By Suzanne Martindale, Consumers Union
The news isn’t looking so good for ITT Educational Services, a for-profit company that markets career education programs. This week, the Washington Post reports that the Department of Education is placing additional restrictions on the ITT’s use of federal grants and loans because it failed to account for millions of dollars in aid that was disbursed to students in the last five years.
ITT is coming under heightened scrutiny in light of the recent bankruptcy and closure of Corinthian Colleges, a behemoth in for-profit education that deceived thousands of students as to the quality of their programs and padded their job placement numbers, among other things. These students took on significant debts for false promises, and often dropped out after realizing that the programs weren’t anything like what they were promised. Now many of these students are petitioning the Department to get their debts canceled on the grounds that they were defrauded.
Given that ITT is also fielding several lawsuits from state and federal regulators – even the SEC is suing them for alleged investor fraud – it could soon be curtains for the company. If that happens, what will happen to ITT students who are stuck with the debt?
We’re advocating for more oversight over these schools, and urging the Department of Education to restore justice for students who were loaded with oppressive debts for a poor-quality education. Stay tuned for more developments in the coming months.