The Beginning of the End?

August 2016 ConsumerReports

The news today is dominated by the shutdown of ITT Tech, a for-profit college with 40,000 students. This is heart-breaking news for the students who trusted ITT with their education and their money.

Two weeks ago, the Education Department said ITT would no longer be allowed to enroll new students who rely on federal loans and grants. In 2015, ITT earned $850 million in total revenue. $580 million was sourced from federal aid. This decision by the Education Department caused a downward spiral for the school which is was not able to recover.

The final deathblow was caused by Education Department officials demanding that the company provide a letter of credit from a bank for $247 million (an increase of $123 million from the letter of credit ITT already had on file). This letter would protect students and taxpayers if the school was unable to cover federal student-aid liabilities. ITT could not secure the additional credit.

The beginning of a crackdown

The Education Department is beginning to scrutinize what schools promise their students and hold them accountable.

Is this the beginning of the end of predatory for-profit schools that over-promise and under-deliver? I certainly hope so.

ITT said its schools have helped “hundreds of thousands of non-traditional and underserved students improve their lives through career-focused technical education.”

Here are some facts about ITT

• In May the Securities and Exchange Commission filed civil fraud charges against the company for allegedly making false and misleading statements about the failure of two in-house student-loan programs.
• The Consumer Financial Protection Bureau filed a lawsuit in 2014 accusing the company of providing zero-interest loans to students but failing to tell them that they would be kicked out of school if they didn’t repay in a year. The CFPB said that when students could not pay up, ITT allegedly forced them to take out high-interest loans to repay the first ones.
• The company is being investigated by more than a dozen state attorneys general and two federal agencies.

At Treehouse, we believe all schools should be held accountable for these three things:

1. Helping a high percentage of their Students achieve their stated goals
2. Offering a high return on investment for the Student’s money
3. Making their school accessible to all genders, races and income levels

I believe ITT wasn’t held accountable for #1 and #2 (I don’t have data on #3) and ultimately their students had to pay a brutal price.

Get the facts and #EducateYourself

• We believe in empowering people to make the right education choice, for their lives and their goals.
• We believe Students should be able to learn over the course of their entire life, whenever it’s optimal for them.
• We believe that people should educate themselves on all the facts, before making life-altering decisions on education.

At Treehouse we’re beginning to collect a lot of data so we can transparently share our students’ success rates and how we’re doing as a school. I believe sharing this data, and encouraging other schools to do the same, will help all schools get better at taking care of their students.