The Death of ITT Tech

[Isgrimnur]

LA Times

The for-profit college chain ITT Educational Services Inc. is shutting down its schools nationwide, shortly after the U.S. Department of Education banned it from enrolling new students who use federal financial aid.

ITT said Tuesday that it has canceled the academic quarter that was supposed to begin this month and laid off most of its 8,000 employees.
...
Last month, in addition to the ban on enrolling new students who used federal aid, the U.S. Education Department also prohibited ITT from awarding its executives any pay raises or bonuses and said it must develop “teach-out” plans that would help current students finish their programs at other colleges if the chain shuts down. Current students, it said, could continue receiving federal grants and loans.

Education Secretary John King said the government was taking action to protect students and taxpayers following “troubling” findings about the company. Earlier in the month, a group that accredits ITT found that the chain failed to meet several basic standards and was unlikely to comply in the future.

ITT blasted the federal moves. “We believe the government's action was inappropriate and unconstitutional,” the company said Tuesday. “We were not provided with a hearing or an appeal. Alternatives that we strongly believe would have better served students, employees and taxpayers were rejected. The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable.”

The day after the Education Department’s decision, California imposed further restrictions on the company: Citing concerns about ITT’s financial viability, the state Department of Consumer Affairs’ Bureau for Private Postsecondary Education issued an emergency decision banning ITT from accepting new students at its 15 California locations. The state also planned to seek to revoke ITT’s approval to operate in California.

[GreenGoo]

Yay.

How's Drumpf's "university" doing?

[Isgrimnur]

How's Drumpf's "university" doing?

Dead since 2010.

[malchior]

ITT blasted the federal moves. “We believe the government's action was inappropriate and unconstitutional,” the company said Tuesday. “We were not provided with a hearing or an appeal. Alternatives that we strongly believe would have better served students, employees and taxpayers were rejected. The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable.”

I love the bluster. This is why accreditation is taken seriously by every (non-diploma mill) institution jackasses. Good riddance - they were robbing their students.

[Moliere]

Good riddance - they were robbing their students.

Most colleges are robbing their students with bullshit worthless degrees even if they do have accreditation.

[Smoove_B]

Most colleges are robbing their students with bullshit worthless degrees even if they do have accreditation.

Is the problem the bullshit worthless degrees or that students are able to take out absurd loans to earn bullshit worthless degrees? If a bank won't allow me to borrow $500,000 to purchase a one bedroom shack with no plumbing, why should a lending agency hand out money for all types of higher education?

Full disclosure: I'm gainfully employed by an accredited higher education entity.

[malchior]

Maybe some but fwiw - the unemployment rate for someone with a BS/BA is 3% versus 5% for HS diploma. And I'd also expect mean/median salary is higher in the BS/BA population as well.

[Isgrimnur]

Maybe some but fwiw - the unemployment rate for someone with a BS/BA is 3% versus 5% for HS diploma. And I'd also expect mean/median salary is higher in the BS/BA population as well.

Thanks for the reminder.

[Moliere]

Most colleges are robbing their students with bullshit worthless degrees even if they do have accreditation.

Is the problem the bullshit worthless degrees or that students are able to take out absurd loans to earn bullshit worthless degrees? If a bank won't allow me to borrow $500,000 to purchase a one bedroom shack with no plumbing, why should a lending agency hand out money for all types of higher education?

Full disclosure: I'm gainfully employed by an accredited higher education entity.

Yes, they are getting 6 figure loans with no collateral other than a worthless degree. With headlines like "More Than 40% of Student Borrowers Aren’t Making Payments" can the collapse/bailout be far behind?

[Smoove_B]

I cannot help but think the lending agencies are using models from 30+ years ago that demonstrated a clear benefit to earning a college degree - it was a good return on their investment. Not surprisingly, institutions figured out they could offer less rigorous degree programs and get more students (and money) in the door. It's not unlike what happened with the health insurance industry in the 1960s and 70s -- government money being injected into the system to balance out our national health care programs (and to encourage that everyone receive medical care) ultimately inflated the prices we all pay for services through insurance. In the same way, government loans backing students getting a BS degree flooded the market.

One of my roommates from college is about to turn 42 and he *just* paid off his college loans. He did defer them for a while, but that's ridiculous and he's been kicking himself for over a decade now because of it.

I do think accreditation is a step in the right direction and certainly putting the screws to for-profit institutions will help. But I can tell you after seeing it now for 8 years, there are going to be waves and waves of age ranges saddled with absolutely absurd debt for the next 20 years. Debt that will stop them from changing jobs, buying homes or possibly even having children. I don't think we've fully begun to see what's going to happen. The inevitable implosion of higher education is just the beginning.

[malchior]

I agree to an extent but talking about "worthless degrees" or "blaming" higher ed or for-profits only looks at a part of the picture. There are huge changes occurring out in the real economy that aren't anything like what we've experienced in the past. Unemployment is crazy low - consistently- but wages aren't moving. 3% unemployment in BS/BA land and entry-level wage growth is awful. Sure those are slightly old stats but I don't think they've changed much; it appears that supply/demand is looking fairly broken for employment. And some would argue broken for a couple of decades (and some claim back to Reagan) now. Maybe that is skills mismatch i.e. the wrong degree being earned. Maybe not. It has lead to really interesting trends like millennials not forming households and the fertility rate falling. Here is a story about how that has lead to school enrollments to start to shrink in Suburban NJ as millennials delay starting families and move into urban areas. Crazy times.

[nasai]

Good riddance - they were robbing their students.

Most colleges are robbing their students with bullshit worthless degrees even if they do have accreditation.

So true.

[Isgrimnur]

My student loans haven't been significantly dented. Deferment due to low wages into my 30s, and the fact that, at <4%, it's among the lowest rate on debt that I have, it makes no sense to prioritize that over other payoff priorities. Heck, I may defer them longer if I go in for my master's at my company's expense.

CNN, Jan 2016

Unemployment for young college grads -- ages 22 to 27 -- fell to 4.9% by September, just below the current national average of 5%, according to a report published Friday by the Federal Reserve Bank of New York.

These Millennials are also getting paid more: median incomes for recent graduates rose to $43,000 in 2015, up from about $40,000 in the prior year. Compare that to the wages of the same age group who only have a high school diploma -- their wages have fallen in recent years, now at $25,000 a year.
...
But when you parse out the data by a graduate's college major, results vary -- a LOT.

Young graduates who studied chemical engineering are snagging the best paying jobs: $70,000 a year, while those who studied religion and theology got jobs that paid $28,600 a year, the lowest.

Graduates who majored in agriculture, construction or nursing are dominating the job market. Their unemployment rates are 2% or lower -- less than half the national average of 5%. Recent grads with nursing degrees make about $48,000 a year.

Fine arts graduates struggle a lot -- Their starting salaries are on the lower side of the spectrum of new graduates: $29,000 a year, 7.6% are without a job and 62.3% end up taking lower paying jobs that don't require a college degree.

Philosophy majors didn't fare too badly. Only 5% couldn't find jobs and recent grads earned $35,000 a year.
...
For new liberal arts graduates overall, the unemployment rate is 5.8% and the median wage is $32,000 a year.
...
In fact, underemployment has been falling for the past two years. About 44.1% of recent college grads are underemployed, according to the New York Fed.

That may sound high, but it's not unusual. The underemployment rate was even higher in 2004 (44.6%) and in 1992 (47.7%). Right before the 2001 recession, underemployment fell into the high 30s but quickly climbed back up.

It's important to note that underemployment doesn't always mean a bad job.

About 36% of young college grads are in jobs that don't require a college degree but make over $45,000 a year -- above the median wage for all new grads.

[GreenGoo]

Good riddance - they were robbing their students.

Most colleges are robbing their students with bullshit worthless degrees even if they do have accreditation.

The difference is that accredited schools provide accredited degrees. You (should) know what you're getting, and how it compares to a similar degree elsewhere.

Whether those degrees are worth anything is a completely different question and can be subjective depending on the expectations of the student.

The idea that institutions of higher education are just worker mills or that ROI is the only way to assign worth is a false one.

[Smoove_B]

Maybe that is skills mismatch i.e. the wrong degree being earned. Maybe not. It has lead to really interesting trends like millennials not forming households and the fertility rate falling.

The big thing I'm seeing now is a push for 5 year mixed undergrad/masters level programs. Essentially, you earn a BA/BS and some type of Masters by doing extra work in your 4th year and then finishing a year later. There are 23 year olds that haven't worked a day in their life graduating with an MBA. Who hires them? How are they even going to begin to pay down a $120,000+ loan when on paper they're overqualified and have zero experience? It makes no sense at all. I've lost track of the number of students I've talked to where their backup plan is to go to graduate school. Like...if I can't get a job after graduation, I'll just start a masters degree the next semester and figure it out from there.

Here is a story about how that has lead to school enrollments to start to shrink in Suburban NJ as millennials delay starting families and move into urban areas. Crazy times.

That's a great piece and supports what I've anecdotally seen. Our rural NJ community is shrinking but the school just hired a whole bunch of new teachers and administrative staff. I predict there's going to be some pain in the next ~5 years - either taxes are going up (to pay for bloat) or schools are going to consolidate.

We're definitely in for a reckoning. I don't know about other parts of the United States, but I'm confident the greater NY/NJ/PA metro areas is going to get real interesting in the next decade.

[disarm]

I finished medical school in 2005 with $190k in loan debt, of which only about $11k came from my undergraduate degree. Luckily, I graduated at time when student loan interest rates were at almost record lows, so my monthly payment after consolidation is only about $750/month for 30 years. My interest rate is locked in at 1.625% for the full term of repayment, so I'm in a situation where it really doesn't benefit for me to pay my loans off early. I can pretty easily invest that money in ways that will net me a larger gain than what I'm losing on loan interest.

I know a lot of people graduating more recently that aren't that lucky though. I went to a state medical school, but others going to more expensive schools have graduated with a lot more debt and a much higher interest rate. Most medical students are now facing careers with rapidly decreasing pay, increasing debt, and a late start to earning a living due to the length of schooling. Just imagine making the equivalent of a mortgage payment (or more) every month just to cover the cost of your education. Fortunately, most of these people I know will be going into a career where they can afford to make those payments, but it doesn't leave nearly as much of that so-called 'high' physician salary in their pocket as the general public seems to think. People in all fields are paying a high cost for higher education, and in some cases, it's becoming increasingly questionable if it's worth the time and expense.

[killbot737]

Hmm. A friend of mine works for them. I'll have to find out their plans for the employees. I expect there to be none.

[Isgrimnur]

State unemployment insurance. Of which, I'm sure, is underfunded by its ITT Tech receipts to be prepared for the influx of claimants.

[Pyperkub]

Most colleges are robbing their students with bullshit worthless degrees even if they do have accreditation.

Is the problem the bullshit worthless degrees or that students are able to take out absurd loans to earn bullshit worthless degrees? If a bank won't allow me to borrow $500,000 to purchase a one bedroom shack with no plumbing, why should a lending agency hand out money for all types of higher education?

Full disclosure: I'm gainfully employed by an accredited higher education entity.

The third thing you are missing in this equation is what they (and other for-profit institutions like this) are being investigated for, which is the predatory lending/sales practices which much of the for-profit education sector engaged in after the financial collapse.

Whether it was due to the massive potential for new students funded by GI/Government loan programs or the desperation of poor financial management in a/the fiscal crisis, I don't know, but the huckster level went WAY up and ITT isn't the only for-profit educational institute like this which has been forced out of business due to the quick money grab.

Think Heald-Corinthian just last year.

Frontline had a couple of looks at how shady the industry became after the influx of veterans on GI benefits and the financial crisis:

College Inc.:

the film explores the tension between the industry -- which says it's helping an underserved student population obtain a quality education and marketable job skills -- and critics who charge the for-profits with churning out worthless degrees that leave students with a mountain of debt.

At the center of it all stands a vulnerable population of potential students, often working adults eager for a university degree to move up the career ladder. FRONTLINE talks to a former staffer at a California-based for-profit university who says she was under pressure to sign up growing numbers of new students. "I didn't realize just how many students we were expected to recruit," says the former enrollment counselor. "They used to tell us, you know, 'Dig deep. Get to their pain. Get to what's bothering them. So, that way, you can convince them that a college degree is going to solve all their problems.'"

Graduates of another for-profit school -- a college nursing program in California -- tell FRONTLINE that they received their diplomas without ever setting foot in a hospital. Graduates at other for-profit schools report being unable to find a job, or make their student loan payments, because their degree was perceived to be of little worth by prospective employers. One woman who enrolled in a for-profit doctorate program in Dallas later learned that the school never acquired the proper accreditation she would need to get the job she trained for. She is now sinking in over $200,000 in student debt.

Educating Sgt Pantzke From the transcript:

MARTIN SMITH: The average veteran is bombarded with for-profit college ads.

TELEVISION COMMERCIAL: I wasn't sure coming out of the military what my plans would be.

MARTIN SMITH: A Google search for "GI Bill" turns up GIBill.com, a site which directs soldiers only to for-profit schools. Even organizations like Amvets, one of the nation's oldest veterans' associations, is plastered with for-profit college ads.

Sen. DICK DURBIN, (D) Illinois: What's happened here is that there's so much money at stake for the for-profit schools that they have hired on substantial numbers of recruiters to go after these vets. So you find many of these schools — Kaplan, University of Phoenix — with hundreds, literally hundreds of recruiters going right after these veterans...

...MARTIN SMITH: Dan Golden, an investigative reporter for Bloomberg News, has written extensively about some of the most extreme military recruiting efforts at for-profit colleges.

DAN GOLDEN: I went to the Marine base in North Carolina, and I found that one of the for-profit colleges was sending a recruiter to the wounded warriors barracks, where she was signing up brain-injured Marines who even had difficulty remembering what courses they were taking. And it's quite a widespread phenomenon...

...Sen. TOM HARKIN (D), Iowa: [congressional hearing] Are the students and U.S. taxpayers getting a good value?

MARTIN SMITH: Soon after our report, Congress held hearings to investigate. Quickly, they became alarmed by how much GI Bill money was going to for-profit colleges.

Sen. TOM HARKIN: All of a sudden, we found that there was a huge spike-up in the amount of military money going to these schools, a 600 percent increase in just a couple of years— huge increase. And so we started looking at that, and what we found is just really disturbing.

MARTIN SMITH: What disturbs Harkin and other critics is that more than a third of all GI Bill dollars are ending up at for-profit colleges. It's a disproportionate share, and it appears to be growing.

DANIEL GOLDEN, Bloomberg News: Overall spending on veterans' education went from less than $5 billion in 2009 to nearly $10 billion in 2010, and a lot of that is driven by for-profit colleges and their wooing of veterans.

[gilraen]

The big thing I'm seeing now is a push for 5 year mixed undergrad/masters level programs. Essentially, you earn a BA/BS and some type of Masters by doing extra work in your 4th year and then finishing a year later. There are 23 year olds that haven't worked a day in their life graduating with an MBA. Who hires them? How are they even going to begin to pay down a $120,000+ loan when on paper they're overqualified and have zero experience?

I have an MBA...I got it when I was 25 (would have been 24 but I had to do an extra semester). I worked internships throughout my undergrad and grad school, so my only student loans were Pell grants from undergrad, about $28k, which I paid off within 5 years after graduating. I'm not using my degree, although not for lack of trying. When I started my current job (healthcare IT tech support), my starting salary was automatically higher than the same position without a graduate degree (that was over 10 years ago, they had different salary policies).

My brother did the 5-yr mixed degree program, he now has a MS in Aerospace Engineering. Which is much more useful than my MBA

I have a coworker that got some computer-related degree from Westwood College - he says it's a total scam, and he wishes that he didn't get tempted by the "fast track" promises.

[Smoove_B]

I have an MBA...I got it when I was 25 (would have been 24 but I had to do an extra semester). I worked internships throughout my undergrad and grad school, so my only student loans were Pell grants from undergrad, about $28k, which I paid off within 5 years after graduating.

Were your internships coordinated through your school or were you a motivated individual that found them on your own? I only ask because the school I'm part of requires internships as part of the degree and they assist in helping students find them. That's been the norm for 20+ years now (at least since I was an undergrad) but that's not a requirement across the boards for all degrees in all programs at the school.

The one that's grinding my gears right now is the one pushing a 5 year masters in health (hospital) administration. No one is graduating and landing a a 6-figure hospital administrator salary, though you'd think they were based on the size of the program.

[LordMortis]

5 years outta high school to get a masters? It took me almost 8 to get my undergrad. Of course, I graduated nearly debt free when tuitions were more reasonable. I lived with mom and dad and could make enough money working at 7-Eleven to pay off a mid tier university within driving distance as I went. Nowadays I think you need to start at a community college and transfer to a university to graduate nearly debt free and I'd imagine it would still be on the 8 years for a 4 year degree program.

I honestly can't tell how much modern debt problems are expectations of grandeur and how much is the cost of higher education gone out of whack. It has gotten out of whack, but it seems getting a degree without demanding loan forgiveness is still doable with a responsible approach.

I have no idea how ITT tech works but they have campuses and resources and instructor led courses. I'm not sure what should and shouldn't get you FAFSA monies, which were very limited in the late 80s. I didn't qualify for any when I was on my parents taxes, and I qualified for a total of $500 a year when I wasn't. I do remember the Clinton years drastically changed the game the year after I graduated, in 95. Seeing the write off available on my 96 taxes annoyed me to no ends. Thus began my long career of consistently never being able to benefit from changes in the tax code. Again, I have no idea what FAFSA did in addition to the tax code changes. And the GI bill changes with the weather (and the need for new recruits at that moment), so my sister says.

I'd think the shady colleges would be ones like Phoenix. They make no sense to me at all. But then I have a pea brain.

[GreenGoo]

5 years outta high school to get a masters? It took me almost 8 to get my undergrad.

[Jeff V]

5 years outta high school to get a masters? It took me almost 8 to get my undergrad.

It's like you didn't even try to slack off. When I was in college, our university game club played a day-long tournament against College of DuPage, a 2-year community college. One of the dudes I played was in his 7th year. At a 2-year school.

[Isgrimnur]

KSAT

The well-known University of Phoenix lost 50,000 students last year, and DeVry University has been sued by the Federal Trade Commission for misleading students about their chances of getting a job and increasing their income after graduation.

Last year, Corinthian Colleges closed most of its schools after being slapped with a $30 million fine by the DOE for overstating job placement rates for graduates. The company eventually filed for bankruptcy.

[Smoove_B]

5 years outta high school to get a masters? It took me almost 8 to get my undergrad.

Took my dad 9 years to get a 4 year degree. He went part time...and worked three jobs. I'm guessing he was less than amused at my 5 year plan.

[gilraen]

I have an MBA...I got it when I was 25 (would have been 24 but I had to do an extra semester). I worked internships throughout my undergrad and grad school, so my only student loans were Pell grants from undergrad, about $28k, which I paid off within 5 years after graduating.

Were your internships coordinated through your school or were you a motivated individual that found them on your own? I only ask because the school I'm part of requires internships as part of the degree and they assist in helping students find them. That's been the norm for 20+ years now (at least since I was an undergrad) but that's not a requirement across the boards for all degrees in all programs at the school.

I went to a state school (U. of Colorado), they didn't require internships and certainly didn't coordinate them, but they did provide resources to assist in finding them - career fairs, internal career web site that compiled internship listings from different companies, etc. Ironically, I never had any luck landing positions that were "advertised" internally because there was too much competition. I had much better luck getting positions that I'd find on a specific company's website.

[LordMortis]

5 years outta high school to get a masters? It took me almost 8 to get my undergrad.

Took my dad 9 years to get a 4 year degree. He went part time...and worked three jobs. I'm guessing he was less than amused at my 5 year plan.

8 Years was full time (minimum full time of 12 credit hours) fall and winter. I only worked spring/summer. I did, however, graduate with three majors and a minor by playing some games with credits and applying some classes to multiple fields of study. I think it took an extra 16 credit hours above the minimum need to graduate with normal major/minor combo.

I was sometimes working 2 jobs at a time and I didn't work at all during my last semester, when I did take on some student debt in order to student teach... and move out of my parents house to live with my then girlfriend.

[Jeff V]

honestly can't tell how much modern debt problems are expectations of grandeur and how much is the cost of higher education gone out of whack. It has gotten out of whack, but it seems getting a degree without demanding loan forgiveness is still doable with a responsible approach.

I have no idea how ITT tech works but they have campuses and resources and instructor led courses. I'm not sure what should and shouldn't get you FAFSA monies, which were very limited in the late 80s. I didn't qualify for any when I was on my parents taxes, and I qualified for a total of $500 a year when I wasn't. I do remember the Clinton years drastically changed the game the year after I graduated, in 95. Seeing the write off available on my 96 taxes annoyed me to no ends. Thus began my long career of consistently never being able to benefit from changes in the tax code. Again, I have no idea what FAFSA did in addition to the tax code changes. And the GI bill changes with the weather (and the need for new recruits at that moment), so my sister says.

I'd think the shady colleges would be ones like Phoenix. They make no sense to me at all. But then I have a pea brain.

I think what it comes down to is whether employers think enough about such schools that, at the very least, wouldn't be considered a negative factor on a job application. Some of the most profoundly stupid people I've ever known have sported degrees from the likes of DeVry or Robert Morris -- if someone's resume includes either of these schools, they better have enough other stuff to cover up the stench. I don't think I've known anyone who went to ITT Tech, but in my mind it was always the type of school where minimum wage data entry clerks come from.

Another factor with the vocational schools I suppose is the success rate for passing various licensing or certification exams. The school my wife is going to for her LPN had problems with the state because too many of their students was failing the licensing exam. Their reaction (to retain accreditation) caused her to have to repeat a difficult portion of the program (at an additional $2500 plus expenses) and is now cleared to take the licensing exam a full year later than she intended when she signed up there. And this school doesn't even take any sort of government aid or student loans whatsoever (our tax accountant even warned us that without a particular form the school does not provide, we could potentially see the deduction for education expense nullified). By all accounts, though, the exit exam my wife just passed is allegedly harder than the NCLEX licensing exam. In the end though the whole thing can be characterized as an expensive trade school that provides low-end opportunities for a high-demand market. She is even considering staying with this same school for their new RN program, but I'm afraid she'll still end up with several years of classes to get a BSN (when it really starts to pay off).

[Smoove_B]

I went to a state school (U. of Colorado), they didn't require internships and certainly didn't coordinate them, but they did provide resources to assist in finding them - career fairs, internal career web site that compiled internship listings from different companies, etc. Ironically, I never had any luck landing positions that were "advertised" internally because there was too much competition. I had much better luck getting positions that I'd find on a specific company's website.

You're definitely not the norm (at least from what I've seen over the last 8 years), so good for you being all motivated and studious . Very few students I interact with are motivated to work/volunteer/intern and seemingly expect to be hired immediately after graduation. I did an internship that flipped into a paying job my 4th and 5th year of undergrad, and most of my peers were doing the same thing in private industry.

I think that's another element that is lost in the shuffle when 16 year olds are being pumped up for college. Someone needs to help them view the likely minute differences between programs and colleges that are available. Does your projected program of study help find internships are are you thrown to the sharks with the overall student body? Is hands-on-learning part of the program? Is the teaching staff made up of 100% academics or are there people working in the field that also teach and can help bridge the gap between theoretical and actual? I also understand expecting a 16 year old to know (1) what they want to do and (2) make a binding decision are likely pointless - which is all the more reason to not start taking out $20,000+ loans at the age of 18 to get a degree in *something*.

[LordMortis]

Another factor with the vocational schools

That's a fear. Universities don't teach you to be a plumber or an electrician or hosts of others vocations that are desperately needed. I can only imagine for profit vocational schools are the primary way to keep these necessary vocations going. Keeping DeVry and Phoenix and ITT out of it, if federally subsidizing for profit schooling inherently bad when we do the same for academic universities and colleges?

OtOH, I'm all for demanding accountability. If you get federal monies then they should be able to audit you for a set of standards. That's precisely why I fear the federal government subsidizing public schools. I want to say right now, federal government contributes about 7% to public education in Michigan. The state bends over backwards, totally disrupting schedules and normal educational plans to maintain standards necessary to get that 7% funding... that is coming from the tax payers, through the fed back to the local schools.

[killbot737]

My bro-in-law is a union carpenter and he teaches classes for them. He's in a classroom with books and everything, but I know the guys sent off to jobsites to learn "for real" as well. He says they're pretty strict, no-show absences are not allowed, etc.

My other bro-in-law is a union electrician and I know for a fact they have tons of classes you have to/can take to keep up your certifications.

Curse those unions for teaching people proper construction skills and keeping those noble Home Depot day laborers from earning a living!

I used to see a ton of CNC and those types of ads in the newspaper long before there was an internet to put them on. I always wondered how you got trained to do that stuff. I thought it would be fun.

[Pyperkub]

KSAT

The well-known University of Phoenix lost 50,000 students last year, and DeVry University has been sued by the Federal Trade Commission for misleading students about their chances of getting a job and increasing their income after graduation.

Last year, Corinthian Colleges closed most of its schools after being slapped with a $30 million fine by the DOE for overstating job placement rates for graduates. The company eventually filed for bankruptcy.

DeVry:

The Department of Education is subjecting DeVry University to tougher financial oversight as part of a settlement over the for-profit college chain’s alleged use of misleading information about the employment of its graduates in radio, television, online and print advertisements.

On Thursday, the federal agency said the school can no longer advertise that 90 percent of its graduates land jobs within six months of leaving school and must post a notice on its website stating that the claim is unsubstantiated. DeVry must also provide a letter of credit from a bank assuring the availability of $68.4 million to participate in the federal financial aid program

[Isgrimnur]

KSAT

DeVry University has been sued by the Federal Trade Commission for misleading students about their chances of getting a job and increasing their income after graduation.

Politico

The Trump administration has tapped a former for-profit college official to lead the Education Department unit that polices fraud in higher education.

Julian Schmoke Jr., who previously directed campus operations at West Georgia Technical College and served as a dean at DeVry University, will be the department’s new chief enforcement officer, according to an internal email obtained by POLITICO.

Schmoke will lead the Student Aid Enforcement Unit, which was established by the Obama administration to more aggressively combat fraud and deceptive practices at colleges and universities.
...
Before joining West Georgia Technical College, a public institution, Schmoke worked in various roles at DeVry University between October 2008 and April 2012, including as an associate program dean, according to his LinkedIn page.

DeVry’s parent company, which has since rebranded as Adtalem Global Education, last year agreed to pay $100 million to resolve allegations by the Federal Trade Commission that the for-profit college company misled students about their job and salary prospects.

The company also separately reached a settlement with the Education Department over similar allegations. Obama administration officials cited those cases against DeVry as they announced the formation of the Student Aid Unit last year.

The unit Schmoke will oversee is also responsible for processing debt relief claims filed by federal student loan borrowers who say they’ve been defrauded by their college. DeVry students had 1,872 “borrower defense to repayment” claims pending before the department, according to a July 7 letter from acting Undersecretary of Education James Manning.

The Trump administration has stopped approving new “borrower defense” claims, but DeVos has said she’ll honor the claims previously approved by the Obama Education Department.

To be fair, she may have had nothing to do with any of it.

[Zarathud]

Maybe this will help the Bernie Bros realize Trump was the corrupt option worse than Hillary.

[Isgrimnur]

CNBC

A judge ruled on Tuesday that an Obama-era set of consumer protections for defrauded students will go into effect immediately, after repeated attempts by the Trump administration and the for-profit college sector to delay the regulation.
...
Judge Randolph D. Moss, a federal judge in Washington, D.C., denied on Tuesday an industry group’s request to postpone the rule. That comes after Moss ruled last month that Education Secretary Betsy DeVos’s delays of the regulation were unlawful.

Now that the Obama-era regulation, known as borrower defense, is in effect, there is a clear process through which defrauded students can have their federal student loans cancelled. Certain students whose schools closed while they were enrolled will be entitled to an automatic discharge of their debt.

In addition, schools that receive federal funding can’t force their students into arbitration or require them to forgo class actions.
...
The Trump administration has proposed to rewrite the regulation, but the Obama-era rule will be in effect for at least the next two years.

[Pyperkub]

Education Corp of America gone:

ECA largely blamed falling enrollment on an upswing in the economy, which left fewer adults heading to school for job skills, and on increased federal regulation of the for-profit college industry.

The sudden closure drew criticism from the U.S. Education Department, which said it had been working with the company to arrange a shut-down that gave students time to transfer.

"Instead of taking the next few months to close in an orderly fashion, ECA took the easy way out and left 19,000 students scrambling to find a way to finish the education program they started," Liz Hill, an Education Department spokeswoman, said in a statement.

Like the recently shuttered Corinthian Colleges and ITT Technical Institute chains, Education Corporation of America was overseen by the Accrediting Council for Independent Colleges and Schools, one of the watchdog groups the federal government appoints to ensure colleges offer a quality education.

The council, known as ACICS, wrote a Tuesday letter to Reed saying it was suspending accreditation immediately at all the institutions, citing "rapidly deteriorating financial conditions," a failure to make required payments to the council and a wide variety of academic concerns.

ACICS was shut down by the Obama administration over allegations of lax oversight, but was later reinstated on Nov. 21 by Education Secretary Betsy DeVos, who found it was "substantially in compliance" with federal standards.

[Isgrimnur]

NBC NY

The Biden administration said it is approving 18,000 loan forgiveness claims from former students of ITT Technical Institute, a chain that closed in 2016 after being dealt a series of sanctions by the Obama administration. The new loan discharges will clear more than $500 million in debt.

The move marks a step forward in the Biden administration’s effort to clear a backlog of claims in the borrower defense program, which provides loan forgiveness to students who were defrauded by their colleges. Claims piled up during the Trump administration, which stalled the program and only started processing claims after a federal court demanded it. There are now more than 100,000 pending claims.
...
It follows another round of loan discharges in March, when the Education Department cleared $1 billion in federal student debt for 72,000 borrowers. Those claims all came from former students of for-profit colleges.

[LawBeefaroni]

Taxpayers get to foot the bill while the scammers keep the money.

At least Trump U got sued. These scumbags didn't.


From 2016:

Trump University apparently didn't require participants to agree to a pre-dispute arbitration clause. That allowed the three lawsuits settled last week, two of which were class-actions, to wind through the court system and call attention to the allegations against the real estate seminar program bearing Trump’s name throughout the campaign and even into his first weeks as president-elect. The settlement covers roughly 7,000 consumers, who are eligible to receive more than $35,000 each, according to the plaintiffs’ lawyers.


Students attending traditional for-profit colleges rarely had this opportunity. About 98% of students enrolled in for-profit colleges receiving federal financial aid were subject to an arbitration clause, according to a report published earlier this year by the Century Foundation, a progressive think tank. That made it nearly impossible for students who believe they were wronged to challenge the institutions in court and win a public settlement like last week’s Trump University deal.

Years before Corinthian Colleges and ITT Technical Institutes collapsed following allegations that the schools misled students, multiple students tried to challenge the schools in court, but were unsuccessful due to arbitration clauses both schools included in their enrollment agreements, noted Pauline Abernathy, the executive vice president of The Institute for College Access and Success, an organization that promotes access to higher education. Lawyers for ITT even argued that the New Mexico attorney general was bound by the arbitration clauses signed by students.

Both students at Corinthian and ITT Tech “had sought to hold the schools accountable for wrongdoing in the courts and were systematically forced into arbitration where the issues are decided by people picked by the school in private, behind closed doors,” Abernathy said. That, in part, allowed the alleged misbehavior to continue relatively unchecked for years, she said. “The reason why there were no court findings while they were still in operation is because these forced arbitration clauses prevent students from holding schools accountable.”

[Isgrimnur]

The Hill

The Biden administration is canceling $55.6 million in student loan debt for victims who were defrauded by three for-profit institutions.

The Education Department said in a Friday statement that it has canceled the debts of 1,800 borrowers who attended Westwood College, Marinello Schools of Beauty and the Court Reporting Institute.

Of the forgiven debt, the lion’s share — some $53 million — will go to borrowers who attended Westwood College, which closed in 2015.

The school, which had campuses across the country, is accused of misrepresenting students’ ability to have credits transferred to other institution between 2002 and 2015. In addition, it is accused of misleading students who went through its criminal justice program into thinking that they would be able to find employment within various law enforcement agencies in Illinois.

Separately, the department approved more than $2.2 million from 200 claimants who say they were defrauded at Marinello. Borrowers claimed the school didn’t teach them key elements of a cosmetology program, and that students were left for weeks or months without instructors.

Another $340,000 in debt was forgiven to 18 borrowers who attended Court Reporting Institute. The agency says the majority of students were never able to complete the program, noting that just 2 percent to 6 percent of students graduated.
...
The Biden administration had already canceled $1.5 billion in debt for nearly 92,000 borrowers who claim they were defrauded by ITT Technical Institute and Corinthian College.