Durbin to ITT Tech: Stop the Hypocrisy & Give Student Their "Day in Court"
Senator says while company demands legal protections in the media, it denies same rights to students in the fine print
WASHINGTON, D.C.] – U.S. Senator Dick Durbin (D-IL) today called out the for-profit college chain ITT Technical Institute for complaining that its “day in court [is] long overdue” while in its enrollment documents, the company prohibits students from filing suit in a court of law against the company either as an individual or as part of a class action – essentially denying students their own “day in court”.
“Students are forced into arbitration proceedings that deny them the precedents and protections of court proceedings. With these enrollment terms, ITT Tech is shielding itself from liability and accountability,” wrote Durbin. “Given your firm position that ITT Tech deserves its ‘day in court’, surely you believe your students deserve the same. That is why today I am calling on you to immediately cease enforcement of any arbitration clauses, class-action bans, or other contractual roadblocks that prevent students from bringing claims against ITT Tech before a court of law and to remove any such provisions from future enrollment documents.”
Text of today’s letter is below.
May 28, 2015
Eugene W. Feichtner
President and Chief Operating Officer
ITT Educational Services, Inc.
13000 North Meridian Street
Carmel, IN 46032
Dear Mr. Feichtner
I write to you today in response to a statement released by ITT Technical Institute on May 22 and attributed to you.
Your statement decries an “unprecedented assault” and “piling on” from legislators and regulatory agencies who are simply trying to ensure that ITT Tech students are protected and that the company is complying with the law. Last year ITT Tech received more than $970 million in federal taxpayer dollars. Members of Congress and regulatory agencies have an obligation to ensure that these taxpayer dollars are well-spent. The insinuation that scrutiny of ITT Tech is somehow undeserved or unfair is highly offensive to the company’s former, current, and prospective students as well as to federal taxpayers.
Careful scrutiny of ITT Tech is in fact well-deserved. As you know, the Attorney General of New Mexico found that ITT Tech made misrepresentations to students about accreditation and engaged in unfair, deceptive and unconscionable practices - including that ITT Tech placed students into loans without their knowledge, falsely stated the number of credits a student had to take in order to push them into taking on more debt, and failed to issue refunds of tuition and fees in compliance with federal law. The Consumer Financial Protection Bureau found ITT Tech’s private lending practices were predatory and that students were misled into believing they would be able to repay private loans with interest rates as high as 16.25 percent.
The Securities and Exchange Commission found that ITT Tech’s CEO Kevin Modany and CFO Daniel Fitzpatrick engaged in a scheme to conceal from investors the poor performance and looming financial impact of those very private loan programs. And at least 18 other state Attorneys General are investigating similar practices in their states. Continued scrutiny of ITT Tech is clearly warranted.
Your statement also complains: “Day in Court Long Overdue for ITT Tech.” I agree that ITT Tech should have its day in court to answer the above and other findings by state and federal agencies of wrongdoing. I’m confident ITT Tech will get what it deserves. However, it is hypocritical for ITT Tech to insist on a day in court for itself and its executives when ITT Tech prohibits its students from getting their own day in court. You complain of “litigation roadblocks” that your company is facing, yet ITT Tech subjects its students to the biggest litigation roadblock of them all: forced arbitration.
As you know, the enrollment documents students must sign to attend ITT Tech prohibit students from filing suit in a court of law against the company either as an individual or as part of a class action. Instead, students are forced into arbitration proceedings that deny them the precedents and protections of court proceedings. With these enrollment terms, ITT Tech is shielding itself from liability and accountability. But at its most basic, ITT Tech is preventing students from having their day in court.
Given your firm position that ITT Tech deserves its “day in court”, surely you believe your students deserve the same. That is why today I am calling on you to immediately cease enforcement of any arbitration clauses, class-action bans, or other contractual roadblocks that prevent students from bringing claims against ITT Tech before a court of law and to remove any such provisions from future enrollment documents.
Your statement defiantly asserts, “we’ll continue to do what we can for our students…” Here’s something you can do for them now. It is undeniably within your power. Failure to do so, will say more about ITT Tech’s true nature than any investigation ever could.
I look forward to your prompt reply.
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