By Professor Doom
After trying to
fight the government, ITT tech has been forced to shut its doors. This is the
second big for-profit school to be effectively shut down by the government
recently. There’s much wailing about all the students displaced, all the people
put out of work by this…but there’s more to the story than just unemployed teachers
and stranded students.
First, a quick
review of Corinthian, the big fraud school shut down before the government
turned its eye to ITT. This major school was an open fraud, and had been known
as such by the Federal government for years. The Feds kept going to
accreditation and asking “Why do you accreditors keep certifying this school as
legitimate, when every time we investigate the school we have no trouble
showing it’s a fake school?”
I really want to
point that out: the government would enroll fake students, with fake
credentials…and Corinthian didn’t care, even though it was in violation of law.
The fake students/government plants would turn in fake assignments; not just
plagiarized, but completely unrelated to the assignment in the course, and
still get passing grades in exchange for the student loan money. I’m only
lightly going over the frauds at Corinthian, but they were extreme.
The accreditor, of
course, saw no problem with any of this; as long as Corinthian paid its dues,
it was accredited, because that’s all accreditation means now.
Ok, the
accreditor wasn’t that honest, but I’m not far from what they said:
The
“criteria” for accreditation, for all intents and purposes, was Corinthian made
sure to pay the accreditor a cut of the student loan money it was receiving.
I’ve seen accreditation rules violated in every single way but one: pay the
accreditation dues. I’ve never seen accreditation removed for violations until
ITT (and it really seems the government pressured the accreditor), so I figure
that one rule must be the only one that actually counts.
With the accreditor doing nothing, the
Federal government was forced to shut down Corinthian on its own. The students
were screwed, on the hook for loans, and unable to transfer whatever bogus
credits they had (accreditation is supposed to help with transfer of credits,
but has long abandoned that purpose as well).
After decades of being ripped off, the
Federal government also decided that ACISC, the accreditor for Corinthian, is
as much a joke as Corinthian:
So, now let’s go over to ITT Technical
Institute. Before going further, I need to explain I liked ITT Tech.
Thirty years ago, they used to focus on job training skills, and a few of my
friends got useful degrees and well-paying jobs based on skills they learned at
ITT (I’ll just call it ITT from here on out).
The student loan scam warped ITT. There
were just so many students willing to pay any tuition amount via student loans
that there was no need to bother with education. For-profits aren’t the only
schools like this, I promise the gentle reader; once I helped to make my community
college fully accredited, our student base quadrupled, because accreditation
means the students qualify for student loans…and after accreditation, interest
in standards vanished instantaneously.
Anyway, ITT got in trouble not just for
being a little weak academically, but for lying about their job placement
statistics, and for having low placement rates overall. At the risk of
defending ITT too much, I should point out that actual unemployment is far
higher than our “official” statistics say…it’s no surprise ITT is having
trouble with job placement.
This time around, we don’t have the
debacle of the accreditor asserting the school is legitimate while the Federal
government is locking the doors and kicking students out of the school because
it’s an open fraud.
In blocking
new students from enrolling, the Education Department cited the actions of
ITT's accreditor, the Accrediting Council for Independent Colleges and Schools,
which determined that ITT "is not in compliance and is unlikely to become
in compliance with [ACICS] accreditation criteria."
Yeah…that’s what they’re saying. The
gentle reader needs to understand that ITT hasn’t changed its business
practices in a decade or more. There was literally nothing about ITT in 2006
that wasn’t just as true in 2016. The accreditor could have withdrawn
accreditation a decade ago, maybe even 20 years ago, for the same reason as
today. The only reason accreditation is doing it now, is because the government
wants the school shut down.
As much as I applaud finally shutting
down another fake school, the Libertarian in me must be concerned: the Federal
government now has the ability to shut down schools it doesn’t like. What
happens if a university stops teaching socialism/Keynesian economics as a good
thing, but instead presents these concepts as evils? The government can shut the
school down. I don’t like the precedent here at all.
I’m probably just worrying too much,
since technically, the Federal government didn’t shut down the school, they
merely pressured the accreditor to do its job and not accredit ITT. Anyway,
with accreditation removed, ITT no longer has access to all those sweet, sweet,
student loan checks. They did the only reasonable thing here:
They shut
down immediately.
"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.
Federally backed
student loan money represents 95% or so of their revenue, as it is for most
for-profit schools. The gentle reader should understand that getting rid of the
student loan scam will end accredited for-profit schools, overnight, as they
all rely on the huge profits generated by those loans.
Of course, ending
the student loan scam will also end the many fraudulent community colleges,
since those have around 80% of their student base due to Federal money
(directly or indirectly). It will likely end many private and state
universities as well…so perhaps my concerns are valid regarding the new system
of the government telling accreditors to “withdraw accreditation, or else” when
it comes to unpopular schools. As much as I agree with the decision here, I
still worry about the implications for higher education.
At least this time
around, the active students at the school won’t be on
the hook for the loans they took out for bogus courses that won’t help with
getting a job, and can’t be transferred:
When ITT Technical
Institute announced it was closing its doors on Tuesday, Zach Seigel, ITT class
of 2008, was thrilled. Not for himself, he says, but for all the people who now
won’t be saddled with the same debt and useless degree that he is: $40,000
of student loans he can’t discharge and an associate degree in applied science
that he says didn’t lead to any paid work.
This is certainly
good news, and better than the Corinthian debacle where this sort of thing
wasn’t clear initially. True, these kids were still cheated out of years of
their lives…but being relived of many thousands of dollars of debt is still
nice.
However, the kids
that got their fake degrees last year, or 10 years ago, and were thus cheated
by the bogus accreditation system? They’ll get nothing. It’s a cruel system the
student loan scam has created, and it isn’t just hurting people in the
for-profit schools.
I write as
often as I can about the 58 community colleges in N.C. 32 of which do not
graduate in excess of 20% of their first time full time students. Yet they have
accreditation oversight that does not fulfill its responsibility to the
taxpayer who is funding the 80% to oftentimes pocket over and above grant
money, and to never finish what they started by achieving a degree.
Bottom line, the
government shutting down fake schools is improving. From the mess of Corinthian
to the somewhat more organized mess of ITT, we can see a clear increase in
organization of the destruction.
Still, if accreditation was legitimate, or
the student loan scam didn’t exist in the first place, we could have avoided
wrecking the lives of so many young people.
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