The Cautionary Tale of ITT Tech

I’ve talked about measuring outcomes before, but the recent news about the closure of ITT Tech only reinforces my belief in the critical importance of knowing, and proving, the value of an education.

The Department of Education (DOE) did not specifically shut ITT Tech down. It did, however, withdraw all federal student loans from students who attended the institution. Without access to that revenue, ITT had to close its doors.

The reasoning of the DOE behind withdrawing student loan support was that ITT did not provide enough value for the taxpayer’s investment. According to U.S. Secretary of Education John B. King Jr., the DOE began scrutinizing ITT more closely due to “significant concerns about ITT’s administrative capacity, organizational integrity, financial viability, and ability to serve students.” That pretty much covers every aspect of education!

This news has obviously made waves throughout the higher education world, but I worry that the non-profit schools are not learning the lessons inherent in this decision. While many of the reactions I have seen from non-profits seem to think something like this could never happen to them, I think there is a cautionary tale for all of us in the rise, and fall, of ITT Tech.

Proving Value

While it is easy to look at a school like ITT Tech and think its low ROI is obvious, the closure points to a larger conversation happening around higher education: how, and why, to prove the value of a degree.

I have both an undergraduate and a graduate degree. Education has always been an important part of my life, and is something I am committed to for my own children, as well.

But I don’t think that the mere act of going to college is the definition of “education.” What you learn, and why, is even more important. For decades, colleges and universities have raised tuition and students have taken out massive amounts of loans, both federally backed and private. Now, schools are facing increasing scrutiny over the value of the degrees they provide.

It began with the for-profits, like University of Phoenix, but the conversation has expanded to non-profits. Students (and the government) want to know that their investment will be worth it.

So what does “worth it” mean? Well, in this case, it’s that students are learning skills that can help them get a job in their desired field. At the same time, the cost needs to be reasonable and appropriate — going $100,000 into debt for a low-paying career will have a lower ROI than a program that costs only $10,000.

Developing A Formal System

Of course, proving that ROI is difficult. This is where accreditation comes into play; schools that are regionally accredited have to prove their quality more rigorously than those schools that are nationally accredited (such as ITT Tech) or that aren’t accredited at all.

I challenge accreditors to expand their purview and begin to look at outcomes as well as course development and delivery in the accreditation process. The structure of accreditation already exists, so it should not be difficult to add outcomes as a variable in the accreditation process. Accreditors could look at things like:

• Average amount of debt at graduation
• How long it takes to pay that debt back
• How many students get a job in their field after graduation
• How long it takes students to get a job in their field after graduation
• How many students go on to graduate school or switch fields entirely

This will require significantly more tracking of graduates on the part of schools, but once the system is in place, it should not be difficult to do. Right now schools don’t see the point in investing time or effort into developing the infrastructure to track outcomes, but with it becoming a factor in accreditation, that motivation will be stronger.

The Evolving World of Education

“But Todd,” I can hear you saying, “Haven’t you been talking about how education is changing away from the traditional four-year model?” Well, yes. That’s true. I do strongly believe that the future will consist of a blend of both traditional education and alternative credentials, such as microdegrees, bootcamps and even MOOCs.

That means proving ROI will be even more important than before. The EQUIP initiative is already beginning to take steps to ensure the quality of these new kinds of education. However, as I pointed out, some of the third-party quality assurance partners are potentially not as unbiased as they could be. Ultimately, I think, it would behoove colleges and universities to start folding these alternate forms of education into their mission, using their own quality standards to ensure that best practices are being followed and students are seeing the outcomes they need for career success.

Lessons Learned

ITT Tech is not the only for-profit school that has been under significant scrutiny from the Department of Education, and it’s not the first to go out of business. The bigger schools, such as Phoenix, are taking steps to ensure the same doesn’t happen to them.

But I caution all those in higher education to consider the broader implications of this decision. The federal government is willing to use its monetary influence in higher education, and is proving itself unwilling to fund educations that it deems of poor quality or predatory. While I know every school prides itself on its academic achievements, the schools that will succeed will be able to prove that their education is of high quality and that they provide the outcomes students want. Those that invest time and resources now into proving ROI will have a competitive advantage in the future, when the spotlight turns to non-profit institutions.