ITT Tech’s Closure: A Win for Black, Hispanic Students
After two years of intensive scrutiny and a fraud investigation, ITT Technical Institute announced it will close its doors.
Of the 40,000 students enrolled in ITT Educational Service Inc.’s 145 schools, about 46 percent are black or Hispanic. Students of color make up roughly the same share of student bodies across all for-profit institutions.
The school’s campuses in Overland Park and Kansas City have been closed. An estimated 700 Missouri students will be affected from the closure.
The ITT school system was asked by the federal government to increase its credit from about $80 million to $124 million. Simultaneously, the Department of Education forbade the school from taking in federal aid to enroll new students.
The school has attracted a battery of regulatory reprimands from agencies including various state Attorneys General and the Consumer Financial Protection Bureau, which entered a federal lawsuit against the school for its practice of predatory lending. The state chief barristers have cited the school for overstating its graduation rates.
Last year, the school enrolled 45,000 students and reported $850 million in revenue.
In a statement, the National Council of La Raza praised the federal government’s aggressive action against the school.
“It is unconscionable that some schools continue to receive taxpayer dollars while defrauding students who pursue an education to better themselves and their families. We hope advocacy will lead to stronger policies that protect students and taxpayers so that education is not a debt sentence, but rather an opportunity to pursue the American Dream,” the statement read.
While African American and Latino students are overrepresented in for-profit colleges, they’re less likely to graduate there than at traditional public, private or nonprofit schools, a federal student concluded. For example, Latinos attending a public college graduated at a 50 percent rate in 2012 compared to their peers at a for-profit college who graduated at a 34 percent rate. For African American students, graduation rates at public colleges were 40 percent versus 21 percent at a for-profit school.
The same study found students at for-profit schools represented 44 percent of loan defaults though they made up only 12 percent of postsecondary enrollment.
“... African American and Latino students are disproportionately enrolled in schools where they are both likely to borrow and unlikely to succeed, and there are few incentives for schools to improve poorly performing programs,” the student concluded and recommended stronger oversight to protect students.
