Another for-profit higher educational institution bites the dust …

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Last week, ITT Technical Institute, a for-profit higher educational institution enrolling ~40,000 students on more than 130 campuses across the country, announced that it is shutting down, while also laying off the lion’s share of its more than 8,000 employees.

This development comes hard on the heels of the closure of Corinthian Colleges last year. Together, it raises the question as to whether such “glorified trade schools” are doing any kind of service to students who seek to better themselves but who don’t have the scholastic record – or the money – to attend traditional two-year or four-year colleges.

tlpThere’s no question of the pent-up demand for higher learning. Guidance counselors push continued schooling as the next logical step for high school students, and society in general promotes a college education as the ticket to the good life.

For-profit colleges have benefited greatly from an environment which prizes higher education as the next logical step for high school graduates, and during the Great Recession beginning eight years ago, these schools continued to promote their curricula heavily while churning out more students into what was a very weak job market.

Students graduating from not-for-profit institutions had a hard enough time landing employment in their chosen fields … and for graduates of ITT, Corinthian and other such schools it was even worse.

corinthian_colleges_logoThe U.S. Department of Education had had its eye on both ITT and Corinthian for a number of years. Becoming alarmed at the inability of graduates to pay off their federally funded student loans, the Department ultimately banned both schools from enrolling any new students who rely on federal financial aid – which was nearly all of them, of course.

An angry ITT Technical Institute pronounced the sanctions unwarranted, inappropriate and unconstitutional – amounting to a death sentence.

A news release from the school stated, “These unwarranted actions, taken without proving a single allegation, are a lawless execution.”

As is often the case in such situations, there’s more than meets the eye. At the same time, ITT Technical Institute is also facing fraud charges from the SEC plus a lawsuit from the Consumer Financial Protection Bureau.

Not only that, the institution has been under investigation at the state level in 19 different jurisdictions.

Academic accreditation is also an issue, as the ACICS (Accrediting Council for Independent Colleges & Schools) determined that the school was not in compliance with ACICS’ accreditation criteria.  ACICS cited a whole range of questionable practices in admissions, recruitment standards, retention, job placement and institutional integrity.

The school itself, using aggressive and pervasive advertising while pushing its “power packed studies” in fields such as IT, electronics, CAD design and health services, also informed prospective enrollees that credits earned at ITT Technical Institute would be “unlikely to transfer.”

This sorry state of affairs at ITT-TI now makes it that much more difficult for ~40,000 students to pursue their career goals. It’s yet another example of how a laudatory mission can lead to negative consequences for the very people who need help in launching their working lives the most.

Ben Miller, who is a director for post-secondary education at the Center for American Progress, puts the blame nowhere but on the school:

“Years of mismanagement by ITT leadership put it in a position where the Education Department’s action was necessary.”

In the coming years, it will be interesting to see the degree to which other for-profit institutions with far-flung operations – Brightwood/Tesst, Capella, Strayer, the University of Phoenix and others – will fare under the klieg lights of heightened scrutiny.

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