Curtain closes on ITT Technical Institute, a bad actor among for-profit colleges

ITT Technical Institute campuses have closed across America.
ITT Technical Institute campuses have closed across America. File photo

The sudden closure of ITT Technical Institute for-profit campuses in the Kansas City area and throughout the country will disrupt the lives of thousands of students and could put a new burden on U.S. taxpayers.

In the long run, however, the action will help prevent many students from taking on large mounds of debt for degrees of questionable value.

And shutting down some of the for-profit college industry will protect taxpayers from being put on the hook for billions of dollars in additional student loans that can’t be repaid.

Negative outcomes occur far too often for students attending these institutions.

Many credits awarded by for-profit colleges won’t transfer to private or publicly run universities, which ultimately forces some students to drop out.

Students who run into other problems, such as caring for a spouse or children, have a tough time graduating from the colleges.

In addition, U.S. employers do not give the same recognition to some degrees from for-profit colleges. Students don’t get the jobs they had hoped for or are employed at lower levels of pay.

In the case of ITT Technical Institute, the U.S. Department of Education had seen enough problems to finally prevent the company from using federal financial aid when it was enrolling new students. That cut off an essential pipeline to funds that ITT had counted on to keep up its enrollment.

ITT has been a target of consumer advocates for years, along with other for-profit enterprises. Corinthian Colleges closed last year, filing for bankruptcy after a wave of claims regarding its misleading tactics of gaining students and having them take out thousands of dollars in federal loans for school expenses.

The Department of Education deserves some credit for finally waking up to the damage that large, bad actors in the for-profit college industry have been causing. The agency’s attempt to hold ITT to higher standards was not a sudden crackdown, as its leaders claimed.

“The risk presented by ITT to both students and taxpayers made it irresponsible for us to allow them to enroll new students and not have additional oversight,” said a department spokesman.

The federal government, aware that many four-year universities look down on credits earned at for-profit colleges, is advising students to look into community colleges as their next best hope for a further education.

Here’s the potential problem for U.S. taxpayers. Student loans accumulated by ITT’s students will continue to exist unless they are discharged. That’s a time-consuming task that also eliminates any classroom credits awarded by for-profit colleges. The cost to taxpayers of totally forgiving student loans for ITT students could reach $400 million.

That eye-popping number shows why it’s not just the students who can suffer when for-profit colleges run into trouble with regulators and groups that accredit them.

Deceptive advertising by for-profit colleges has drawn plenty of deserved negative attention from attorneys general, the U.S. Department of Education and, belatedly, more students who are fortunately shunning them. The future of this sector of U.S. higher education grows more tenuous by the day.