Federal Probe Targets ITT Tech
3/2/2004 -- Classes are back to normal at ITT Technical Institute campuses across the country after federal agents raided the company's headquarters and 10 of its campuses last week in response to grand jury subpoenas and search warrants seeking various enrollment data.
Last Wednesday, agents searched ITT's Indianapolis, Indiana headquarters and 10 schools, including campuses in California, Nevada, Texas, Florida, Oregon and Louisiana. The grand jury subpoenas that triggered the searches were issued by a U.S. District Court in Houston, and sought data on student placement, retention, attendance and grades, along with recruitment and admissions materials, graduate salaries, and transfers of credits to other schools.
Classes were cancelled for the day at the targeted campuses, and students, faculty and staff were questioned. In a statement, a U.S. attorney in Houston did not give a reason for the raids. No charges have been brought against the company.
ITT spokeswoman Nancy Brown said today that the probe won't affect current ITT students, and will have no effect on anyone holding a degree from any ITT Tech school. "All the colleges are open and functioning perfectly normally," she added.
At an investor conference call this morning, ITT's chairman and CEO, Rene R. Champagne said he believes the company has had strong internal controls and that the investigation "will show that we're in compliance." Analysts who focus on the education market said the probe might be related to Title IV, a federal regulation that requires education companies to report certain student data related to federal low-income grants to states. According to company regulatory filings, about 68 percent of ITT's 2003 revenue came from federal education aid programs.
The federal raids immediately affected the company's stock, which fell from last week's high in the mid-50s to a low of $34.50 last Thursday. ITT Educational Services Inc. trades on the New York Stock Exchange under the symbol "ESI." News of the probe also affected the entire for-profit education sector, whose shares tend to fluctuate as a group. ITT was trading around $35 a share by mid-week this week, and the remaining stocks in the sector had largely returned to their pre-probe numbers. "In light of the pending federal grand jury investigation of the company and resulting shareholder class action lawsuits," Champagne said during Wednesday's conference call with shareholders, "the company is not able to confirm the internal goals and other projections for the Company's 2004 fiscal year that were previously disclosed by the company."
The dramatic drop in stock prices triggered several class action lawsuits by investors late last week - a common practice when a stock price drops substantially. The lawsuits claim the company artificially maintained or inflated its stock price by issuing false facts or omitting other pertinent ones.
ITT, with some 75 locations in 30 states, is the largest operator in the U.S. of post-secondary school technical education. It offers technology-based associate, bachelor and masters degrees in a variety of subjects, including computer programming, Web development, and engineering, to over 37,000 students. It also offers online education. According to the U.S. Department of Education, ITT granted nearly 15 percent of the total number of associate and bachelor degrees awarded in the U.S. in electronics and electronics-related programs in the 2000-2001 school year, the largest percentage of any single institution.  -Linda Briggs
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There are 166  user Comments for “Federal Probe Targets ITT Tech”
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| 4/19/04: oscar from california says: |
I'm eroll for june 2004 class and I signed the financial Aid paper work, I want to back up can I still do it without paying anything since I haven't attended classes yet.? |
| 4/20/04: David says: |
Do not attend any classes and you will be fine. Once you attend one class you have paid for it. You will of course lose your $100 enrollment fee, which who cares right, it's better than losing $35k. |
| 4/20/04: Anonymous says: |
Yes, you can get out of going, all you have to do is call and cancel, tell your Admin Rep that you have investigated the school and that you chose not to attend, they CANNOT force you to start, even though you have all the Financial Aid paper work done, if they say they cannot cancel it at this point, then you can call the US Dept of Education and report them for fraud. I know this because I work for ITT |
| 4/22/04: Anonymous from Tampa, Florida says: |
Formerly part of recruiting for ITT. If you guys actually think your degree is worth anything you are defintely fooling yourself. Do yourself a favor and get a real degree. |
| 4/23/04: Not an ITT grad says: |
Well, geez people, the "3 Year Bachelor's Degree" should've been a tip-off. There's a reason that the majority of real colleges have 4 year degrees. That's how long it takes ... 4 years .... to cover all the subjects necessary according to the accreditation standards. Shortcuts only hurt you in the long run. Check out a local 2 year Tech school if you're in such a hurry. The classes are geared towards getting a job, not just a piece of paper. |
| 4/23/04: Anonymous says: |
I am a current ITT student and feel it is overpriced. My only complaint is the NIIT books.... However, YOU GET WHAT YOU PUT into ITT. When I walked into ITT 3 years ago; I did not know ANYTHING about computers. 3 years later I have a management position in IT. I was lied to by the recruiters like everyone else; but I could sense that they were lying. I knew I needed an education and ITT had the most well rounded program available at the time. I got my first job the 3rd quarter of my program (CNS at the time) and boy was it LOW PAYING. I felt disillusioned with my education, but I never stopped working hard to learn the most I can. That first job helped me learn what I needed to learn in order to grow in the “IT” field. Three quarters later I got in with the company I am with now and got promoted to management a year later. I will say that I know I did not learn everything I should have from ITT; however, ITT helped to get my foot in the door to both jobs I got. I graduated from the CNS program last year and am now continuing my education to get a Bachelors degree. Sure ITT is not the best school out there, but it is not the worst either. I have heard similar complaints from schools like WESTWOOD COLLEGE, DEVRY and even the UNIVERSITY OF SAN FRANCISCO. THE BOTTOM LINE is all schools are in BUSINESS to MAKE A PROFIT. Some UNIVERSITIES have a great REPUTATION (HARVARD, BERKLEY, YALE, MIT ETC) and that alone will get you just about any job. But do not kid yourself. Getting into one of those schools is VERY DIFFICULT. IF you got the grades in High School;, go to the best University you can get into. DON’T GO TO ITT or ANY TECH SCHOOL. ITT is a place where adults can get an education and still have a fulltime job while attending. IT IS NOT what the RECRUITERS PROMISE; however, it can work for you if you put all your effort into it. ITT is definitely not what they advertise in all those commercials. However, ITT is BETTER than NO EDUCATION. If you are considering going to ITT you need to access your personal situation to determine if ITT is right for you. ITT is not right for everyone and it is not a quick fix. I am bitter against ITT just like many of you are. However, I think it is wrong to discourage anyone from pursuing a degree because of your own bad experiences. If you are thinking of going to school, do the research and select the school that best fits your situation. |
| 4/26/04: Luke Current ITT Student from Dallas, Tx says: |
The Dallas or Richardson location is as big a joke as any in the country. The NIIT books are complete trash and many of our instructors agree. My biggest complaint is that we were told the cost is about $30-35K for 2 years. I get Pell Grants among other things but I cant see the cost being affected by this. In fact, I believe our loans are processed before grants are factored in and the grant money doesnt seem to be applies to any of my loans. Strange to me. Avoid ITT like the plague. |
| 4/26/04: Anonymous from Illinois says: |
Mr. Sisk sucks ass!! |
| 4/27/04: Gary Riddle from Temecula says: |
ITT Tech is a joke. A complete waste of time. The teachers did not what they were teaching at all. In matter of fact a teacher of mine said "They wanted me to teach tech classes and I am a economics teacher, they said it didint matter, just give the students a lab and let them mess around for the remainder of the peiod" another one of my teachers stated on the first day of class "I dont know anyhting about this subject, I am going to be learning with you". The picture I got was students with financial aid were better of passing, almost guaranteed. I paid cash for the school, I took 2 quarters of in pursuit of a better career. Collectors called me to collect my remaining balance of $1600 dollars, I paid for my entire schooling cash...so, doesnt that sound un professional. Itt tech was a dissapointment, I feel like I wasted time and money. In matter of fact many tech pro's stated they would never hire an Itt tech student. |
| 4/27/04: For-Profit-Escapee from Minnesota says: |
I taught for several expensive for-profit schools and found that the theme (profit) was the same for both, but the quality varied hugely. The Art Institute, while expensive, put value into their students, employees and equipment. High-Tech-Institute was comparable to the worst of the complaints seen here (manipulation of grades, heavy investment into the sales staff, some extremely unqualified instructors, ego-centric directors, male-oriented promotion...blah, blah, blah.)The proliferation of for-profit education rose with the boom in technology and should fall with the drop in demand for IT professionals. Employers are no longer looking for warm bodies, but educated and experienced individuals. There are some very cost-effective ways to achieve the requirements that employers are looking for in their entry-level IT employees (believe me, you are not going to make $45,000 right out of the graduation door - be willing to accept an entry-level salary $24,000 - $35,000 depending on the type of position.) Take a look at your local community and technical colleges, there are many AAS or AS degree programs out there. Combine that program with the hands-on training and certification courses from those college's continuing education programs - get the base-level certifications while obtaining your two-year degree (CompTIA's Aplus, Network plus,and Security plus, an MCP - DO NOT go for an MCSE, CCNA, - don't go overboard - for entry-level 4 or 5 certs will be more than sufficient and most of the courses provide excellent hands-on training - look for the number of hours in the course - hint for those looking at Help Desk or Desktop support, don't forget the Office applications and the MOS training and certs.)You can often get the degree and all of the above certs for less than half of what you would pay at a for-profit school and the instructors of both the credited and non-credit (continuing edcuation)classes are required to have proven competencies, degrees, certifications and experience (unlike the requirements for instructors at some private, for-profit schools.) After your two years of hard work, or during it - depending on your time and commitment level, volunteer to obtain experience (the number-one hiring requirement.) There are many good programs out there for volunteer work (techcorps.org being one.)The most important thing for anyone looking for a technical education to remember is - YOU ARE NOT CATTLE! Do not allow yourself to be swayed by a slick marketing campaign or sales pitch. Ask for real and verified numbers, find graduates to talk to, check out all the options in your region, ask for and compare the advice from both the private and non-profit institutions (state community and technical colleges)talk with the intructors - DO YOUR RESEARCH. |
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