ZT:无耻的教育部： ITT倒闭记

万得福

I was never a fan of ITT. I don’t know much about the organization, but any learning institute that has to advertise seemed sketchy to me. Apparently several people at the Department of Education (DOE) got the same feeling. They’ve been on a witch hunt over the past two years, targeting for-profit colleges that receive the bulk of student tuition through federal student loans and have low graduation rates as well as high default rates.

ITT fits the bill… but it’s not alone.

The institute graduates a mere 19% of students, while 34% default on their loans after three years. However, Pueblo, CO Community College graduates only 18% and carries a 30% default rate. Louisiana State University at Alexandria confers degrees on 10% of its students while 17% don’t pay their loans. And closer to home for the DOE, only 12% of the students at the University of the District of Columbia graduate, but 14% default.

The numbers are similar, but apparently they don’t annoy the DOE like ITT and other for-profit colleges. Maybe it’s because ITT CEO Modany earned roughly $3 million last year. But then again, a professor at Columbia earned more than $4 million, and college football coaches regularly pull in more than $1 million. Instructors at ITT earn about $60,000, which is significantly less than tenured professors.

Whatever the reason, the DOE started questioning business practices at ITT and demanded a surety bond of $90 million in case the company went under and left student borrowers with federal loans high and dry. Then the DOE cut off all new federal student loans for ITT, and upped the surety bond to $230 million. The company earned less and had to pay more, so it died, which is apparently what the DOE wanted in the first place.

Keep in mind there’s been no trial, no finding of fault, just a concerted effort on the part of a government agency that wielded a mighty stick because of one thing – debt. Or, more specifically, government-sponsored debt.

If students at ITT didn’t have government-backed student loans, then the DOE would have to slay the company the old fashioned way, in court, proving its claims. But because the department controls the flow of funds, it wields incredible power over the institution, and just about every other institute of higher education in America.

The outcome should be sobering for everyone. I’m still not a fan of ITT, and maybe they did engage in deceptive practices and other nefarious activities as the DOE claims. But the government shouldn’t be able to pick winners and losers. It’s supposed to be a republic, where the laws apply equally to everyone.