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 648  user Comments for “Federal Probe Targets ITT Tech”
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| 3/7/04: Anonymous says: |
They probably got raided because they might have been writing viruses. They get together and write them. |
| 3/7/04: Anonymous says: |
If they got rid of braindumps then the companies offering certification will lose $$$$$ millions of dollars as test takers throw in the towel. Back to old days of just a tiny elite few with hardly anyone doing certs. |
| 3/8/04: Anonymous from Arizona says: |
In two weeks, I begin teaching at ITT for the first time. I am not an educator, I don't have a degree in teaching, I am an "in the trenches" IT professional who enjoys teaching and passing on knowledge from almost 18 years in the biz. I will see what my thoughts are in 12 weeks, but I already have a couple of observations. I noticed what already appears to be a lot of "school politics", everyone has their little territory and defends it with barely concealed teeth. It seems to concern everyone in the administration side (more, I think, than the actual teachers) that they be addressed with the proper honorific (doctor, dean, etc). This I saw at the universities, and was saddened to see it at a private college whose niche should be "education without bull****". I am not sure that ITT fits that, and so far I've been more impressed with the local community college than anything else. In my teacher training at ITT (all 30 minutes of it) it was emphasized "this is a for profit corporation" and "if you scare away the students, you won't be invited to come back" (I am adjunct faculty, only teaching 1 class in addition to my "real" job). I was also told that "anything I develop for the course belongs to ITT" as a work for hire. OK, so far, not great but not unexpected, right? Here's the kicker... They are paying me HALF of what the local (underfunded) community college pays! Not that I am teaching for the money, that's just a measure of respect for my skills which they don't seem to have. OK, it's my first time teaching, they don't know what I can do. Neither did the CC. To be fair, also, the 30 minutes of teacher training I got at ITT was 25 minutes more than at the CC - oh well, there's nothing like sink-or-swim teaching! OK, otherwise, I have to agree that ITT students are not impressive in their knowledge. As someone who has hired a number of entry level employees, I do not look at education (from ANY school) as more than a certificate in stubbornness. If they are able to stick with something for 2-4 years, that's a large notch in their favor. If they actually know something, that gets them a job. I consider it my job as a teacher to get the students ready for that work, but the students have to want it. If all they want is to pass a class and get a piece of paper, no matter how good of a teacher I am, I can't help them. How good are the other teachers at the school? I will know in 12 weeks... |
| 3/8/04: Anonymous from Knoxville says: |
I am currently a fifth quarter student in the CNS program at ITT Tech Knoxville. This school is an absolute joke and a fraud. They talk a good game just to get your name on the dotted line (I suggest you never sign).Why don't i quit you might ask? I have nine months left and am so far in debt for this so called "Higher Education" and quitting at this point in the game would'nt do my any good although i am wondering what good it will do me if i stay? If i'm lucky i might find a job that pays $20k a year or so a teacher at the school says so. The Dean of the school thinks he is some bad ass dictator in front of everyone. Although a little more tolerable in private. The teachers are freaking laughable literally (most of them). I personally have had two teachers teach my class (Intro to VB & Win 2000 Pro) and were gone after the quarter was up due to the fact that they sucked so bad that even the ITT morons had to let them go. Did i get my money back from those classes? Of course not, i know for a fact that they went ahead and passed 90% of the VB class because i know i did not learn much at all. My problem with that is, what about the classes that these were prerequisites for? It makes it a little hard to pass the next class (VB & GUI Applications) when you don't know jack about VB due to the last class that i somehow passed. Not to mention a Math teacher (another newbie off the street) i had, he acted as if it would kill him to help with problems etc.. so i ended up dropping that class so i have to take it again which will add $1000 to my already $34k bill. ITT Tech Knoxvile has a turn over rate like McDonalds. I heard today that the Program Chair for CNS has quit. I could go on, from Financial Aid to the cheap ass NIIT books that are not worth a crap. If i had it all to do over again, i would have never inquired. I would have went to a community college that is roughly $28k cheaper. Need i say more, i am glad to see that i am not the only one that sees how ITT Tech scams people. |
| 3/8/04: Melanie Coomes from Newburgh, Indiana says: |
I am an ITT graduate, with honors..not that it means much. I have been trying for two years to find someone who will listen about the fraud and deception going on in that corporation. (I refuse to call it a school.) Like the Texan above, I was too far in debt to the company to quit. I attended a community college for two years, so I have a basis to know what a REAL school should offer. The fall of the giant is soon, I hope. |
| 3/8/04: Don from Washington says: |
I would like to thank all of you who have posted here, I will not be attending ITT because of your suffering. These schools should be ashamed of themselves, taking our hard earned money and promising things they cannot give. You have saved me a huge headache and I thank u all. You should start a civil action lawsuit against them. |
| 3/8/04: Anonymous says: |
Just get a real degree from a university or college like Harvard, Yale or Oxford. Stop wasting time with your little certs or dodgy diplomas from institutions like ITT and the like. When will you all realise that 2nd best is still 2nd best regardless of where you get your 2nd rate education. |
| 3/9/04: Anonymous says: |
What a bunch of cry babies. Everyone is crying about something they could have discussed at an earlier, more appropriate time. I know that intelligent people don't throw good money after bad (if it was indeed bad to begin with). So, has the money really not been wasted or are these whiners just stupid. The one in Knoxville can't even write a simple letter without showing his ignorance. The Arizona person evidently has no ethics. He carps about an employer before he even starts. Why would he take a position that he has no respect for unless he also has no respect for himself. Studies have shown that people think they havn't learned from an institution only to be made aware later of the fact that they have indeed grown dramatically. Additionally, many people are so egotistical that they feel all their learning is self-taught. I'm sure that Glen in Virginia fits in this type of mold. It's too bad ITT didn't do a pre-enrollment comprehensive test and then a post-enrollment comprehensive test. Had weeping Glen been subjected to the humility that those tests would show he would now be "Gushing Glen", gushing his great thanks to ITT. The fact is that education is expensive everywhere and great things don't happen to ordinary people. If these sad-sacks would take a real introspective look at this they would know that the only ones to blame are themselves and the efforts they put into their education. So, stop crying and use whatever you allowed ITT to impart, on you, to better your station in life. By getting your education you have vastly improved you chances for success in this life. Use an attitude of positiveness to propel yourselves upward. |
| 3/9/04: Anonymous from VA says: |
Graduated B.S. TCT Hayward, CA in 2000 and A.S EET Tampa, FL 1997. I have to say you get what you put into it. My experience towards ITT has been positive. I have had no issue finding jobs because of lack knowledge. After graduating in 1997 with my EET. I moved out to Silcon Valley. Without the theory I learned I wouldn't of been able to pass interviewer's questions. I have work as 2yrs as RF Microwve tech. 2yrs as Manufacturing tech and the last 5 yrs in networking and Telecom. I have worked as NOC tech, Field Support Engineer, and now an Officer in the military. |
| 3/9/04: Gregory from Little Rock Arkansas says: |
I am a ITT Tech graduate I was told I will get a job make 30,000yr and no less but we all know the store before I grad. I had to sign a note it said ITT do not guarantee you a job. I have been looking for a job for a year and no luck I have classmate who have the same problem as me the career woman help people who she like and the rest she since them to temp. service who is only pay 8.30hr ITT Tech is a joke ITT tell you two year of your life is about this long - but how about the 10 year of loan money you get to paid by. |
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