WILMINGTON, MA — ITT Tech, which has a campus on Ballardvale Street in Wilmington, abruptly closed all of its locations yesterday nationwide.
Last month, the U.S. Department of Education announced it would no longer allow ITT to enroll new students with federal aid after the for-profit college failed to address its accreditor’s concerns amid numerous state and federal investigations.
One of those investigations led to a lawsuit brought by Massachusetts Attorney General Maura Healey in April, accusing the school of “engaging in unfair and harassing sales tactics and misleading students about the quality of its Computer Network Systems program, and the success of the program’s graduates in finding jobs.”
According to the State Attorney General’s Office:
ITT’s admissions representatives allegedly told prospective students that anywhere from 80 percent to 100 percent of graduates obtained jobs in or related to their field of study. Real placement rates were actually 50 percent or less at each campus. ITT did not disclose that its placement rates included graduates with jobs outside their field of study and graduates with internships or short-term, unsustainable jobs who never received permanent, sustainable employment – including any job that somehow involved the use of a computer. ITT claimed that jobs simply selling computers at big box stores counted as placements, and even counted a graduate as placed who provided customer service for an airline checking travelers into their flights.
ITT’s recruitment strategy included soliciting prospective students in Massachusetts through advertisements, its website, direct phone calls and in-person communications. Former admissions representatives were allegedly expected to call up to 100 prospective students per day and were publicly shamed or fired if they failed to meet their quotas. Students were allegedly persuaded to visit a campus as soon as possible, where they were encouraged to apply, take an admissions exam, and complete a financial aid pre-appointment that same day. Admissions representatives pressured prospective students to enroll regardless of whether they were likely to succeed in the program.
ITT also advertised and promoted hands-on training and personalized attention through its program, but students said their experience involved the use of outdated technology, absent teachers, or being told to “Google” the answers to questions.
According to the complaint, federal loans accounted for most of the students’ debt, but ITT also extended short-term loans to students. When student borrowers were unable to repay, ITT steered them to expensive, private loans that they were unable to afford. The loans had high interest rates and high default rates.
The AG’s complaint seeks civil penalties, injunctive relief and restitution, including the return of tuition and fees to eligible students targeted by ITT’s unfair or deceptive acts or practices to enroll in the Computer Network Systems program.
ITT Tech announced its closing in a statement on Tuesday and took the opportunity to heavily criticize the federal government’s sanctions against the school:
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.
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