ANOTHER FOR PROFIT DIPLOMA MILL CAUGHT SCREWING THE TAXPAYER

ITT Educational Services is just another taxpayer scam. Corinthian, University of Phoenix, DeVry, and every other for profit college that spend more on advertising than the annual revenue of Ivy League business schools are nothing but government enriched phony educational fronts. The billions of loans doled out to “students” by our beloved Obama haven’t made anyone smarter. Most of this money has been absconded by these fake colleges and the fake students who pretend to go there.

WTF? Over 52% of all the students who enroll in these clown colleges drop out within one year. The graduation rates are about 20% and the number of graduates who get a job in their field of study is about 2%. Where does the money go. No one seems to know, because that isn’t the point. Obama is perfectly fine with these fake students using the money to prop up the economy by buying iGadgets and burritos. It’s all good. When the government declares each of these “colleges” to be a fraud, they’ll relieve all the fake students of their debt.

That means they’ll write off hundreds of billions and hand you the bill. Isn’t Obama’s ‘Murica great?

Via Marketwatch

The government is cracking down on funding for a major for-profit college chain

 

Bloomberg
ITT Educational Services headquarters.

ITT Educational Services is facing new restrictions on its financial aid funding from the Department of Education.

The Department sent a letter to ITT’s chief executive, Kevin Modany, on Monday, outlining tightened financial controls on the company. The new restrictions are a response to ITT’s “failure” to meet its “fiduciary obligations” to the Department since the 2009 to 2010 financial aid award year, Michael Frola, the director of the Department’s multi-regional and foreign school participation division, wrote in the letter.

Under the new restrictions for ITT ESI, -5.21% it will be required to prove to the Department that a student actually began attending classes before the company can disperse the aid to the student. Typically, schools are allowed to disburse financial aid up to 10 days before the first day of classes. The company will also face additional reporting requirements on its enrollment and disbursement of financial aid.

Since the 2009 to 2010 financial aid award year, ITT has struggled to reconcile the amount of financial aid money it pulled from the Department with the charges students actually incurred, according to the Department’s letter. The discrepancy could be an indication that a large number of students withdrew from the school after ITT had already tapped the financial aid dollars dedicated to the students, said Elizabeth Baylor, the director of post-secondary education at the Center for American Progress, a left-leaning think tank.

When Baylor worked as a staffer on the Senate’s Health, Education, Labor and Pensions committee, she said her team found that of ITT students who enrolled during the 2008 to 2009 academic year, 52% had withdrawn one year later. The average withdrawal rate for students at for-profit colleges was 54.5% that year. ITT was “falling down on its fiscal responsibility” because it was unable to even identify how quickly its own students were withdrawing, Baylor said. “That in and of itself is a huge cause for concern.”

ITT spokeswoman Nicole Elam acknowledged in a statement that the company had received a letter from the Department “identifying certain past procedural deficiencies,” but she noted that the company is already in the process of putting measures in place to “fully address the reporting and administrative matters.”

The action against the company comes amid growing concern over for-profit colleges and their use of financial aid. Corinthian Colleges collapsed last year amid allegations the company used inflated job placement and graduation rates to lure borrowers into enrolling at the school so the company could get the federal aid funds that came with them.

A group of Democratic senators, including Sen. Elizabeth Warren (D-Mass.) and Sen. Dick Durbin (D-Ill.), sent a letter to Ted Mitchell, the Department’s undersecretary, Tuesday expressing concern that companies under investigation are still receiving financial aid funds. Hundreds of colleges accused of violating laws are still receiving billions in financial aid funding, the New York Times reported earlier this month. “The Department of Education should take immediate action to limit or otherwise condition continued student aid funding based on evidence uncovered by federal and state authorities,” the senators wrote.

Federal financial aid dollars are a major source of funding for many colleges, so restrictions on access to that money could pressure a school. A year before Corinthian filed for bankruptcy, the company reached an agreement with the Department to essentially dissolve after facing a cash crunch caused largely by the Department placing a 21-day hold on the school’s access to financial aid funding.

Some have speculated that ITT could be the next domino to fall. The Consumer Financial Protection Bureau — the independent government agency charged with protecting consumer financial rights — sued ITT last year, charging that the company pushed students into high-cost loans that were likely to end in default. The Securities and Exchange Commission also accused ITT of misleading investors about the impact of two failing student loan programs on the company’s bottom line — a charge ITT labeled a “mistaken decision” at the time.

Still, company officials believe the Department’s new restrictions on the school won’t have a big effect on its business, Elam wrote in the statement. The company’s stock fell a bit yesterday, but appears to have recouped the drop. “While the additional requirements will result in an increased administrative burden, the company does not believe they will have a material negative impact on our financial results, or in any manner affect the timely award of financial aid to eligible students or the operation of our campuses,” she wrote.

 

7
Leave a Reply

avatar
  Subscribe  
Notify of
Dutchman
Dutchman

Clown college. We used to call these “high school with ashtrays”.

It’s unbelievable – the billboards touting numerous on-line diploma mills – you never have to attend a class.

Hope@ZeroKelvin
Hope@ZeroKelvin

This is really very sad on multiple levels.

For a lot of kids, these sorts of “educational” opportunities are all that are within some kind of reach. Certainly not the Ivy League or even most state schools, despite how many grants/scholarships/etc you offer. Denninger did a column on this several months ago, about how the cost of college educations has outstripped inflation and/or wages by a factor of 8-10 or something.

Of course the statement needs to be made that NOT ALL KIDS NEED OR SHOULD GO TO COLLEGE. The country needs people that can actually work with their hands and get shit done.

However…..We see regularly the outright moonbattery, suppression of free speech, catering to every whim of the “victim class” in the so-called mainstream universities, where professors teach 6 hours a week and then pad their salaries by working in the private sector. (Hello Ms. High Cheekbones Warren!)

We see that 50% of college graduates from these so-called mainstream universities living at home and unable to get jobs, spending $$$$$ on completely useless degrees like “Woman’s Studies” or some shit.

We see that the $1 TRILLION dollar student loan bubble is about to burst. The default rate on student loans is twice the rate of the mortgage defaults right before the housing bubble.

So yeah, the hands of these places isn’t exactly clean, but I ask you – how “clean” are the hands, and accounting, of the so-called mainstream universities that rely on TONS of taxpayer dollars???

Cui bono?

NickelthroweR
NickelthroweR

Greetings,

I am dating a woman that is attending one of these Klown Institutions. She knows that she is obtaining zero value from this “school” and if she does the minimum amount of work required she will earn her A. She does this because the STATE demands that she have a degree in order to do work that really doesn’t require any education at all. After all, here in California, you can not braid hair or paint toe nails without a license from the STATE. If I remember correctly, there are more than 800 different jobs that the STATE demands a license for.

Lysander
Lysander

I attended Budweiser University and graduated with honors. I partied, got laid a lot and had a good time. Some say I pissed my money away, but today I’m doing as well as most of my compadres who attended other colleges.

kokoda
kokoda

If any of these are full-time students, they are not counted as unemployed. Another Bonus for Obama.

Dutchman
Dutchman

@Nickel: Case in point – my wife who has degrees in psychology and human development.

When we were first married she was a social worker (back in 1972). Around 1980 she became a mother / homemaker. In 2000 she wanted to ‘go back to work’. Well the colleges and the government have worked hand in hand to make sure you need all sorts of certificates – college diplomas aren’t enough. My wife said “OK – I’ll get one of the certs – I have a lot of the credits already”. The final kick in the balls was that they told her that her Penn State college credits were “too old”. They wanted her to take math and chem over again! And this is for a social work job.

bb

Nicholas , don’t marry this gal.Trust me.

Discover more from The Burning Platform

Subscribe now to keep reading and get access to the full archive.

Continue reading