The Washington Post: Shutting down for-profit schools could hurt more people than it would help

By Editorial Board September 10

 

NEVER MIND that the higher education plans of tens of thousands of students will be disrupted. Or that 8,000 people will lose their jobs. Or that American taxpayers could be on the hook for hundreds of millions of dollars in forgiven student loans. What is apparently of most importance to the Obama administration is its ideological opposition to for-profit colleges and universities. That’s a harsh conclusion, but it is otherwise hard to explain why the Education Department has unabashedly used administrative muscle to destroy another company in the beleaguered industry.

ITT Technical Institutes, one of the nation’s largest for-profit educational chains, on Tuesday abruptly announced that after 50 years in business it was shutting down more than 100 campuses in 38 states. The announcement, displacing an estimated 40,000 students, follows last month’s decision by the Education Department barring the school from enrolling new students using federal student aid and upping its surety requirements. The department said it was acting to protect students and taxpayers, noting the school had been threatened with a loss of accreditation and that it was facing a number of ongoing investigations by both state and federal authorities.

What is so troubling about the department’s aggressive move — which experts presciently called a death sentence — is that not a single allegation of wrongdoing has been proven against the school. Maybe the government is right about ITT’s weaknesses, but its unilateral action without any semblance of due process is simply wrong. “Inappropriate and unconstitutional,” said ITT officials.

Such unfairness sadly is a hallmark of the Obama administration policy toward higher education’s for-profit sector. It has singled out the industry for stringent employment and student loan rules and stepped up enforcement with stiff sanctions that, as The Post’s Danielle Douglas-Gabriel reported, have some companies on the brink of ruin.

There is no question that there are shady for-profit colleges and universities that take advantage of students by saddling them with debt and failing to give them marketable skills. They should not be in business. But then the same can be said for some public and private schools, whose wretched weaknesses the government seems glad to overlook.

There should be a level playing field that recognizes the place — and value — of for-profit colleges and universities. Not only do they serve the vocational and educational needs of nontraditional students (older, poorer or minorities) that nonprofit institutions are unable or unwilling to serve, but also they have been a source of innovation in higher education. The government should be looking for ways to strengthen the industry, rather than trying to destroy it.

Direct link to article: https://www.washingtonpost.com/opinions/shutting-down-for-profit-schools-could-hurt-more-people-than-it-would-help/2016/09/10/3f6cb5ba-76b2-11e6-b786-19d0cb1ed06c_story.html?utm_term=.09f9af950180

New Release: ITT Educational Services, Inc. to Cease Operations at all ITT Technical Institutes Following Federal Actions

Sep 6, 2016

CARMEL, Ind., Sept. 6, 2016 /PRNewswire/ -- Today, ITT Educational Services, Inc. released the following statement:

"It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service. With what we believe is a complete disregard by the U.S. Department of Education for due process to the company, hundreds of thousands of current students and alumni and more than 8,000 employees will be negatively affected.

The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes, and we will not be offering our September quarter. We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution.

Effective today, the company has eliminated the positions of the overwhelming majority of our more than 8,000 employees. Our focus and priority with our remaining staff is on helping the tens of thousands of unexpectedly displaced students with their records and future educational options.

This action of our federal regulator to increase our surety requirement to 40 percent of our Title IV federal funding and place our schools under "Heightened Cash Monitoring Level 2," forced us to conclude that we can no longer continue to operate our ITT Tech campuses and provide our students with the quality education they expect and deserve. 

For more than half a century, ITT Tech has helped hundreds of thousands of non-traditional and underserved students improve their lives through career-focused technical education. Thousands of employers have relied on our institutions for skilled workers in high-demand fields. We have been a mainstay in more than 130 communities that we served nationwide, as well as an engine of economic activity and a positive innovator in the higher-education sector.

This federal action will also disrupt the lives of thousands of hardworking ITT Tech employees and their families. More than 8,000 ITT Tech employees are now without a job – employees who exhibited the utmost dedication in serving our students. 

We have always carefully managed expenses to align with our enrollments. We had no intention prior to the receipt of the most recent sanctions of closing down despite the challenging regulatory environment that now threatens all proprietary higher education. We have also always worked tirelessly to ensure compliance with all applicable laws and regulations, and to uphold our ethic of continuous improvement. When we have received inquiries from regulators, we have always been responsive and cooperative. Despite our ongoing service to this nation's employers, local communities and underserved students, these federal actions will result in the closure of the ITT Technical Institutes without any opportunity to pursue our right to due process.

These unwarranted actions, taken without proving a single allegation, are a "lawless execution," as noted by a recent editorial in The Wall Street Journal. 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.

We believe the government's action was inappropriate and unconstitutional, however, with the ITT Technical Institutes ceasing operations, 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."

SOURCE ITT Educational Services, Inc.

For further information: Nicole Elam, ITT Educational Services, Inc., 13000 N. Meridian St., Carmel, Ind. 46032, 317-706-9200 

Direct link to news release: http://www.ittesi.com/2016-09-06-ITT-Educational-Services-Inc-to-Cease-Operations-at-all-ITT-Technical-Institutes-Following-Federal-Actions

Inside Higher Ed:Military Students More Likely to Attend For-Profits and Online

August 31, 2016 

Newly released federal data show the enrollment patterns of the 1.1 million military and veteran students who were attending college in 2012, the most recent year covered by the report from the U.S. Department of Education's National Center for Education Statistics.

During the four years before 2012, the percentage of military undergraduates attending for-profit institutions increased to 24 percent from 14 percent, the report said, while the percentage attending community colleges declined to 37 percent from 42 percent.

In addition, both undergraduate and graduate military students were more likely to enroll in online programs than their nonmilitary peers. The report found that 18 percent of military undergraduates took all of their courses online, compared with 12 percent of their nonmilitary peers. Among military graduate students, 41 percent attended fully online compared to 19 percent of nonmilitary graduate students.

Direct link to article: https://www.insidehighered.com/quicktakes/2016/08/31/military-students-more-likely-attend-profits-and-online

CEUC: Career Education Colleges and Universities Sends Open Letter to Members of Congress in Response to Recent Announcement Regarding ITT Tech

8/26/2016 

 

Washington, DC –  CECU President and CEO Steve Gunderson sent an open letter to members of Congress in response to the U.S. Department of Education’s recent announcement that ITT Tech will longer be permitted to enroll students using Title IV funds.
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In the letter, Gunderson writes: 

“The manner in which the Department is handling this action has the potential to destroy the dreams of 43,000 or more students on 139 campuses across 37 states. It does not need to happen like this! Our schools are deeply committed to providing occupational skills and career opportunities to their students. And without exception, our schools always stand ready to work with other schools to handle transitions in ways that do not interrupt or cost students their dream.”
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Gunderson urges the Department to work together with CECU, saying:

“We now face the potential of dramatic dislocation of students as the fall semester begins. Speaking for every member of our association, I can promise you that if the Department were to work with us – in this situation or others – we stand ready to minimize the impact of dislocation on communities; on employers needing skilled workers; and on students seeking their occupational dream. But that cannot be done after an abrupt closure, should that be the outcome of the current decision.”

The full copy of the letter is available online.