What happened to itt techs ceo

[Image above: This ITT Tech campus just outside Detroit already looked abandoned before the announced closing.]

In September 2016, ITT Tech shut their doors for good.  But not without damaging tens of thousands of working-class futures.  When ITT campuses closed, the school's 5-year student loan default rate surpassed 50%, and many of its students could not find decent paying work in the fields that they had studied. 

ITT Tech insiders knew for years that its parent company, ITT Educational Services (ESI), was leading them down the path to destruction. Over the last two years, it became more apparent to people in education and the business world as well as students and teachers. 

"In 2012 (ITT Tech) laid off almost all program chairs and full time instructors, the heart of any real college. It became quickly apparent that it is ONLY about the money."-- former ITT Tech employee

"I am a former employee, and a Mom. It is mind boggling how corrupt ITT-Tech is. Being part of this organization is like being in a cult. The mission statement, the mottos, with-holding information from students, the constant demand for more money from students, it is downright creepy." 

In studying IT Tech's history, I found that the roots of the school's demise started no later than 1993, when the company provided incentives for recruiters to enroll as many people as possible.    

ITT Tech's ethical problems worsened with its 1994 Initial Public Offering, which brought capital--with strings attached. As a a publicly traded stock, the school would have to make large profits every quarter--by hook or by crook.

 [Image below:  ITT Tech used scare tactics to get people to their schools.]

[Image above: In 1995, students at ITT Tech sued the school for misrepresentation.  The company did not learn from these mistakes.] 

In 1996, ITT Tech hired Omer Waddles, a former Senate Health, Education, Labor, and Pensions (HELP) counsel for Ted Kennedy.  Waddles was also head of the powerful Career College Association from 1996 to 1999.   

In 1998, the US government deregulated higher education, emboldening subprime colleges to recruit a greater number of working-class students--even those who were obviously unprepared for college. As part of a business-friendly attitude, the Department of Education's Richard Riley installed a Liaison for Proprietary Institutions, the head of the Career College Association, to act as an ambassador between the government and for-profit colleges.       

In 2000, Bob James, a former ITT Tech executive, became the US Department of Education's Liaison for Proprietary Institutions. 

ITT Tech did not reform--they just found different ways to make short-term profits at any cost.  Waddles resigned at ITT in 2004, amid more fraud allegations and a federal raid on 10 schools.  Bob James continued working for subprime schools at the Department of Education until 2015.     

Teachers realized for years that despite their best efforts, ITT Tech students were getting a subprime education, as evidenced on thelayoff.com.

[Image below] In 2015, a group of students and former students named the ITT Tech Warriors, began fighting for student debt relief.  The group has more than 6100 members and has joined the US College Debt Strike. Students claim that they were sold a college that has not delivered.]

[Image below, In late 2015, Julia Glum of the International Business Times wrote about ITT Tech's predatory practices.]

[Image below:  In 2016, Epoch Times' Emel Akan wrote about ITT Tech's "mounting problems," its "shady" business practices--and the ITT Tech Warriors, a student group seeking student loan justice.]

     "I was angry that I'd spent all this money in student loans and it turns out that the degree, if I would have finished there, would have been pretty much worthless." (U.S. Marine and combat veteran, Bryan Babcock)

"Yes, it is clear that ITT-Tech has deliberately chosen their path of evil." (former ITT Tech Teacher) 

[Image above: Former CEO Kevin Modany still faces fraud charges from the US Securities and Exchange Commission.]

ITT Tech's collapse was eerily similar to Corinthian Colleges (COCO) and Education Management Corporation (EDMC).  ITT Tech's private PEAKS and Credit Union (CUSO) student loans were comparable to Corinthian Colleges' predatory Genesis Loans.  While ITT Tech as completely closed, remnants of the other subprime schools are still operating, however.

Seems like just yesterday, people were still wondering if ITT-Tech was going to be the next Corinthian.

Other ITT Tech/ESI headlines from 2013-2016 signaled an obvious decline and an impending demise: 

• In 2014, ESI faced fraud charges with the US Consumer Financial Protection Bureau ( CFPB) in Indianapolis US District Court in a "chain of predatory lending" with seven credit unions.   ESI's predatory Credit Union loans took advantage of students who were knowingly in poor financial condition (46% had credit scores below 600).  
• In 2014, JP Morgan loaned ESI $79 million to pay off fines and penalties for "failing to provide certain 2013 financial statements and compliance audits for federal student loans."  Cerberus also loaned them $100 million.
• In 2015, Chronicle of Higher Education reported that ITT Tech (ESI) was manipulating student loan default rates by using temporary forbearance. Their official default rate of 27%, therefore, significantly underestimated the percentage of student loan defaults.
• Since 2015, at least two ITT Tech campuses have been on "heightened cash monitoring" by the US Department of Education.
• May 2015, ESI CEO Kevin Modany and former CFO Daniel Fitzpatrick were charged with fraud by the Securities and Exchange Commission.
• May 2015, CALVET issued a warning that GI Bill funding to ITT Tech campuses in California could be cut off by July.
• In June 2016, the US Department of Education recommended that ITT Tech's accreditor, ACICS, lose its power.
• For the first half of 2016, ESI stock was being propped up by Zhifeng Zhang and Yude Zhang, investors of for-profit schools in China. 
• In 2016, ITT campuses, including several of its Breckinridge nursing schools, were also facing loss of accreditation for poor student outcomes.  

One Last ITT Student Loan Magic Trick

In 2016, almost magically, ITT Educational Services reported a profit despite a mountain of bad news including lower enrollments and lower revenues.  In fact, according to ESI, the company made an incredible $56 million turnaround: from a $27 million loss in 2013 to a $29 million profit in 2014, with few campus closings.  How was this "turnaround" possible? By moving the bulk of their toxic student loan debt obligations to future years.  

But at many campuses, ITT Tech reduced its staff to a skeleton crew.    

What kept ITT Tech, a #zombiecollege, operating and even supposedly making a profit?  Tens of thousands of new victims and hundreds of millions in US government funds meant for working-class students and veterans.  In a for-profit world where corruption is king,  ESI also had the right political connections, including Republican power player Vin Weber. 

In the media, ITT-Tech has now been given its final identity in the pages of history. Forever forward, ITT and Corinthian will be lumped together in the same sentence.

Modany's legacy is that he led one of the two biggest and baddest scam colleges in the know universe. Ultimately, his actions led to Department of Ed to cutting out an entire accrediting agency to slow down the rot of runaway greed.

[Image above: This ITT Tech appeared on August 20, 2016 on FOX Business.  On August 29, 2016, the schools closed their doors.]

In August 2016, the US Department of Education finally put the hammer down on ITT Educational Services. A few days later, the company closed its doors. For insiders, including a student loan debt group called the ITT Tech Warriors, this was a long-awaited inevitability. 

But justice also still awaits the ITT Tech Warriors.  Few students from ITT Tech have received debt relief. 

Like the Corinthian student resistance, ITT Tech students who believe they were defrauded (the ITT Tech Warriors) are rallying to resist paying student loans.   

While it looks like ITT management and their allies were able to get away with the big con (and devastating working class people's lives) this does not mean that they will avoid justice forever.  But more students and teachers need to join the ITT Tech Warriors' struggle, and a cadre of lawyers is needed to help the ITT Tech Warriors make their defense to repayment claims.    

[Image above by Craig Hammond]

People concerned the crushing debt many ITT students still experience, should join the ITT Technical Institute Warriors at https://www.facebook.com/?_rdr#!/groups/ITTTechnicalInstituteLawsuitWarriors /