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Congresswoman Waters Responds to Closure of ITT Tech

September 7, 2016
Press Release

WASHINGTON -- Today, Congresswoman Maxine Waters responded to the closure of ITT Technical Institute in the following statement:

“First, I commend the Department of Education for taking prudent action against ITT as it continued to fail in returning to compliance in several state and federal oversight standards. It comes as no surprise to me that ITT Tech has decided to immediately close its doors today after being subject to standard oversight by the Department said Representative Waters.  The closure will affect 40,000 students and 8,000 employees, including many in my district in Torrance, California.  My main concern at this time is restoring the valuable time, money and educational opportunities lost due to the company’s misdirected focus on growth and profit instead of its educational programs and students.”

Due to a variety of issues that stemmed from ITT’s skyrocketing tuition combined with poor educational courses, at the time of its closure, the Consumer Financial Protection Bureau, Securities and Exchange Commission, and New Mexico Attorney General had all filed lawsuits against the institution for various claims including signing students up for loans without their permission, deceiving investors, and falsifying its nursing school accreditation status.  

Additionally, several other state Attorneys General were also investigating ITT tech for deceptive recruiting practices. ITT Tech was also subject to a “show cause” order from its accreditor to demonstrate why it should not lose accreditation. Consequently, the Department of Education, in an effort to protect taxpayers and future students, implemented sanctions against the school that banned it from enrolling students who use federal financial aid and required ITT post an additional letter of credit.

“ITT Tech is another example of an institution that demonstrates what we have known about some within the for-profit colleges, Waters explained. Many of these schools have not provided students with the quality education or opportunities they have paid for and deserve. Instead, students are saddled with insurmountable debt and few prospects for employment leaving them with an inability to repay their loans and pursue a meaningful career. I am pleased that the Department of Education’s oversight exposed ITT Tech’s mismanagement and I will continue to advocate on behalf of its former students to hold it accountable and provide relief to those impacted.” 

Since her time as a California Assemblywoman, Congresswoman Waters has fought to hold predatory for-profit colleges accountable to students and taxpayers, most notably when she introduced the Maxine Waters School Reform and Student Protection Act which set a threshold for minimum job placement and graduation rates.   Since that time, Congresswoman Waters has introduced several piece of legislation centered around protecting students and taxpayers in the for profit college industry including: the CLASS Act, Students Before Profits Act, and the Ensuring Quality Education for Veterans Act.  She also was the first member of Congress to endorse the Corinthian 100, a group of former Corinthian students who initiated a debt strike in opposition to Corinthian Colleges’ fraudulent practices. Most recently, she sent a letter to the Department of Education in support of its oversight over ITT Tech. Its text is posted below.

September 2, 2016

The Honorable John B. King
Secretary of Education
U.S. Department of Education
400 Maryland Avenue, SW
Washington, D.C., 20202

Dear Secretary King,

I write to express my support over the Department of Education’s decision to ban ITT Educational Services, Inc (ITT) from enrolling new students and for increasing financial oversight of ITT’s financial accountability system. With an ITT campus located in my district, in Torrance, California, and directly impacting my constituents, I am committed to protecting these students and ensuring that they receive a quality education.

In that vein, I am deeply concerned with the Department’s ITT findings. According to your letter sent directly to ITT, ITT’s accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS), determined that the school failed to comply with federal and state student financial aid administration requirements, financial stability, administrative capacity, and student achievement requirements; and admission and recruitment standards.

Additionally, you noted that since 2014, you have monitored ITT’s financial and operational compliance, as well as the civil litigation filed against ITT by state and federal law enforcement. Based on this oversight, which has resulted in no less than 8 letters directly to ITT, the basis of your concerns stem from ITT’s financial instability, due to its assets to liabilities ratio of 0.72 and its below-standard student achievement outcome for 8 campuses in both 2014 and 2015.

I continue to share your concerns of ITT and the effect its practices may have on students, especially those in my district. I urge the Department to continue its oversight over ITT and its work on policies protecting student borrowers and taxpayers, especially the defense to repayment process which continues to move too slowly and has addressed too few students thus far.

Once again, thank you for making the prudent choice to hold schools accountable. I look forward to continuing to work with you to protect vulnerable students within the for-profit college industry.

Maxine Waters
Member of Congress