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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| 3/18/04: Chris from Providence says: |
Listen up!!! ITT Tech confirmed me that I would be getting two grants to go to school in the late 80's after talking with a counselor and going through all the motions. I paid for sitting fees and books, I took the pre tests, then 1 week before school was going to start, I received a call stating that ITT Tech had made a mistake and that I wasn't going to get my grants, keep in mind that it was a 3 month process before I attended the pre tests! This blew my mind! They wouldn't even give me my money back! Please don't deal with this school, they are a rip off and very unprofessional, don't make the mistake of attending ITT, I was so discourage, it took me a long time to forget it, after reading these posts, the horror is re-lived. I went through some BS with them. trying to get my money back, what a shame, they didn't care and I went to another scholl a few yrs later when I could afford it. I've met others through the yrs who also had problems with ITT, frankly, I don't know how they are still around, pass it around, ITT sucks! Don't go there, you will be disappointed! |
| 3/18/04: jessi from ft. lauderdale florida says: |
i have a problem.. im a senior in high school and i have already signed everything to start at ITT tech June 14.. now im not sure if i want to go.. all of the things you are saying is making me not want to go there.. i dont know if i can get out of it now but i am going to try. please post or email me with some info if you can help me. |
| 3/18/04: Wambulance says: |
Well, judging from the spelling in most of you ITT students, I would definitely say the ITT sucks as a school. You guys aren’t even smart enough to do a spell check on your posts. And for those of you who aren’t that smart, cut and paste from a word editor. If you had done your research before signing on the dotted line: 1.) You would have found out that pay and salary for grads is way off scale. 2.) You would have talked to students at the campus about the school, and found out that it was a scam. SO JUST STOP COMPLAINING AND SUCK IT UP. WELCOME TO THE REAL WORLD |
| 3/18/04: Anonymous says: |
There are what, 15 people here complaining about ITT? Any idea how many students they graduate each year? The number is 20,000+ from 77 different schools. Jessi: do your homework. Go to the school and ask questions...don't be afraid to ask the hard questions about the teachers you'll have and the classes. Ask to see the placement and starting salary statistics...see them, don't let them just tell you some BS. |
| 3/18/04: Earl from Denver says: |
From an IT pro with years in the field, used to teach in public schools, and more certifications than I can count on both hands. To JESSI from FT. Lauderdale - GUT CHECK. You know in your heart this isn't right. Follow your heart. Just tell them you have changed your mind and enroll in a local college or university. Start building a home network and follow the advice of some of the other people earlier in the postings about lab construction. There are some good observations and some that I question here. I believe the real issue is this. Those who attend ITT, Devry, etc.. are looking to make a quick education followed by a quick buck. We avoid people like that in our business. You may get an interview, but it is easy to see through the lack of education you get in those programs. To those who go to college or university, you had better know your stuff. Just because you went to an Ivy league school and think you know it all does not mean you do. KNOW YOUR FIELD. Most people seem to go through life not really caring if you learn, but rather if you get the grade. This is called the path of least resistance. Understand the grade should be a result of how much you know and not how much you psyched out the teacher. Frankly, most educators would rather pass you than fail you. It is a lot harder to "sell" an F to your parents, students and administration than an "A" because that holds the teacher more accountable. Easier to give an A and get the idiot out of your class. I never did that when I taught, but I know some who did. I stuck to my guns but got tired of the bull associated. Please whine all you want, but realize this. You have the power to change it. You do not have to go to ITT if you are enrolled now or plan to. For those of you who have already went through, I am sorry you had the experience, but based on what I keep reading it sounds like most of you at the start were hearing "too good to be true" stories from the start. Remember this: Fool me once, shame on you. Fool me twice, shame on me. Don't be a fool. Educate yourself on the school before any commitments. If you were going to have a house built or someone do body work on your damaged car, wouldn't you want to see direct results and testimonials from past customers? Do the same with your education. I believe education is the most important investment you can make, but even then, some commitments are stronger than others! |
| 3/18/04: Tony says: |
I feel the pain that all of you students at ITT are going through. I have never attended ITT although I considered it when I lost my job after 18 years. I chose to attend an IT school in Brooklyn, NY that promised everything but heaven itself. A recruiter told me that with an A plus certification I would not earn too much money, only $45000 per year for an entry-level job, but with MSCE I would make nearly a six-figure income in no time. I enrolled in the school to much dismay. I was attacked by a fellow student just one month later. A student attacked a teacher and a financial aid advisor. The instructors oftentimes lost control of his students making learning very difficult. Furthermore, the exams were so incredibly easy that failing them was actually difficult. Moreover, we were always given a copy of the actual exam a few days prior to us actually taking the exam. So it was no wonder why I was always able to complete the exam in just minutes! It was no wonder why the school boasted that nearly 100% of its students passed every course. Finally, the school bragged about its 90% job-placement success rate. I must say, I still keep in contact with many of the students and not one of them has an IT job, not one! One friend in particular former student is a taxi-driver. He graduated with a 4.00 GPA. How about placement? Well they send me notices every week. They send me notices that I see in the local newspapers and on internet. Not only that, they send me porter and housekeeping jobs which pay $6.00 per hour! So here I am with a student loan 1 year after I graduated and no job. The moral, please stay away from these technical schools and go to college! Please do not take any short cuts. In the long run, these schools will take the money and run; leaving you high and dry. |
| 3/18/04: Melody Akins from Richardson, Texas says: |
I am a 59-year-old female mid-life career-changer (38 years on the stay-at-home-mommy track). I'm a first-quarter CEET (computer & electronics engineering technology) night school student at ITT Tech's Richardson, Texas campus. I'm a 'sandwiched' great-grandma, with an invalid mother, disabled husband, and youngest-of-five daughter to support. We're surviving on two Social Security checks, and living in my mother's home. She has leukemia, and when she decides to shed her walking-around suit, unless I have a good job, we're on the street or living with one of my four grown kids. Not acceptable. Why ITT and not DeVry or one of our excellent local community colleges? (1) The ITT Tech campus is almost within walking distance, which is vital because I must leave campus during one of the breaks, go home and put my mom to bed, and get back to school within 20 minutes. (2)I could get Federal financial aid,(3) I passed their (admittedly simple) entrance exam, and (4) since I have adult attention deficit disorder, online learning is too easy to avoid :) In order to hold myself accountable for the material offered, I need the structured, instructor-led learning environment that ITT Tech offers. So far our CEET class of nearly 30 students appears for the most part to be intelligent, articulate, and motivated. The instructors so far have seemed as much on top of things as any teachers are, and more so than some I've encountered. We are all responsible for learning, and we'll hold the instructors accountable for teaching -- all 30 or so of us! What happens on the corporate greedy-guts level, has very little influence on the local campus. The CEET instructors are all degreed (BSEE or better), seasoned professionals who know much more than we will need to learn to enter the workforce as new technicians. Anyone who lives in the Dallas County, Texas area knows that the IT and engineering job market here is tight. Certification is mandatory for even an entry-level job. I'm sure that many of us will pursue relevant certifications on our own; I know I will, and I know that this will require mastery of material that is not available under the educational rubric "trade school." However, because the classes are taught by people who have been employed in the 'real world' of business, I'm not worried that we will fail to be taught what we need. It's up to us to learn. |
| 3/19/04: ESL from Washington State says: |
ITT Tech. Wow! I hate to say I was sold, but perhaps it was my recent retirement that held me blind to believing that ITT Tech could do what they say. When I had to sign that "no guarantee" clause, my instincts told me it was a fraud, but I gave it a try. Four a year, I gave ITT Tech the benefit of the doubt. I must say that two of my colleagues have moved on with jobs in the Networking industry, however, they were among the top students in the class and one of them brought the other in. We helped each other out because for awhile I ran my own networking business and helped my friend, the one who brought the other into his new job, get the experience needed in networking. It also helped him that he "moved up" from stockboy to an IT position because he knew people. He now heads the IT department and was able to bring in our younger friend. We were the top students in the class. I held the highest GPA for that year...a 4.0 before I decided to leave. I was doing fine in my networking and financially I was stable anyway. I made my decision based on the fact that there were other students who flat out failed every class...every course and were still allowed to continue their education. I no longer had any doubt...they were all about the money. ITT has no pride in their final product, which should ultimately be the student. With them, I have no question that they are only there to take your hard earned money. No one else in the class ever did get a job especially since the IT and Networking Industries bottoms fell out. Look at all the layoffs. Do you really think that all those "experienced" professionals are going to be passed over for a new graduate? I think not. In fact, there was such a huge layoff that those "experienced" professionals were taking jobs with major cutbacks in their pay. No....I am not crying. I am glad I chose to leave. The Dean begged me to stay. He recognized my 4.0 GPA, but seriously, at MIT I would have had a much harder time. ITT was not the least challenging. And let's face it, if a CEO is looking for people who can handle the stress of our technological advances, he will not look at ITT Tech Grads. For monkey work....sure. "Here are the blueprints, now put the network together". The company will pay you less than 30K a year. There are those who are the exception, however, but that has nothing to do with them graduating from ITT Tech. In fact, I have met "self-taught" technicians who have become wonders at thier trade...here in Washington...at Microsoft...many of these "tech dudes" don't even have a degree. Think about it, Bill Gates doesn't really have a degree in the field he created. ITT Tech is simply lucky to receive those gifted, hard working individuals who were unfortunate enough to start life a little late. The bottom line is you will waste your time and money with ITT Tech. Go get certified in Microsoft products and gain some experience on your own like my friends did. You'll go further. Good Luck. |
| 3/19/04: Mike from Dayton, OH says: |
To Jason - Several of the posts mention having continued their education at another institution and being satisfied. Your argument is not valid. To Wambulance - When criticizing any skill, or lack thereof, you may want to make sure your post doesn't contain similar errors. I'm amazed at the number of people attacking those that were taken advantage of and trying to warn others. Should they have done more research? Absolutely. But is this a reason to attack them and make uninformed generalizations about them? I don't think so. From what I can see, these people were trying to move themselves forward in their lives and had their ignorance taken advantage of. We've all been taken advantage of at some point in our lives, so we shouldn't hold ourselves in such a pious manner. The people you are criticizing are trying to warn others against a situation that may be harmful to their futures, not just whining about their past mistakes. |
| 3/19/04: Anonymous says: |
I must stand up and take a bow to the lady that has gone back to school while tackling her home life at the same time. I am glad that you are having a good experience with ITT Tech, but you have just started, being a 1st quarter student. I don't want to tell you what to do but i would quit while i was ahead. I like many others are to far in to turn back, i dread the day my payments start rolling in because i have'nt got a clue how i will make the payments. Hopefully you have a good ITT Tech there in Texas. I actually have a few good teachers this quarter (6th Quarter) and if all the teachers were at their level, the school would be churning out top notch IT workers. Problem is, there is only a handful of qualified teachers at the school. Maybe five? Good Luck and God Bless! |
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