
ITT Technical Institutes Shuts Down - jlas
http://www.bloomberg.com/news/articles/2016-09-06/itt-technical-institutes-shuts-down-leaving-a-hefty-bill
======
donatj
I went to a similar for-profit school in Minnesota who also similarly shut
down last year.

I still feel like they get a bad rap. Was it overpriced? Probably. Did I learn
a ton and have small class sizes. Absolutely. The instructors had all
previously worked in the industry, and knew their topics very well.

On top of all that, after graduation their persistent pestering of "how many
places did you apply to this week?" (surely to help their numbers) had a lot
to do with me actually getting a job. I didn't want to let the lady that
called me weekly down. It took a lot of persistence and interviewing but I
finally got my foot firmly in the door about 6 months after graduation.

I've been gainfully employed in the industry for ten years, I'm debt free, and
I'm happy. I'm thankful for my time there.

~~~
dntrkv
Just because you had a great experience does not negate the fact that for-
profit college students, statistically, fare much worse.

A common pattern I have seen:

Person does terrible in high school, doesn't get into a good college because
they don't have the drive or commitment to get good grades. They go to
community college, and surprise, they again get terrible grades and stop
going. After a while they want to go back to school, so they start looking
into these for profit colleges that promise them everything. These colleges
make it sound so much more appealing than community college, because, well,
community college isn't trying to sell you a bullshit education. Anyways,
these sales people will constantly pester you trying to get you to signup and
take out huge loans because for some reason we think that it's ok to lend
someone with terrible credit $50k+ in worthless education.

The end result is either them regretting their decision or trying to justify
it with some bullshit about it being a good learning experience or something
of the sort.

I have seen many people follow this exact path and I am glad to see these
companies shutting down. You can get a much better education for cheaper at a
community college.

~~~
ohyes
The end result you describe isn't much different than a number of 4 year
undergraduate degrees, PhDs or masters programs (all at "good" colleges).

The best advice I ever received was to not pursue a Ph.D. in philosophy.

It's wrong to think that departments at not-for-profit schools don't have a
marketing incentive that is (at best) indifferent to the best interests of the
student.

~~~
mcjon77
>The end result you describe isn't much different than a number of 4 year
undergraduate degrees, PhDs or masters programs (all at "good" colleges).

The difference is that the percentage of people with that negative end result
is MUCH higher. Looking at stats like the default rate for students at for-
profits vs non-profits is one indicator.

>It's wrong to think that departments at not-for-profit schools don't have a
marketing incentive that is (at best) indifferent to the best interests of the
student.

There is definitely some truth in this. HOWEVER, a big difference is that in
many cases the interests of the department and the student are more aligned at
non-profits than for-profits. The most obvious example is
completion/graduation rates. At least at the undergraduate and masters level,
there is a strong incentive to select students that are LIKELY to graduate
from the program. Bringing in woefully underprepared students who have little
chance of finishing the degree seems to be strongly discouraged at the
undergraduate and masters level. I cannot speak for the PhD level, since I
have little experience in that area.

Contrast that with stories about MULTIPLE for-profit colleges going so far as
to target the homeless for recruitment into their universities. In some cases
they went so far as recruiting people who DID NOT OWN A COMPUTER to sign up
for online degree programs. Since virtually all Americans (regardless of
credit score) qualify for up to $20K in loans per year (with a cap of about
$180K total), a students ability (or lack there of) to complete the program is
irrelevant as long as the money keeps flowing in.

~~~
xaa
> At least at the undergraduate and masters level, there is a strong incentive
> to select students that are LIKELY to graduate from the program.

Is there? It affects their attrition rate, but I am not sure that is a big
factor in which schools students choose. It seems to be based on things like
facilities, "vibe", majors available, prestige, quality of education. A high
attrition rate need not even suggest a low prestige or quality of education:
in many graduate programs, almost the opposite is true.

I went to a very expensive private but nonprofit Christian school for
undergrad. They accepted anyone, and their attrition rate was abysmally high
(although the education quality was fine). The attrition rate didn't matter at
all to their marketing, as parents sent their kids there for different
reasons. In fact, those kids who dropped out after 1-2 years were big
moneymakers, as they only took gen ed classes that are cheapest to staff.

For PhDs, attrition is much more discouraged, at least economically (I'm in
bio), because PIs/advisors pick students with the understanding that their
first 1-3 years they will be useless in research and only start "paying off"
near the end. This is why at the higher-tier graduate schools, there is a big
attrition at the general exam (1.5 years in) and it's very low afterwards. In
lower-tier programs there is low attrition throughout. And of course, many
grad programs pay stipends, so those programs lose money with no compensation
if someone drops out. Very different incentive structure than programs where
the student pays tuition.

------
aaronchall
The dream: take students who are mostly unprepared to succeed at college and
educate & prepare them for success in the real world.

The reality: most of these students will not realize a return on the
investment of their time and acquisition of a ton of debt that they cannot
discharge in bankruptcy. Many will fail to attend class, fail to take notes,
fail to do homework, fail to learn, and will not complete - but because they
have already sunk huge costs into the endeavor, will continue incurring more
costs in spite of the writing on the wall.

The economics means that these schools are unsustainable. However, some people
find success through these schools. How can we continue to serve these people?

Perhaps we could avoid throwing the baby out with the bathwater by creating
more community colleges, allowing more people to enroll in affordable
community colleges, complete milestones at their own pace, while providing
more direct subsidies of tuition for the truly needy. I agree that we would
benefit from more German-style apprenticeship programs as well. For all of
their worker protections, they still have incredibly low youth unemployment.

~~~
Yhippa
What's the case against community colleges historically? I graduated from
university a while ago and still take a community college course from anything
from math to photography when I have the time. I have been largely impressed
by what they have to offer.

~~~
JoeAltmaier
My local one has cut back on everything in the last few years. No more
counselors - just use the online tools! And they're mostly about getting
federal financial aid. Placement consists mostly of 'apprentice' positions
which means a vanload of students running the back end of a restaurant
somewhere all summer and sharing an apartment meant for 2.

Strangely they don't advertise at all - at least in the media I see. While I
saw IIT ads all the time. And they target the same demographic.

~~~
kajjffkk
>No more counselors - just use the online tools!

N=1 here, but I got no apparent utility from the existence of counselors in
high school or college.

In retrospect they handled some registering paperwork for me, but they also
planned my coursework for me as if I were the median student. In high school I
had to press the counselor to let me take more AP courses than she thought was
wise.

In college, it was more of a rubber stamp thing, where the counselor just
approved my choices because they lined up with degree requirements.

Other than officially validating that my classes met the degree requirements,
there was no value add. I'm glad to see someone at the helm realized a
computer can do that just as well or better.

~~~
tnecniv
My high school counselors were actually reasonably helpful, mostly when it
came to college advising stuff. I went to a small private HS though, and they
knew everyone by the time you were a senior.

I had the same experience in college though. Heck, I'm an MSE student now and
I don't even have an advisor because the one they assigned me left and I
haven't been bothered to get a new one.

~~~
thaumasiotes
My high school counselor was incredibly useless, and quite possibly harmful. I
also went to a small private high school (~30 students per grade level).

Her only focus, as far as I can tell, was to make sure we could be admitted to
a UC. She spoke to us in 10th grade, letting us know that we needed to take
three SAT II subject tests, and that two of them should be writing and math,
while the third should be whatever we thought we'd get a high score in. She
also stated that on no account should we schedule all three tests for the same
day, because too much testing wears you out and your performance suffers.

I could tell that last bit was nonsense, but I believed the earlier advice and
took the math, writing, and latin tests. The counselor bore a grudge against
me from then on for ignoring her advice but still getting high scores. Come
senior year, I learned that good schools usually required a science SAT II.
Whoops.

I had almost no interaction with the school counselor besides the speech she
gave to the 10th grade. I heard through the grapevine how upset she was that
I'd flouted her non-individualized advice.

I had no "counselor" or similar role in college. The CS degree required a CS
professor to sign off on my "plan", but that entire process consisted of me
going to a professor in my final year, saying "I want to declare a CS major;
here is my plan, all of the classes except that one are already complete", and
getting a pro forma signature.

------
joedissmeyer
I am personaly happy to see the hammer come down on these for-profit
universities. I too feel for the students as I was one of the Corinthian
Colleges students a few years ago at Everest University through one of the
Florida campuses. My degree program was the A.S. in Computer Information
Sciences -- such a waste. Look up the job placement rates for that program in
2010, just insane.

Thankfully I too have been able to take advantage of the Department of
Education relief. But I have to go through the process of the “borrower
defense to repayment”. It continues to be a tough process but at least it some
form of relief for me.

I hope former ITT students are able to find a quick resoluton. This type of
school shutdown is not easy on anyone.

 __On another note, I wonder if this is the start of the 'higher-ed debt
bubble' that has been predicted for quite some time now...

~~~
ams6110
Easy student loans for worthless education is what created the problem of sham
for-profit universities to begin with.

~~~
dragonwriter
Yes, and the reason that there were easy student loans _for worthless
education_ is because of laxity in the accreditation system on which reliance
is placed to assure that education is not worthless, and because of a
historical lack of accountability for frauds on the part of certain
(particularly for-profit, who have the strongest incentive for fraud)
institutions.

The recent issues at Corinthian and ITT (including the fraud lawsuits against
both and the DOE pressure on accreditors, as well as the ultimately DOE action
after the fraud lawsuits and accreditation issues at ITT) are a direct result
of efforts to end "easy student loans _for worthless education_."

~~~
bduerst
Who were they accredited by and for how long?

~~~
yuhong
I believe the most common is ACICS. The fact that more attention was paid to
it after Corinthian Colleges was how the process that led to this shutdown
started in the first place.

------
mikestew
I'll preface this with my lack of any love for ITT, but there's a piece of the
story that bothers me: _" Last month, the feds demanded the company produce an
additional $153 million in collateral—nearly double its $78 million in cash on
hand—to cover possible losses that the government might incur if the company
were to suddenly fail."_

Here's how that sounds to me: "Well, ITT technically hasn't done anything
illegal. But we don't like them. How much cash do they have? Double that
amount and tell them we need this much for 'collateral' or we shut them down."

Can anyone fill in the blanks that Bloomberg didn't? What basis does the
government have to make such demands (as it appears to me) out of the blue?
Why make such demands knowing going into it that it will become a self-
fulfilling prophecy? (That last question is kind of rhetorical.)

~~~
dragonwriter
> "Well, ITT technically hasn't done anything illegal. [...]"

The DOE action is based on a risk of business failure produced by fraud
lawsuits by the SEC (for securities fraud) and CFPB (for consumer fraud)
against ITT, both directly and because the costs and potential fundamental
issues with ITTs then-existing business model revealed by those lawsuits also
led to the risk of losing the accreditation from its accreditor.

(Incidentally, that's an accreditor whose notorious laxness in enforcing
standards on private universities has led to the recommendation that _it_ be
no longer accepted as an accreditor by the Department of Education, a
recommendation which may result in action this month removing it _as_ an
accreditor.)

~~~
mikestew
_The DOE action is based on a risk of business failure produced by fraud
lawsuits by the SEC (for securities fraud) and CFPB (for consumer fraud)
against ITT_

Ah, thanks, that clears it up for me.

------
aerhakr
My wife had worked as a temporary at ITT here in Calfornia. It was the most
degrading work I have ever seen. She was teaching English courses, and 98% of
the kids plagiarized, not even trying to cover it up. When she gave failing
grades to the papers, the students fought back and the director at her
location told her she can't do that. She quit that week.

------
kayla210
I really feel for all the students who are so close to graduating and not
knowing if they'll have anything to show for it.. And their credits will most
likely not transfer to another school because of the different accreditations.

~~~
tptacek
That their credits had virtually no chance of transferring to any other
institution --- a point ITT was forced to make on its own website --- is a
pretty good reason not to allow it to be the beneficiary of billions of
dollars of public financing.

~~~
dccoolgai
That's true - and as a taxpayer, I don't relish the idea of funding things
like this that are taking advantage of people... but I have to admit I feel a
little icky at the thought of pulling something that might act as a ladder of
economic mobility - even for just a few people - out from under them. It's
like we're saying to people that don't fit into the "traditional" mold of
college-goer: "You can't go to ITT any more"... OK, but what _do_ they take on
to better their station now? I just can't think of a great anwser to that,
other than bloviating about theories of "post-scarcity" that do nothing to
help these people and it makes me feel bad.

~~~
tptacek
ITT was anything but a ladder of economic mobility. It _preyed_ on those
people who most needed that mobility. The institutions you're squeamish about
harming are community colleges, which have much cheaper tuitions and actually
do educate students.

~~~
pauldix
Yep, community colleges are where it's at. I started at a small local college
a half-step up from a community college as it offered 4 year degrees. Got a
year's worth of credits there to establish a good record and then transferred
out to an ivy.

My brother got his 4 year degree from the same college, moved onto a master's
at a bigger school and is doing quite well.

~~~
tptacek
The problem with for-profit schools like ITT and Phoenix is clearer when you
see those companies as a sustained effort to profit by delegitimizing
community college.

~~~
dionidium
By positioning themselves as the no-nonsense-career-training, direct-path-to-
a-job alternative? Is that what you mean?

~~~
dccoolgai
I think that is maybe where my uncomfortable feeling comes from: community
college seems like an "extension" of the grand idea of higher education (which
is awesome for people that want that!)- become a more well-rounded person,
read the classics, learn history and art appreciation, etc. etc. - it's what I
did, and I enjoyed it... but I know I'm not everyone. I grew up in a very poor
place where it might just serve people better to "learn the things you need to
know to pass for XYZ 9-5 job" and from what I read ITT (sort of) fit the bill.
I worry that we're saying "You can't do that - you have to go try and be a
well-rounded renaissance man/woman"... now I know that with federal money,
maybe we have the right to say it, but still...

~~~
dragonwriter
Community colleges (at least the one's I've seen) tend to have both
traditional academic programs intended to fill the lower division of a
classical four-year college program _and_ vocational programs leading to a
two-year degree or vocational certificate (or where you might just take a few
ad hoc classes for career advancement without enrolling in any kind of
certificate/degree program.)

The idea that the ITTs of the world are more effective for vocational
education than Community Colleges is a product of the massive marketing
campaigns of ITT-style for-profit institutions more than any reality, as far
as I can tell,

------
tzs
For IT degrees (bachelor and master) for those who cannot go to a "normal"
college for four years, an option to consider is the online non-profit Western
Governor's University [1]. It is especially interesting if you already know
much of the material through work or self-study.

It was founded by several state governors about 20 years ago, and is
accredited by The Northwest Commission on Colleges and Universities.

It's pricing is interesting: $2890 per six-month term, regardless of how many
classes you take or credits you earn during that term. If you want to take a
heavy load to earn the degree faster and save money, you can.

Each degree program has a particular list of skills that you have to
demonstrate competency in to earn the degree. They offer, of course, all the
necessary classes to learn those skills, but you are not required to take
those classes--you are just required to demonstrate the skills. If you have
already acquired some of these skills elsewhere, you can take the test or do
the project that demonstrates it and that will count toward the degree.

For most of the IT degrees you also earn several widely recognized third-party
IT certifications, at no extra cost. For example the IT bachelor's program in
network administration includes these certifications: MSCA Windows Server,
CompTIA Linux+, CompTIA A+, CompTIA Network+, CompTIA Security+, and CompTIA
Project+.

(The offer more than IT, BTW. The also have bachelor and master programs in
teaching, business, and health).

[1]
[https://en.wikipedia.org/wiki/Western_Governors_University](https://en.wikipedia.org/wiki/Western_Governors_University)

------
paulddraper
This is an instructive lesson.

"Free education" they say. "It will solve problems" they say. "Education will
be better" they say.

No, it won't. Free education -- or subsidized loans -- puts a disconnect
between education and its cost.

If the person paying is not the person deciding, a poor decision will be made.
It's just like how HSAs prompt people to think about what they're spending
their money on.

ITT would not exist but for government spending. Sure, some will beat the dead
horse of more regulation. But the real answer is STOP SUBSIDIZING. Stop
subsidizing education, stop subsidizing mortgages, stop subsidizing GM, stop
blowing decisions sideways by removing the universal language of cost from the
discussion.

~~~
themartorana
Stop subsidizing education? Do you propose this for just higher education? Or
is it all education you'd like taxpayers to stop paying for?

Unsubsidized education either a) means more private loans somehow now exempt
from bankruptcy proceedings or b) education is now only for those that can
afford it.

I am the complete and total opposite of your position. How it is that we
provide 12-14 years of education for free, but then burden the economy with an
insane amount of unsecured debt for the last four is insanity. It places our
economy at risk, it severely stunts upward mobility, it burdens our youngest
minds with mortgage-sized debts, and it sinks people into a lifetime of debt.

If college is, in general, required to actively participate in our society, it
should be paid for the same as (Pre)K-12.

Edit: I'd like to say that I agree that subsidizing activity as a direct pass
through of money from government to for-profit enterprise is a bad idea. Don't
subsidize for-profit colleges. But they were never needed to begin with.

~~~
paulddraper
The average college grad makes something like a million dollars more over his
lifetime than a non-college grad. If that last 4 years cost the most, I can
see why.

Anyway, option B. Having a restaurant is only for those who can afford it.
Owning a house is only for those who can afford it. Starting a start-up is
only for those who can afford it.

Fortunately, we have a system that allows people to pay each of those costs
over a period of time (in some cases, even over a lifetime, as you pointed
out).

Maybe your restaurant goes under, or your house goes underwater, or your
skills aren't valuable, or (however unlikely) your start-up fails. I don't
know what to tell you. Reality's a bitch. Hopefully your research and efforts
are enough for you to make the right decisions.

It's quite possible for a $20k education to produce a $1 million payoff. In
that case, anyone can afford it. It's also possible for a $150k education to
produce a $90k payoff. In that case, few can afford it

I'm not going to tell you what to do, pay for it, or take your earnings. You
alone can make those decisions.

------
clarkmoody
It looks like the main problem in this whole scheme is the government-funded
student loan program. ITT was wrangling to get access that that loan money as
a key to its operations. Failing to comply with the Dept of Ed's requirements
caused them to go out of business, since they would no longer have a place at
the public trough.

How many state schools and private colleges could survive without government
largess? We've seen a massive increase in tuition costs, far beyond inflation
in recent years. Such is the result of artificially boosting demand for
college on the backs of the taxpayer.

As for forgiving ITT student loans, I say no. Students are responsible for
their own loans and (bad) decisions. By that reasoning, shouldn't we just
forgive all student debt for anyone who didn't get their dream job straight
out of undergrad? What about those who don't finish school but still have
loans? For everyone but the far left, these ideas are ludicrous. Let's not
make the taxpayer suffer twice for the poor decisions of others.

~~~
HarryHirsch
_How many state schools and private colleges could survive without government
largess?_

The reason we have seen tuition rates go up at public schools is precisely
because their share of taxpayer funding has been cut, they have to make up for
the missing funds somehow. You'd wish they would rely _less_ on tuition
because then we could do without useless taught masters degrees and with less
shiny amenities designed to compete for the tuition income.

Nowadays you see _community colleges_ building dormitories! Neither the
student body nor the taxpayer needs that kind of expense so the place can
attract students from three counties away.

~~~
mhurron
> Neither the student body nor the taxpayer needs that kind of expense so the
> place can attract students from three counties away.

And if the county their from doesn't have a community college, or the
community college in their county doesn't offer the programs they want?

~~~
HarryHirsch
Students can do as they always have done, rent a room somewhere nearby if they
want to attend college X.

But if the local, not-famous C.C. just opened a set of dormitories while its
offerings stay the same as in previous years it's clear that they are trying
to cannibalize from the student body in the next few counties. And at the end
of the day, it's only the building contractor that benefits.

------
peterhadlaw
As an alum of IIT (Chicago)... This is extra, great news.

~~~
jcranmer
IIT (Illinois Institute of Technology) or ITT (Technical Institutes)?

~~~
abrowne
I think they are implying that now people won't think of ITT when they say
they're an alum of IIT.

------
brightsize
Related: "The Law School Scam. For-profit law schools are a capitalist dream
of privatized profits and socialized losses. But for their debt-saddled, no-
job-prospect graduates, they can be a nightmare."
[http://www.theatlantic.com/magazine/archive/2014/09/the-
law-...](http://www.theatlantic.com/magazine/archive/2014/09/the-law-school-
scam/375069/)

------
tickthokk
As a 2005 graduate of ITT, I'm glad. This was a long time coming. Now if only
I could get my loans refunded :p

~~~
jacquesm
From TFA: "Other former students are pushing to have their debts canceled by
alleging that the company defrauded them into taking out the debt by
advertising false job-placement rates."

So it looks like you might have a chance.

~~~
ianai
That seems like something you couldn't sue over and win. At this point the
beef exists between student and financer.

------
jrs235
What enabled this greed scheme to work? Government guaranteed loans. The
schools and institutions need to have some of their own skin in the game.

~~~
ams6110
The students too. If they are spending their own money they will (at least be
more likely to) care more about what they are spending it on.

~~~
azemetre
How are students able to determine if the education they are paying for is
valid or not? How are students that are in at-risk populations able to
differentiate between valid accredited solutions and predatory schemes?

It's very easy to take advantage of certain people. I'm glad the government is
doing its job protecting people from unfair practices.

If information asymmetry wasn't so exceedingly common maybe we wouldn't have
to deal with consumers making poor mistakes because they "should have known
better."

~~~
jrs235
The government "freely" giving people money to spend on questionable goods and
services doesn't help or protect the vulnerable people. The government
"failed" first, the for-profits ripped people off, now the government is
"saving" the vulnerable people that they allowed to get into the crappy
situation by allowing them to accrue loads of debt to start with.

------
at-fates-hands
I live in Minneapolis and the City Pages did quite an exposé on them back in
2015. It was pretty eye opening and gives a really good glimpse into their
tactics:

[http://www.citypages.com/news/itt-tech-sells-an-american-
dre...](http://www.citypages.com/news/itt-tech-sells-an-american-dream-of-
broken-lives-and-financial-ruin-7463804)

------
dbg31415
What disgusts me most about the for-profit schools -- not to come off as too
much of a snob -- is that the money we the taxpayers put into their pockets
would be better spent improving community colleges and state schools.

I get not everyone needs to go to an Ivy League school, but for vocational
basics -- what people are going to these for-profit schools hoping to gain --
community college should be "good enough."

I'd look at Bellevue Community College as a great example of a strong
vocational tech school. That should be a model others could strive for. When I
was younger I learned a great deal in BCC classes -- knowledge that was
immediately beneficial to my day job as a software developer.

In contrast, the classes at BCC were far more hands-on training than what I
got at the school I eventually graduated from. Educationally, community
college I feel was better... but certainly for connections and networking the
"name-brand" schools pay off.

~~~
ianai
I agree. People going to ITT should view a community college as a more than
fair replacement. Further, anytime you introduce profit you introduce cost
reduction and "keeping something back" from what the customer paid. i.e. In
order to make profit they must be giving you a product that's worth less than
you paid to them. That's wasteful.

------
ramblenode
> Students now enrolled at the company's technical schools will be able to
> cancel any federal student debt they incurred for their education if they
> decide against transferring their credits elsewhere... Taxpayers will record
> a loss on those debt cancellations.

This seems very unfair to taxpayers, who are essentially forced creditors. If
the college reneges on its contract with students, then the students should
seek to reclaim their losses through a class action lawsuit against ITT. The
government shouldn't be covering losses on what were, arguably, bad
investments.

~~~
ben_jones
If you wanted to you could also point out that we're forced creditors on the
trillion dollar F-35 program... doesn't get us very far.

------
spudlyo
Have you ever worked with anything ... High tech?

[https://www.youtube.com/watch?v=l31I9RvluEA](https://www.youtube.com/watch?v=l31I9RvluEA)

I asked that once during an interview, and was met with blank stares. Haven't
asked it since, but I feel like it could have been hilarious.

------
koolba
Question for lawyers in the audience: If ITT is shut down because the
"education" it was providing was complete shit and not recognized anywhere
else, does that mean that the usual rules about education related personal
debt surviving bankruptcy wouldn't apply?

~~~
tamana
There are various ways to get loan forgiveness for these loans, for reasons as
you suggest, before the bankruptcy question. But pity the fool who paid off
their loan and is now bankrupt.

~~~
koolba
> But pity the fool who paid off their loan and is now bankrupt.

Sadly that's becoming more and more common a trend in this country. It's the
same as all the poor chaps who kept trying to pay their underwater mortgages
while they're neighbors squatted for free.

Honest Joe seems to never catch a break :(

------
Unbeliever69
Unfortunately, ITT is just the visible tip of the iceberg. There are MANY more
for-profit schools of the same ilk as ITT that will fleece the same archetype
of education-seeker. This isn't over by a long-shot. These schools are
everywhere and they are probably chomping-at-the-bit to get their mits on
displaced ITT students and all others that are susceptible to the type of
manipulative and deceptive marketing practices that ITT, and many other for-
profit schools, use.

~~~
rhino369
It's not just for profit schools. There are a ton of private non-profit
schools that operate the same scam. Instead of paying off shareholders, they
operate to keep the organization going for all the people who make their
living off it. Even many public schools run programs that are scams or just
deliver such a terrible education that they aren't worth operating.

------
JoeAltmaier
Next, go after the public colleges? Other than brand, do they do a better job?
Spend more than 30% of income on actual educational expenses (like IIT does)?
I doubt it.

{edit} Seems like US Universities are about 1:1 faculty vs staff. Up from 2:1
40 years ago.

~~~
GFK_of_xmaspast
How about 'fully funding public colleges' instead so that kids don't have to
go into crippling debt to go there.

~~~
logfromblammo
Judging by history, this would be seen as a license to artificially inflate
costs, such that the university system would become a machine for extracting
money from the public treasury and placing it into private hands.

You _must_ have some feedback control, wherein the amount of public funding is
dependent upon some objective criterion that measures the extent to which the
public college provides a useful service to the public.

For instance, give the college a percentage (that decays exponentially) of the
income taxes collected from their alumni. Schools that focus on teaching the
knowledge and skills that actually make students employable would then be able
to more freely provide tuition discounts to students, expecting that the
recurring revenue stream after graduation would make up for the lesser amount
collected up front.

They all hound their alumni for money all the time, anyway.

~~~
GFK_of_xmaspast
Judging from history, cheap colleges in the post-war decades worked just fine
for the boomers.

~~~
ccallebs
There were fewer students, fewer colleges, and lower enrollment rates. A big
reason why college costs have risen is due to the artificial demand created by
subsidized loans.

~~~
logfromblammo
Just as a gas will expand to fill its containing vessel, costs tend to grow to
meet the available budget.

If 100% of the university operating budget for student instruction is
guaranteed by the state, you might be surprised at how often the seats in the
lecture halls _need_ to be replaced. Rather than being reupholstered after 10
and 15 years, and replaced after 20, they are replaced every 5 years. The
profitable business moves from instruction to _instruction support services_.

Maybe the dean is part owner of a company that specializes in lecture hall
seat installation, or in a landscaping company so large it can only handle
entire zoos, universities, and corporate office parks.

Money without a vigilant guardian eventually gets taken. This is why pouring
more stupid government money into _anything_ should be done with extreme
caution, because it often invites corruption, in order to get a space at the
trough.

College costs have risen _because they could rise_. The subsidized loans don't
empower the students; they just enrich those with the power to capture the
subsidy. The money would have been far better spent on building out new
universities, or increasing the student instruction capacity of existing
universities. That would have driven down student costs--rather than ensuring
that any rising costs could always be paid by debt--and the stupid government
money would have been flowing to those younger academics who are now
perpetually wandering in tenureless adjunctland.

~~~
GFK_of_xmaspast
> Money without a vigilant guardian

This is called the "board of regents" and "the state legislature."

------
arikrak
Instead of the government trying to protect their loans and end up doing the
opposite, maybe the government shouldn't be in the business of lending money
to individuals? Government + lending + a supposed social benefit = disaster.
First it was with helping people own homes, and now it's with helping people
go to college. It sounds nice, but by lending money the government can just
hide the true cost of what their doing. (Meanwhile government loans for
housing have gotten worse:
[http://www.economist.com/news/leaders/21705317-americas-
hous...](http://www.economist.com/news/leaders/21705317-americas-housing-
system-was-centre-last-crisis-it-has-still-not-been-properly))

------
dccoolgai
"It will now likely rest on other parties to understand these reprehensible
actions and to take action to attempt to prevent this from happening again."

Indeed.

------
chris_wot
So to mitigate the possible effects of the colleges all suddenly shutting down
they were told to put up a huge amount of collateral, which caused them to all
suddenly shut down?

That's quite a mitigation strategy the government has going on there.

~~~
keithwhor
Reading between the lines: that was likely the intention all along. Better to
deflate the bubble now than let it get any bigger.

------
WheelsAtLarge
Yes ITT was a money grabbing parasite and I'm glad they are gone. But the
glamorous 4 years schools aren't as great as they set themselves to be.

Many students come out of the great schools owing thousands and having a very
hard time getting a job.

This is not new. The fact is that universities weren't created for job
training. Their job was to expand your knowledge. That's why you can get a
degree in Greek mythology or Latin or whatever.

It was really a way for rich people to spend their time in something
constructive. Somewhere the idea of a university and job training came
together but universities aren't very good at job training so that's the big
problem. We as a society don't have a great way to train the massed for
society's jobs.

Community college focus on getting you to a four year college but they need to
do a better job at job training.

For profit schools have tried but they focus on profits and lose sight of the
students.

We blame the institutions but students also need to take responsibility. If
you can't take the time learn don't expect to get a job where someone needs to
have a productive employee to keep the business going.

Also the K-12 schools need to do something to fix the problem. How is it that
a student goes through 13 years of school and not learn to be a productive
employee? That the real shame.Yet we put the blame elsewhere.

Politicians love to argue the effects of same sex bathrooms but they aren't
willing to take on why schools are failing society.

We need to fix that.

------
JulianMorrison
Every student's loans to these slimy operators should be simply struck off
with no penalty.

~~~
qaq
Why should avg. taxpayer take on this burden?

~~~
slfnflctd
Better question: Why shouldn't they?

These are almost all going to be, by definition, disadvantaged people who have
been lied to and defrauded. Yes, they 'chose' to do this, but the staggering
amount of misleading advertising (and the worst kinds of sleazy-salesman lies
& emotional manipulation of the vulnerable) leaves plenty of doubt as to how
much of a choice they had.

I see very little difference between helping these people and helping storm
victims. Nearly all for-profit education (that made a profit, anyway) is an
ugly disaster and should never have been allowed to go on so long. The
government actually did something right here for once.

~~~
douche
If you're going that route, strip every asset ITT owns, auction it off, and
distribute the proceeds to students.

~~~
JoeAltmaier
Which amounts to some rented buildings, some tables and chairs, and ...

~~~
sqeaky
That and seek damage from the people who orchestrated the defrauding. This was
a "for profit" institution, follow the profit to the CEO and others.

------
KevinEldon
Stop federally funding education. In the US we have 50 different opportunities
to learn about how to create the best education system: all of these systems
could learn from each other. When we allow federal funding of education we get
much less diversity and innovation; we promote a mono-culture.

------
walrus01
The entire concept of a corporate death penalty (in this case enforced by ITT
no longer being eligible for federal student loans) is something that is not
implemented nearly as frequently as it should be.

------
xenadu02
Federal student loans shouldn't be available to any non-accredited
institution. If your credit hours won't transfer then it isn't a real College
or University.

~~~
dragonwriter
> Federal student loans shouldn't be available to any non-accredited
> institution.

ITT was accredited by an accreditor recognized by the government (though,
among their many other problems, that accreditor has, this year, been formally
recommended to be removed from that list of recognized accreditors; and even
if they weren't removed, they had notified ITT that ITT's accreditation was in
jeopardy -- that jeopardy was, in fact, the main direct basis of the recent
DOE actions against ITT [the other direct basis is the risk associated with
the fraud lawsuits against ITT, which are also the basis for the accreditation
risk].)

> If your credit hours won't transfer then it isn't a real College or
> University.

Transferrability is a different issue than accreditation, and often differs
strongly from receiving school to receiving school.

~~~
johnward
> Transferability is a different issue than accreditation, and often differs
> strongly from receiving school to receiving school.

Yes but basically no regionally accredited school is taking nationally
accredited credits. There is no way to transfer to a "legitimate school" in
that case.

~~~
dragonwriter
> Yes but basically no regionally accredited school is taking nationally
> accredited credits.

Plenty of regionally accredited schools don't take regionally accredited
credits (even from the same accreditor), either. Common accreditation doesn't
imply transferability.

------
Geekette
Too little, too late; ITT and a whole legion of similar schools should have
been erased long ago, given glaring evidence of their mismanagment, often
misleading/fraudulent advertising, almost no value delivered (e.g. dismal grad
job stats), waste of public money, etc. The pressing question is how long
before ITT re-opens under a new name; I highly doubt it'll just go away.

------
sytelus
There is a startup opportunity here. It actually shouldn't take a lot of
resources for this kind of technical education. Get a community hall, few
experienced volunteers and have them teach skills for free to anyone who is
interested. Students just promise to pay portion of their income if and when
they get job. A startup gets little cut for coordinating whole thing.

~~~
coev
I believe a lot of hacker schools do exactly this

------
peter303
Will coding academies go down the same route as for profit colleges? Right now
they are the darling of politicians who think they could solve the country's
unemployment and tech shortage problems. But once your put Wall Street in
charge and scale them up handle large numbers of students, I wonder if they
will become the next ITT.

------
emeraldd
That's less than two weeks from when the Title IV "death penalty" (Assuming I
have my titles right, it's been a while) was assessed.
([https://news.ycombinator.com/item?id=12361737](https://news.ycombinator.com/item?id=12361737)
)

------
Eric_WVGG
bad news for late night cable ad revenue

------
coredog64
Fingers crossed that UoP is next...

------
zomg
people are so quick to make this a "for-profit" college issue, when it's not.

they shut down because the u.s. department of education banned them from
enrolling new students who use federal financial aid.

what do you think would happen to "not for-profit" colleges if the u.s.
department of education did the same to them? i'd argue it's the "not for-
profit" schools who are driving tuition prices up because the government won't
stop loaning money to anyone with a pulse.

dry up that loan money and watch prices fall from the sky.

------
__pid_t
How's Devry? I worked with a person that got a degree from there. It's for-
profit too. I can't imagine it's any better than ITT with it's vendor lock in.

------
tomohawk
They should have spent the $18 million.

[https://www.washingtonpost.com/politics/inside-bill-
clintons...](https://www.washingtonpost.com/politics/inside-bill-clintons-
nearly-18-million-job-as-honorary-chancellor-of-a-for-profit-
college/2016/09/05/8496db42-655b-11e6-be4e-23fc4d4d12b4_story.html)

EDIT: Not sure what the downvotes are for. ITT gets shutdown, but Laureate
does the same thing, but even more so and gets a pass. The only difference
appears to be these kinds of payoffs to politicos.

------
gigatexal
Yes! What a shameful institution.

------
ryanlm
Not being able to transfer credits seems to be a good example of Vendor Lock-
In.

------
colindean
I was an IT instructor at one for two quarters in the late 2000s. AMAA.

------
matchagaucho
It's one thing for a school to recruit students that aren't prepared for the
curriculum, and subsequent debt.

But it's quite another problem if the school loses their accreditation and is
unable to deliver a quality education.

------
whorleater
Thank god. Next on the menu: University of Phoenix please.

------
rufius
Good.

------
jhylau
thank god

------
loco5niner
Good.

