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Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - Follow the Money

ITT Tech was a for-profit college with over 130 campuses across 38 states. While the company portrayed itself as providing career-focused education, its questionable business practices ultimately led to its downfall. When following the money behind ITT Tech, a concerning pattern emerges.

The company relied heavily on federal financial aid funds, with estimates that over $6 billion in federal grants and loans went to ITT Tech between 2007 and 2015. Yet only 8% of students who enrolled between 2008 and 2009 had completed their program by 2015. With such high dropout rates, where was all that money going?

Insiders paint a picture of a school prioritizing profits over education. Recruiters were encouraged to enroll anyone they could, regardless of academic ability. Teachers allegedly faced pressure to pass failing students. The school rapidly increased tuition costs while spending little on actual instruction.

Meanwhile, ITT Tech directed massive amounts of money toward marketing and executive compensation. Spending on marketing skyrocketed from $186 million in 2002 to $288 million in 2009. The CEO and other top executives received exorbitant compensation packages, with the CEO earning $3.3 million in 2012 alone.

Essentially, ITT Tech was exploiting federal financial aid to turn a profit while leaving students with huge debts and dubious credentials. The company grew rapidly, becoming the nation’s second largest for-profit college. But this business model could only be sustained so long, with ITT Tech ultimately filing for bankruptcy amid investigations and lawsuits.

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - Insider Accounts

While the money trail reveals much about ITT Tech’s motivations, insiders offer an even more troubling perspective. Interviews with former employees portray an organization that cared little for education and fixated on recruitment and profit.

According to one former recruiter, the emphasis was on enrolling anyone and everyone. Recruiters worked long hours calling leads and were reprimanded if they didn’t get enough enrollments. They were instructed to push emotional buttons, asking prospective students questions like “Don’t you want to be able to provide for your family?” High-pressure tactics like these ensured a steady stream of enrollments.

Former teachers describe an environment that discouraged real instruction. Syllabi and textbooks were standardized across campuses, allowing little flexibility. Teachers who tried to make classes more rigorous faced backlash from students and administrators alike. Failing grades were highly discouraged, as graduation rates mattered more than learning.

One instructor who taught criminal justice courses was alarmed by students’ lack of reading and writing skills. “They were paying for something they didn’t get,” he said. Yet he felt powerless to really teach, pressured to pass students regardless of performance.

While teachers felt compromised, top executives enriched themselves. The CEO collected millions in compensation, as did other senior executives. A former human resources director recalled the CEO arriving by corporate jet and then lecturing employees about cutting costs. The hypocrisy was not lost on staff.

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - Students Left Behind

The victims of ITT Tech's predatory practices were the students who believed its false promises. Lured by emotionally manipulative recruiting and dreams of better careers, they enrolled and took on substantial student loan debts. Yet many were left behind without marketable skills or credentials. Their moving stories reveal how real people suffered from ITT Tech's failure as an educational institution.

Kevin was laid off from his factory job during the 2008 recession. An ITT Tech recruiter convinced him that a computer networking associate's degree would kickstart a new technology career. However, the curriculum seemed disconnected from genuine IT skills. Despite his misgivings, Kevin persevered. "I tried my hardest,” he said, but left ITT $35,000 in debt and unemployed.

Single mother Tamika hoped an ITT nursing degree would lead to a better life for her family. She excelled academically but was distressed by the program's poor organization. When she attempted to transfer credits, other schools said her ITT courses were worthless. “It was just a wasted effort,” she lamented.

Army veteran Ray enrolled seeking business and tech skills after leaving the service. Yet classes relied on vague PowerPoint slides, with little meaningful instruction. Professors simply gave out answers to pass students. Ray's degree proved so useless that he hid it on his resume. "I feel robbed,” he said angrily.

Former criminal justice major Alicia had a similar experience. She quickly realized classes were substandard, with widespread cheating and professors who didn't care. Unable to transfer credits, she had to start her degree over from scratch at a community college.

ITT Tech left these students and thousands like them deeper in debt but no better off professionally. The school failed to provide the knowledge, training, and credentials it advertised. Graduates attempting to enter the workforce discovered their degrees inspired skepticism rather than interest. Many hid or omitted ITT from resumes to avoid stigma.

The injustice still angers former students years later. "We were tricked,” said dental hygiene major Maria. She emerged $50,000 in debt with an associate's degree employers saw as a liability, not an asset. Others felt taken advantage of due to their socioeconomic status, race, or gender. ITT Tech exploited those already facing barriers to upward mobility.

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - Regulators Asleep at the Wheel

While ITT Tech's practices raised numerous red flags, regulators failed to take decisive action until it was too late. Warning signs stretching back years were ignored or given token attention, allowing ongoing harm to students.

Former employees reported tactics like recruiting those unable to academically succeed and fabricating job placement data to accreditors. Yet regulators seemed unwilling to exert real oversight on the influential for-profit college.

Even smoking gun evidence of deception resulted only in wrist-slap fines. In 2007, ITT Tech was caught emailing employees about stashing bad student files before an accreditor visit. The company paid a paltry $100,000 settlement and faced no substantial consequences.

When the GAO investigated recruiters at 15 for-profit colleges in 2010, their findings about ITT Tech were particularly troubling. Undercover applicants witnessed egregiously deceptive pitches, like a job placement rate inflated from 49% to 80%. ITT Tech objected to the GAO's report but faced no penalties.

Students and former employees submitted over 1,000 complaints to the Department of Education accusing ITT Tech of fraud and predatory actions. Yet the department was slow to react, saying most complaints were about "grade disputes and dissatisfaction with instruction.”

Even proposed sanctions in recent years proved insufficient. In 2015, the Department of Education banned ITT Tech from enrolling students on federal aid. But after the company lobbied aggressively, the department partly reversed course just a month later.

It was not until ITT Tech’s finances began unraveling in 2016 that regulators took their strongest action. The Department of Education banned the school from accepting federal aid, dealing the fatal blow. But by then, the damage was done.

Another employee was brought to tears expressing frustration over the years of regulatory inaction. “For 10 years, I saw the school getting by with all manner of lies, deception, and political maneuvering. And no one stopped them.”

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - For-Profit Failure

ITT Tech's story represents the worst tendencies of the for-profit education model taken to an extreme. While supporters argue the private sector can increase access and innovation, skeptics cite the misaligned incentives that often lead to predatory behavior. The rapid rise and fall of ITT Tech offers a cautionary case study in prioritizing profits over student outcomes.

For-profit colleges expanded rapidly in the 1990s and 2000s, enrolling millions drawn by convenient locations and flexible schedules. However, these schools show poor results in helping students complete degrees or find jobs. On average, only 35% of students graduate within six years from for-profit institutions compared to over 60% at public and private non-profit schools.

These outcomes largely reflect the conflicting motives created by shareholders demanding ever-higher returns. There is tremendous pressure to boost enrollments by any means necessary. Recruiting becomes aggressive and deceptive, standards are lowered, and federal aid dollars get diverted from instruction to marketing and executive pay.

ITT Tech exemplified these problems. The company's revenue surged from $325 million in 1998 to nearly $1.1 billion by 2010 as enrollment quadrupled. Yet the number of students graduating lagged badly, with a completion rate under 25%. Insiders say genuine learning was undermined by standardized curricula, unqualified instructors and pressure to pass unprepared students.

Meanwhile, student debt loads ballooned. By 2010, over 25% of ITT Tech students defaulted on loans within 3 years of entering repayment – nearly triple the national average. Default rates reached over 40% at some campuses as students discovered their degrees led to poor job prospects and crushing debt burdens.

Yet even as outcomes suffered, money continued flowing to top executives and shareholders. The CEO collected $33 million in compensation from 2007 to 2009 while ITT Tech spent just $3,000 per student on instruction. Over $35 million went to marketing and recruiting during the same period.

For-profit advocates argue their model provides opportunity to underserved groups. But at ITT Tech, thosestudents actually showed the lowest completion rates and faced the highest loan defaults. Insufficient support structures led many to take on debt they had little chance of repaying.

The ITT Tech story shows what happens when revenue growth becomes the primary focus rather than education quality. Lack of accountability and oversight allowed predatory practices to continue for years. Nearly 40 state attorneys general were investigating ITT Tech when it finally collapsed.

Congressional scrutiny of the for-profit sector led to some reforms, including tighter regulation of recruiting practices and funding for student outcomes. But problems persist. Just a few years after ITT Tech's failure, large chains like Corinthian Colleges and Education Corporation of America have also shuttered under legal pressures and financial woes.

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - Taxpayer Bailout

ITT Tech's predatory practices and financial mismanagement led to its inevitable failure, leaving taxpayers on the hook for billions in discharged student loans. When a school closes, students enrolled at the time can apply to have their federal loans forgiven under what is known as a "closed school discharge." While this provides relief to students, it shifts the burden to taxpayers.

In the case of ITT Tech, early estimates predicted loan discharges could cost the federal government over $500 million for students enrolled in the final two years alone. But these figures have continued rising as the full scope of discharged debt becomes clear. A recent report found the final taxpayer bill exceeds $1.5 billion in forgiven loans just for ITT Tech students from its last five years of operation.

And those huge sums don't even account for defaults on older loans, projected to approach nearly $4 billion. These costs will also largely fall on taxpayers, since the federal government backs and guarantees most student loans. ITT Tech's decade-long pattern of predatory recruiting and poor student outcomes has left the public footing the bill.

Critics argue students should have known better than to take out tens of thousands in loans for a school with ITT Tech's reputation. But many attended believing they were investing in future careers after being misled by inflated job placement rates. They trusted accreditors to provide proper oversight, unaware regulators were failing to curb ITT Tech's abuses.

Veteran James served in Afghanistan before enrolling at ITT Tech. He took his studies seriously but was dismayed by disorganized courses clearly aimed at boosting enrollment over learning. Now saddled with $75,000 in loans and an unusable degree, James feels betrayed - both by ITT Tech and by regulators who didn't protect students.

Single mother Tina dreamed of becoming a nurse to better support her daughters. She persevered through ITT Tech's subpar nursing classes before discovering her credits wouldn't transfer. Taxpayers spent over $80,000 on Tina's education only to have her end up over $40,000 in debt and stuck in low-wage work.

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - Broken Promises

ITT Tech enticed prospective students with lofty claims about its programs that ultimately proved to be empty promises. The school advertised itself as a high-quality career training institution that would equip students with skills to succeed in growing technical fields. However, the actual educational experience fell far short of what was marketed.

Former students describe slick promotional materials and enthusiastic recruiters who guaranteed ITT Tech degrees would open doors. “They really sold me on how great the classes were and how I’d be ready for a high-paying IT job,” said Alex, who enrolled in a cybersecurity program. “But it was nothing like they said.”

According to Alex, classes relied on vague PowerPoint slides while teachers simply provided answers to pass students. There was little meaningful instruction or hands-on learning. Other former students echoed similar accounts across a range of programs, including criminal justice, nursing, computer networking and more.

Barbara was drawn to ITT Tech’s medical assisting program by the promise of a mix of classroom and clinical experience. “The brochures showed students in labs and scrubs,” she recalled. However, she found disorganized courses lacking resources or organization. Promised clinical rotations never materialized, leaving Barbara unprepared for real medical office work.

Such stories were common among ITT Tech graduates who discovered their degrees did not equip them with expected competencies. Job placement statistics proved to be inflated fiction. Criminal justice majors applying for law enforcement positions were rejected for lack of knowledge and training. Information technology grads found potential employers did not consider their degrees credible.

Raymond paid nearly $40,000 pursuing ITT Tech’s technical management bachelor’s based on advertised partnerships with companies like Microsoft and Cisco. “I thought I would learn skills that industry needed,” he said. Instead, he described simplistic curricula totally lacking the advanced training promised. Unable to land a technical management job, Raymond remains unemployed and burdened by student debt.

The greatest injustice was suffered by nursing students who believed completing ITT Tech’s licensed practical nurse (LPN) certificate would allow them to become nurses. However, many later discovered their credits would not transfer to local nursing programs. And ITT Tech LPN degrees did not qualify graduates to sit for the national licensing exam required to begin practicing.

“They ruined my dream of becoming an RN,” said Carla, who was devastated to learn her LPN certificate was essentially worthless after she had already paid ITT Tech over $20,000. The school misled students into paying for training that would never let them achieve their nursing career goals.

Who Pulled the Plug? Podcast Investigates the Shocking Demise of ITT Tech - The Aftermath

ITT Tech's collapse left behind a trail of destruction - worthless degrees, massive debt, and dreams shattered. But out of the wreckage, important conversations have emerged about accountability and ethics in for-profit higher education. Understanding this aftermath is key to avoiding similar debacles in the future.

Former students bear psychological scars along with financial burdens. They feel betrayed and robbed after buying into false promises. Veteran Allen describes himself as "jumping out of the pot and into the frying pan” when he enrolled at ITT Tech after leaving the military. He had hoped to launch a new civilian career but remains unemployed with over $60,000 in student loans.

Some grapple with embarrassment over their degrees’ stigma, omitting ITT Tech from resumes. Others report loss of self-esteem after realizing they were seen as nothing but dollar signs. “I feel so naive and stupid,” admits former nursing student Beth. "Friends try to comfort me by saying it wasn’t my fault, but I still feel ashamed.”

Anger has fueled grassroots activism among these former students. Groups like Veterans Education Success helped raise awareness and lobbied for reforms. Students testified before Congress about predatory targeting of veterans by for-profit colleges. Their voices put human faces on issues of regulatory oversight and academic integrity.

Revelations from ITT Tech’s downfall affirmed concerns about for-profit colleges among education policy researchers. Tighter restrictions have been placed around recruitment practices, student loan eligibility, and funding based on student outcomes. For-profits must now show graduates landed well-paying jobs, not just that they found low-wage work.

ITT Tech's closure also impacted thousands of former employees. While many instructors and staff had misgivings about pressure to enroll and pass students, they still lost jobs and healthcare. Like students, employees realized too late the company prized profits over people. However, some found the experience galvanized them into advocacy roles.