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 628  user Comments for “Federal Probe Targets ITT Tech”
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| 3/9/04: Jen from South Carolina says: |
I agree with alot of the comments. I have put ALOT into my education and I am not being a "cry baby". My teachers are not what was promised in the beginning. They are not the professionals in the field I was told I would have. Some of them had very minimum experience on the subjects and programs they taught. I felt scammed. After being in for several quarters I learned my credits would not transfer to local tech schools. I feel I have been seriously cheated and there is no recourse. ITT does not take responsibility. It seems to be a business to make money, not enhance our careers. After waiting several years to return to school I realize I have made a terrible mistake that will cause financial sacrifice for my family for many years. I can't recommend this school to anyone! |
| 3/9/04: robbed without a gun from indianapolis says: |
itt is a joke i went for two years. The teachers are a joke, job placemet is a fraud ,they have the same jobs in the employement book from five years ago .if itt charges 20000 for an education they should at least get good teachers.Ithougt i was the only one who felt i was robbed.eet is a joke .how about a class action suit!!!!!!!!!! |
| 3/9/04: Darin from California says: |
I was opting for ITT Tech over Heald, but after reading the forum, I am changing my outlook of the college. It seems that all of my information was most likely false. |
| 3/10/04: Anonymous says: |
Both ITT and Certification is worthless. Enroll in a recognized college. Get yourself a Degree in Computer Science and be taken seriously for the professional that you will become. |
| 3/10/04: Anonymous says: |
Agreed........ |
| 3/10/04: Grand Rapids from Michigan says: |
I was a firm believer that you get out what you put into an education, and guess to a certain extent still do but ITT is the exception to that rule. I also believe that with the exception of one instructor, I would have been better off just buying the books and learning it on my own. Unfortunately, it would seem that the paper that the degree is printed on is more valuable than the degree itself. I can’t help but feel bitter about all the wasted time and money, and now hope that ITT gets a real wakeup call and starts providing students with and education at least equal to what they are paying. It’s too late for those of us that are already through it, but ITT shouldn’t be allowed to continue stealing from students and their families anymore. ITT should now be forced to stand up and be accountable for their misconduct. |
| 3/10/04: Rob from Huntington Beach, CA says: |
Don't assume that any degree by itself will make you the best employee for the job. According to the U.S. Dept. of Labor the average Systems Engineer (without a degree) makes more money per year than the average holder of a masters degree. While ITT Tech may not be the school to choose, I can recommend one in Palmdale, CA that is. I credit my hard work, and their instruction and guidance for where I am today. Thank you ACC. |
| 3/10/04: Anonymous says: |
To Anonymous calling us "Cry Babies": It would seem from your comments that you have never attended an ITT campus. Do you really believe it is a coincidence all these people are talking about the same types of problems? I do not think so. I am a firm believer that you get out, what you put in. ITT does not care what type of education you recieve, all they care about is thier bottom line, "Bring in that Money". They sell themselves as a wonderful school full of qualified teachers when in fact they will hire people off the street that literally read from the book and have basic knowledge of the subject. There is no excuse for this type of behaviour when students are dishing out $34,000.00 for two years of "Higher Education" when in fact you recieve a subpar education. I believe ITT should be investigated further, many people and their famalies are in a financial woes because of ITT Tech. I am not saying education should be free but when it comes with a price tag as high as ITT Tech's, the education should be top notch and regulated. The teachers should be of the highest caliber and not someone that can fill a seat. |
| 3/10/04: Darby Weaver from Orlando says: |
OK. Here it goes... I have not worked for ITT, but I recall my wife taking an assessment test in math and feeling she did poorly since she could barely understand the higher level math questions. They said she passed at the ninety-percentile range. We decided something was wrong then and there. ---------------------------------------------- Several years later, I have taught for International Acedemy of Design and Technology and another institution. My findings have been that the students use their GPA to manipulate the Administration to force the faculty to "fix the books" as far as grades go. ---------------------------------------------- The game is retention. A student who is not passing is not paying if he or she does not qualify for the financial aid. ---------------------------------------------- ******************************************** ---------------------------------------------- At my orientation, the numbers were something like a 30,000 - 36,000 paying student for two years had a value of over $1,000,000 at graduation. I don't know how they got that figure, but that's what the dean said (Nancy). --------------------------------------------- 00000000000000000000000000000000000000000000 ---------------------------------------------- Several students complained about the quality of the instruction. Admittedly it was my first gig as an instructor, and I left a lot to be desired. However, the shadow that looms over these schools is clear... --------------------------------------------- Get those who are not educated, are imigrants, career-changers, and those who are around or below the poverty line. Admissions are simply - Do you qualify for aid? ----------------------------------------------- It is simply a money racket. ----------------------------------------------- A student is a peg worth a dollar figure. ----------------------------------------------- Most of the faculty met tried to be professional and even cared about their students, but the fact remained that passing students qualified for aid and that is how the bills get paid. ---------------------------------------- Buyer Beware! ---------------------- If someone knows this to be different. I really hpe it is true. But the stories I've read today are what my personal experience reflect as well. ------------------------------------------------ I taught two classes there. I hope someone reforms these schools. ----------------------------------------------- Promises of 50,000 to 70,000 jobs when skilled professionals are working for 35 to 55k. |
| 3/10/04: Anonymous says: |
And to those who do not know, there is an assesment test you have to take before attending ITT Tech. I was told i passed and that 85% of people fail the assesment their first time. Was i allowed to see this test? Of course not. They then sent me straight to financial aid to sign all the paper work. |
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