSE) will make you successful.

Eh, yes and no.

You make yourself successful. Only you.

...and mostly no. You have to take advantage of opportunities, but you don't create opportunities by yourself. It's a group effort. Sometimes, others work against you, whether intentionally or incidentally. ITT deliberately defrauded students. Willful fraud is wrong because we know that it's possible to take advantage of people, and when that happens it harms society. It's expensive for all of us when people's lives collapse.

If you go to a school it's reasonable to expect (if not assume) that you're being provided useful education. It might not be moneymaking in itself, but if they promise that it will be, then it had damned well better be. If they are promising job placement, then they need to deliver. If they don't, they're committing fraud, and they rightfully should be held accountable.

Tech schools are mostly garbage, which is sad because if they were any good, they'd be great things. Being immersed in a learning environment solely with other people studying the same sort of things you're studying could be a massive boon for some people, and in some situations. Alas, they are mostly garbage, and you'd do yourself and your community (and by extension, your country) more good by simply going to a community college. They have their flaws to be sure, but they are still better than technical schools on average. They're a fairly poor place to get a good quality education and a degree on the same schedule, because good educators come and go from them somewhat irregularly, but a lot of them have fairly fantastic programs of various types — especially in the applied arts.

The problems with ITT tech equally apply to pretty much any of these technical schools, and they're pretty much all the same deal although they are not all equally sleazy. The automotive institutes are very much the same story; for less money you could attend a community college and actually get a legitimate degree along with a pile of ASE certifications, while learning from people with at least as much experience as those teaching in the purely for-profit technical schools. If you want to become a smog technician or a master auto body tech you don't want to go to a tech school, as they will rob you blind. But you can bang the former out in a couple of years (starting from scratch) and the latter out in three or four and for comparatively very little money by just going to a CC.

We all need help in our lives. Apprenticeship used to be popular, schooling still works... and sure, trial and error is a thing, but let me tell you, it can be more expensive than just going to school.

Re:This is stupid

[__aaclcg7560]

Please point me to one person in the past 100 years that achieved success with exactly no education at all and no help from anyone else.

A successful person doesn't have to be the smartest person in the room. Here's a list of 100 entrepreneurs who succeeded with little or no education, including a half-dozen who dropped out of elementary school.

http://elitedaily.com/news/business/100-top-entrepreneurs-succeeded-college-degree/

Re:This is stupid

[BarbaraHudson]

Why would anyone with more than 1 brain cell not do some research before visiting a campus?

Now, the faculty were in on the scam, so why aren't the students suing their teachers asses for fraud?

They sought out people who thought that this was their only option,” a former Charlotte campus faculty member says. "[The students] were really trying to make a difference in their lives and trying to make a difference in their families lives," she says, adding that the campus reps saw them as "cash cows".

By the time most students realized how bad ITT was, it was too late. "The credits that they earned couldn’t be transferred anywhere," she explains. "They were stuck. They needed to graduate. It worked out for some people, and they were able to move on. But they were some of the few." (According to a 2012 Senate investigation of ITT, about 52 percent of students who enrolled in 2008 dropped out by 2010.) "I know a con when I see one."

You could not work there and not be aware that you were part of the scam. RICO for everyone involved. Sending 1,000 faculty to jail will send a message to the other crappy diploma mill scams, as well as alert the pubic, which seems to be sleepwalking.

Re:This is stupid

[Hercules Peanut]

The problem isn't ITT, it's that people think some school (or ANYONE ELSE) will make you successful.

You make yourself successful. Only you.

I wonder how you parents feel about that?
Orphan? Legal guardian, then.

Did you learn nothing in K-12?
No college education, I assume, or it was totally useless.
No professor or teacher ever added value to your life.
You were just born with all of the tools you needed to be a self made success.

Have you EVER worked as part of a team...on a project, perhaps?
Did no one other than you do any work?
Have you ever been a part of anything bigger than yourself?

No one does it completely alone. I suspect you have had more help than you are willing to admit.
5, Insightful?

Re:This is stupid

[rwyoder]

The problem isn't ITT, it's that people think some school (or ANYONE ELSE) will make you successful.

You make yourself successful. Only you.

Wrong.
Watch this: http://www.pbs.org/wgbh/frontl...

The problem is the for-profit "schools" who:
- Admit *anyone* with a pulse, regardless of qualifications.
- Charge tuition that is multiple times what a real school charges.
- Do crap like sending nursing students to a Scientology museum and call it "clinical hours". (They graduated w/o ever being in a hospital).

Re:This is stupid

[naubol]

Here's a list of 100 entrepreneurs who succeeded with little or no education ...

I suppose it depends on your definition of education.

Abraham Lincoln is the first gentleperson on your list and I would submit that he is one of the most educated presidents the US has had. He managed to become educated without much formal schooling, which is quite the accomplishment. This is based on my understanding of the word educated, however.

If you define an education as the transmission of wisdom or knowledge from those who have it to those that don't, I can conceive of few better ways to acquire an education than to spend one's youth reading books, provided one has the appetite for it. Mr. Lincoln seems to have been no slouch in this regard! Not to say that a great institution cannot generally out perform reading to one's self if the student maintains an equal appetite.

On the other hand, quite a large number of people attend school without receiving much knowledge or wisdom, and I concede some would claim they received an education. I wouldn't agree. If ITT was giving people an education, as I define it, I suspect the value of the experience would more easily subsidize the cost, regardless of the reputation of the degree.

I strongly believe that no one is really successful without an education, and many are able to achieve great things by acquiring an education in an unusual manner. Lincoln is no exception.

Unfortunately, I think the modern conception of education serves institutions, more than the population, who charge tuition and distracts from the original intent and meaning of the word.

For Profit Education is a Scam

[Anonymous Coward]

Unwitting students,
lax regulation,
guaranteed student loans,
PROFIT!!

though one could say the new business model for "non-profit" educational institutions is mirroring the for-profit ones in administrative bloat. The whole thing is about to tumble.

I find this hard to believe

[SecurityGuy]

Valladares took out $65,000 in federal and $7,000 in private loans to pay tuition. Four years later, he now owes more than $200,000 on his loans due to compounding interest.

That's 29% interest. Who out there is actually offering student loans at 29% interest?

Re:I find this hard to believe

[Karl Cocknozzle]

Why was ITT singled out by the Federal Government when no different than many other places?

There are explicit rules for the for-profit institutions to gain access to student loan funding form the feds. The one that ITT specifically ran afoul of is their "job placement" claims were basically bullshit. They claimed a 90+% placement rate, but the truth is they couldn't substantiate that with actual paperwork and documentation, and many of the people they could substantiate placing weren't making jack-shit.

They were operating an ongoing fraud, and were validly and correctly "singled out" for doing so. They repeatedly, for many many years, lied to their accreditation body to continue their access to the federal student loan program fraudulently, despite knowing they legally didn't have any business getting funds through that program.

In short, there's a gulf thousands of miles wide between what ITT did and what "many other places" are doing. And I'll note: With the demise of the ACICS we're going to find a lot of these for-profit "schools" can't get a new accreditation and end up shutting down. This is, in broad strokes, a "good thing," and you should assume ITT is the first, not the last, school of this type that will end up shutting down.

Commercial "education" generally fails

[gweihir]

Education is one of the things that if done well requires a high level of skill and dedication from those doing the education. Hence if done well commercially, it becomes too expensive for almost all people.

The solution is to have the state do it and to draw the teachers from qualified idealists and let them do it how they see fit. Sure, this has its own set of problems, but it is vastly better than the capitalist way of doing it, because that does not work at all. The authoritarian way (curricula specified in detail by the state) universally fails nicely as well.

Incidentally, this is that standard situation in Europe and it works reasonably well. It does require a large enough supply of smart, capable, idealistic and non-greedy people though, and that may be hard to come by in the US, especially the "non-greedy" part as US society is pathologically focused on money. With a candidate that ran his own scam of this type (Trump "University") having a realistic chance of becoming the next president, I do not think the future is bright for US academic education.

Re:Commercial "education" generally fails

[Salvage]

That was roughly the situation in the U.S. long ago (at least for lower levels of education), but it was built on the how the culture of the time effectively restricted certain social classes (women) to certain job sets (education), which led to a relatively high number of smart, capable and at least somewhat idealistic applicants for relatively low cost (essentially by forcing greed out of the picture).

This was not, however, a bound relationship, so as the culture changed and employment opportunities broadened, the pool of quality applicants spread out over other jobs, and the educational system didn't adapt to find new ways to draw people in.

The capitalist approach in general is probably the result of someone looking at the above issue and, well, grasping at straws for some way to change things.

I've worked in a different field where my peers were mostly smart (90th percentile plus, we checked), capable (regularly tested), idealistic (audited) and non-greedy people. When polled for why they were working there, no one mentioned money. But when presented with the idea of working without pay, most countered that the requirement of having to pay the bills would force them to work elsewhere. "Greed" can be a relative term, and in the strictest sense you'd probably only find non-greedy people among those who don't have to deal with paying the bills.

Another aspect to all this though, is that even if you take money out of the picture, you're still changing this from one form of capitalism (money based) to another (capable people). After all, capitalism is fundamentally about leveraging resources. By de facto default these days, that resource is assumed to be money, but that's not always the best fit.

Re:Commercial "education" generally fails

[gweihir]

Which is another drawback of education for commercial gain: The providers of this sort of "education" have strong motivation to allow anybody in that can pay. This is not a good idea, as it waters down skill levels and degrades grade quality. A society dependent on technology cannot afford that in the long run.

Re:This is victim blaming.

[aaarrrgggh]

Yes, it is victim blaming. People are told to go to university to be successful, so they do. Without a plan. Or, with a plan that they don't realize won't work until it is too late.

I have real sympathy for people in nursing programs that get ripped off: education is required, and it can be a well paying position. People waste their money going to DeVry or ITT to learn CAD and the like; we need to do a better job creating internships for people to learn job skills, and focus university on expanding general knowledge.

Re: This is victim blaming.

[aaarrrgggh]

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...

I have to post this

[Opportunist]

Was this their ad?

Usenet memories

[grub]

I remember way back that when you did an alphabetical dump of usenet groups there were several that when listed said "ITTSUCKS" in large block letters.

Re:score inflation

[BarbaraHudson]

If at least one student isn't being held back per class every year there's something wrong.

Re:Comuter programming redux

[__aaclcg7560]

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

Re:We don't need an 4 year high cost party to get

[lucm]

I guess it depends on the industry, but I've been in this one for almost 20 years and anywhere I've been, the best technical people I've met always had either a community college diploma, were college dropouts or even had some vocational school training.

I can't explain it but it feels like those people are more willing to try things, to venture out of their zone of comfort and to deal wih conflict. Meanwhile, the whizz kids with degrees up the pooper sure know a lot of theory and can excel at some things, but they usually behave like union people, never willing or open to set foot outside of their job description. And while the industry sure needs warm bodies to write test cases and optimize loops, it's not the Mr Propers showing up to scrum meetings only to babble about having one too much item in their kanban that make things move forward.

There's something about higher education that seems to suck the creativity and open-mindedness out of people and replace it with a mild form of entitlement.

Well that's my take on this based on my own experience. But I guarantee you that 9 times out of 10, I can spot a self-made developer or sysadmin because he's the one willing to solve an urgent problem without asking for a fucking ticket number.

Re:We don't need an 4 year high cost party to get

[lucm]

It's the first time I see someone bragging about being a member of the IEEE, so let's see what they have to say about "associate members":

Associate member grade is designed for technical and non-technical individuals who do not meet the qualifications for member grade but who wish to benefit from membership and partnership in IEEE, and for those who are progressing, through continuing education and work experience, toward qualifications for member grade.

So in a nutshell, you're paying them $200 a year to be a wannabe IEEE member. Sounds like a great investment, although I'd personally spend that money at a stripclub, but hey, whatever floats your boat.

Re:We don't need an 4 year high cost party to get

[lucm]

So you have physically met how many of those smart IEEE people? And how long has that interaction lasted?