ITT Technical Institute
| Company type | Private for-profit technical college |
|---|---|
| Industry | Education |
| Founded | 1969 |
| Defunct | 2016 |
| Fate | Closed; filed for Chapter 7 bankruptcy liquidation in 2016 |
| Headquarters | Carmel, Indiana , United States |
Area served | United States (38 states) |
Key people | Rene Champagne (former CEO), Kevin Modany (former CEO) |
| Products | Associate, bachelor's, and master's degree programs (business master's online only) |
| Owner | ITT Educational Services, Inc. |
Number of employees | Approximately 8,000 (at closure in 2016) |
ITT Technical Institute (commonly known as ITT Tech) was a private for-profit technical college headquartered in Carmel, Indiana, operating roughly 130 campuses across 38 states. Established in 1969, it expanded to become one of the largest for-profit educational providers in the United States before shutting down in 2016.
The institution was under the ownership of ITT Educational Services, Inc., a publicly traded entity based in Carmel, which also managed the Breckinridge School of Nursing and Health Sciences.
In 1999, former staff members initiated legal action accusing ITT of unlawful recruitment tactics and misuse of government funding. By 2004, the Department of Justice commenced a criminal probe into ITT colleges located in eight different states.
After extensive investigations by both state and federal authorities, the United States Department of Education prohibited students from utilizing federally backed student loans at ITT Tech as of August 2016. Subsequently, the company shut down all its campuses the next month and filed for bankruptcy protection.
In 2018, the bankruptcy trustee for ITT Tech filed a lawsuit against the Department of Education and lenders seeking to recover $1.5 billion, alleging regulatory failures in approving loans to economically disadvantaged students. By 2021, the Department of Education authorized $1.1 billion in debt relief for more than 115,000 former students of ITT Tech.
History
Founded in 1946 as Educational Services, Inc., ITT Tech operated as a wholly owned subsidiary named "ITT/ESI" under ITT Corporation from 1965 until its initial public offering in 1994. Headquartered in Carmel, Indiana, by 1986 all locations adopted the unified brand "ITT Technical Institute." By 1999, ITT Corporation completely divested its ownership, permitting the schools to license the "ITT" brand name independently.
During the mid-2000s, CEO Rene Champagne sold over $50 million worth of stock prior to resigning in 2007. His successor, Kevin Modany, took on the CEO role while maintaining his positions as president, COO, and board director.
In June 2009, ITT Educational Services purchased Daniel Webster College (DWC) in Nashua, New Hampshire—a financially troubled institution—for $29.3 million, converting it from a nonprofit to a for-profit entity. In 2013, ESI ventured into operating public charter schools located in Indianapolis, Tempe, and Troy with a focus on serving students internally referred to as "educational have-nots."
ITT Technical Institute was known for charging some of the highest tuition rates within the sector—ranging from $45,000 to $85,000 in 2014—and experienced the highest student loan default rates within two years following attendance.
In 2016, Chinese investors Zhifeng Zhang and Yude Zhang acquired more than three million shares of ITT Educational Services stock. That year’s enrollment was forecasted to drop between 30% and 40% compared to figures from 2015. In August 2016, the U.S. Department of Education prohibited ITT from enrolling new students using federal financial aid; by the end of that month, new admissions were halted. Although initially assuring that current students could complete their programs, ITT unexpectedly closed all campuses on September 6, 2016.
At the time of closure, ITT operated over 130 campuses nationwide with an enrollment exceeding 40,000 students and a workforce of approximately 8,000 employees. On September 16, 2016, ITT Educational Services filed for Chapter 7 bankruptcy liquidation.
Following Daniel Webster College’s shutdown, Southern New Hampshire University (SNHU) employed most faculty and staff members to ensure academic continuity during the 2016–17 school year and took over DWC’s aviation and engineering curricula. While SNHU initially expressed interest in purchasing the Nashua campus property, it later withdrew that offer and chose instead to invest in new on-site facilities.
Student loan debt and debt relief
In 2014, Time magazine placed ITT Technical Institute second on its list titled "The 5 Colleges That Leave the Most Students Crippled By Debt." Among graduates with loans due in 2011, 22% of ITT Tech alumni had defaulted by 2014, a rate notably higher than the national student loan default average of 13.7%. ITT Tech's default rate ranked just behind the University of Phoenix, which had a slightly lower percentage (19%) but a greater number of students in default (45,123 compared to ITT Tech’s 11,260).
Data from the College Scorecard as of March 2016 showed that only 39% of ITT Tech graduates were actively repaying their student loans, significantly below the national average repayment rate of 66%. This figure reflects those who managed to pay down at least one dollar of their student debt within three years following graduation.
In 2018, a preliminary settlement in a class-action lawsuit proposed forgiving loans for ITT Tech attendees between 2006 and 2016. Affected students could seek borrower defense to repayment through the U.S. Department of Education. Nevertheless, on July 25, 2018, Education Secretary Betsy DeVos announced intentions to revise this regulation and introduce a more stringent repayment framework effective July 1, 2019. Subsequently, on December 13, 2018, a federal court deemed the Department of Education’s decision "arbitrary and capricious," ruling in favor of the plaintiffs and nullifying the department’s imposed stay. Further hearings were scheduled to determine appropriate remedies.
In June 2019, Student CU Connect CUSO, a private lender serving ITT Tech students, reached a settlement with the Consumer Financial Protection Bureau as well as 44 states and the District of Columbia. The agreement required CUSO to cancel approximately $168 million in private student loans and discontinue all collection activities.
Academics
Students attending ITT Tech were often older adults managing family responsibilities alongside underemployment challenges. The institution characterized its educational offerings as incorporating traditional, applied, and adult-learning teaching methods delivered through conventional, accelerated, and distance learning formats within a learner-focused environment.
ITT Tech provided associate, bachelor's, and master's degrees—though master's degrees were exclusively business-oriented and offered online. Pennsylvania was the sole state that prohibited ITT Tech from granting master’s degrees. As of December 2015, the institute offered 49 distinct programs spanning multiple disciplines.
Most campuses operated on a four-quarter academic calendar featuring terms lasting approximately twelve weeks. Full-time enrollment typically enabled students to finish associate degrees within seven to eight quarters; bachelor’s degrees required fourteen to fifteen quarters; master’s degrees took around seventeen quarters.
Classes were generally scheduled during daytime and evening hours. Online courses were asynchronous but adhered to predetermined completion deadlines. This flexible scheduling allowed many students to maintain part-time or full-time employment while pursuing their studies. A substantial portion of coursework emphasized hands-on laboratory experience.
Accreditation
ITT Tech held national accreditation from the Accrediting Council for Independent Colleges and Schools (ACICS). However, according to its 2015 annual report, thirty-one campuses and more than four hundred programs failed to satisfy ACICS standards concerning student retention rates. Credits earned at ITT Tech were typically not transferable to other educational institutions.
In April 2016, ACICS issued a "show cause" directive requiring ITT Tech to demonstrate why its accreditation should not be revoked due to failure to comply with certain accreditation criteria.
Rankings
In 2015, the financial news platform TheStreet.com placed ITT Technical Institute-Seattle in fourth position among the "10 Best U.S. Two-Year Colleges That Actually Pay Off," ranking it just behind its affiliated campuses located in San Antonio, West Houston, and San Diego.
Legal issues
In September 1998, ITT Technical Institute resolved eight lawsuits involving 40 former students concerning recruitment and educational practices, with total costs amounting to $12.9 million, inclusive of legal expenses.
Daniel Graves initiated a whistleblower lawsuit accusing ITT of breaching the Higher Education Act of 1965 by rewarding recruiters based on enrollment figures. This case, which alleged systemic corruption within the institution, was contested for 17 years before the US Supreme Court declined to review the appeal, effectively ending the litigation.
Federal authorities executed search warrants in 2004 at ITT’s main office and ten campuses across various states to obtain student records. Although no formal charges resulted from this action at that time, the investigation negatively impacted ITT’s stock price and triggered class-action lawsuits by investors. Concurrently, the California Attorney General investigated ITT for purportedly fabricating student attendance records, grades, and GPA calculations to qualify students for financial aid through the Cal Grant Program while retaliating against whistleblowers. These controversies culminated in CEO Omer Waddles stepping down.
In October 2005, ITT agreed to pay $730,000 to settle a lawsuit in California relating to inflated GPAs used to secure increased state financial aid.
A 2011 investigative report uncovered significant grade inflation at ITT’s Milwaukee-area campus, indicating efforts designed to boost federal student aid receipts.
By 2013, securities fraud complaints were lodged against ITT and its executives; these claims were consolidated with lead plaintiffs including prominent pension funds. Additionally, students raised allegations of predatory private loans involving JP Morgan Chase and other lenders. USA Today identified more than 50 ITT campuses as "red flag" institutions due to student loan default rates surpassing graduation rates.
On February 26, 2014, the Consumer Financial Protection Bureau filed suit against ITT for pressuring students into high-interest private loans prone to default. Simultaneously, at least twelve state attorneys general initiated investigations into fraud and deceptive marketing practices. A July 2014 Senate HELP committee report revealed that 57% of ITT’s programs would not meet the Department of Education’s Gainful Employment standards.
On October 19, 2015, the US Department of Education escalated oversight of ITT for failing to meet fiduciary responsibilities.
A federal whistleblower lawsuit filed in 2015 accused ITT of employing aggressive enrollment tactics, illegal recruiter incentives, and providing misleading information regarding financial obligations and credit transferability. That same year, California temporarily prohibited ITT from enrolling students funded by the GI Bill. The Securities and Exchange Commission also brought fraud charges against ITT Educational Services Inc., CEO Kevin Modany, and CFO Daniel Fitzpatrick.
In 2016, Massachusetts pursued legal action against ITT for allegedly deceiving and harassing students; additional lawsuits included fraud allegations from nursing students. Between 2004 and 2014, multiple states issued subpoenas or investigative demands under consumer protection statutes against the institution.
On August 25, 2016, the U.S. Department of Education barred ITT from enrolling students receiving federal financial aid and doubled its surety fund requirements. This announcement caused a 35% decline in stock value and a trading suspension amid concerns over the institution’s viability.
ITT Technical Institute ceased all operations on September 6, 2016, attributing closure directly to actions taken by the Department of Education.
In 2022, ITT was listed among 153 institutions included in a student loan forgiveness settlement related to alleged fraudulent conduct. More than 200,000 borrowers participated in this class action supported by Harvard Law’s Project on Predatory Student Lending. The settlement recognized significant misconduct by the named schools. In April 2023, the Supreme Court permitted the $6 billion debt cancellation agreement to move forward.
Distinguished Alumni
- Curt Cobb, former member of the Tennessee House of Representatives
- Jon Hensley, talent manager and radio host
- Yvette Herrell, U.S. Representative serving New Mexico's 2nd congressional district
- David Joyner, actor recognized for his role in Barney & Friends
- Omar Navarro, frequent political candidate and convicted criminal
- Ricardo Raschini, Brazilian bobsled athlete who competed in the 2002 and 2006 Winter Olympics
- DJ Tab, entrepreneur, record producer, and hip hop DJ