Despite a Securities and Exchange Commission complaint that the ITT Tech for-profit college chain lied to Wall Street investors about its finances — and a pending lawsuit by the Consumer Financial Protection Bureau that says the school pushed students into “predatory” private loans — ITT is still free to enroll new students, Florida’s Commission for Independent Education decided Thursday.
ITT is not obliged to notify prospective students about the company’s problems.
“There’s no reason to yet, or there’s no requirement that says that we have to,” Thomas Brower, ITT’s regulatory affairs manager, told the commission.
Indiana-based ITT operates 10 Florida campuses stretching from Hialeah to Pensacola, with roughly 7,400 total students, according to the state. An October analysis by JP Morgan pegged its national enrollment at more than 57,000 — making it the nation’s 10th-largest for-profit chain.
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Florida’s CIE — a for-profit watchdog agency that has been criticized for its close ties with the industry — did respond to ITT’s troubles with several lesser restrictions on the company’s Florida operations. ITT will now have to provide the state with monthly status reports, submit a “teach-out” plan for current students to finish their degrees elsewhere if the company shuts down, and obtain a $5 million bond that would help pay for that teach-out option.
But CIE board members, a majority of whom are college executives themselves, declined to force ITT to stop enrolling new students. In California last week, the Department of Veterans Affairs suspended ITT’s eligibility for GI Bill benefits, saying the move was needed to make sure veterans “receive the education and training they were paying for.”
Board member Gene Youngblood said he worried that a Florida enrollment freeze, which was discussed by the CIE, would create a “domino effect” that would ultimately push ITT over the edge.
The agency’s staff had recommended halting any new sign-ups at ITT until the $5 million bond and various other conditions had been satisfied.
A CIE staff analysis wrote “a reasonable person could view ITT’s current financial and regulatory position as at best precarious and the likelihood of harm to ITT’s Florida current and prospective students as high.”
In the wake of this month’s lawsuit by the SEC and the earlier one by the Consumer Financial Protection Bureau, ITT’s top executives have announced plans to resign. The company’s stock price has dropped about 90 percent in the past year.
In the Herald series Higher-Ed Hustle, one student said ITT forged her signature on a loan she didn’t apply for. An ITT “secret shopper,” hired by the school to navigate the admissions process, made a similar complaint in the CFPB lawsuit.
ITT’s Brouwer told the commission, “We don’t agree with the charges and we don’t agree with news stories that have been in the press.”