In Speech On Senate Floor, Durbin Highlights Corruption Of ITT Tech And For-Profit College Industry

New report from Project on Predatory Student Lending pulls back the curtain on ITT Tech abuses; provides warning about consequences of lax federal oversight and enforcement of for-profit college industry

WASHINGTON – Six years after the collapse of the infamous for-profit college chain ITT Tech, U.S. Senate Majority Whip Dick Durbin (D-IL) delivered a speech on the Senator floor calling out ITT Tech for defrauding students, many of whom are still waiting for their loans to be discharged by the Department of Education (the Department) under the Higher Education Act’s borrower defense provision. In his written remarks, Durbin called on the Department to do more to provide former ITT Tech students with the relief to which they are entitled under the law—including without requiring individual applications.


“It’s been almost six years since the disastrous collapse of the infamous for-profit college chain, ITT Tech. At that time, ITT Tech was one of the largest chains of for-profit colleges in the country – 130 campuses spread over 38 states, nearly 40,000 students enrolled. It closed its campuses two weeks after the federal Department of Education barred the parent company from enrolling any more students using federal aid dollars…For ITT Tech, the total haul in federal dollars that year [2010] reached $1.1. billion. Six years later, the whole ITT Tech house of cards collapsed in a cloud of scandal, leaving students and taxpayers holding the bag,” Durbin began.


Durbin compared the new report, entitled “Dreams Destroyed: How ITT Technical Institute Defrauded a Generation of Students,” to the internal company memos that shed light on the inner workings of the tobacco industry.


“Prospective students were lied to and bombarded with high pressure tactics to get them to enroll and sign up for more and more and more student loans. One former ITT Tech recruiter compared the working conditions to a “sweatshop” where all that mattered was hitting “a quota.” Appallingly, recruiters were instructed to use the “Pain Funnel” they called it – a set of eight questions designed to reveal every prospective students’ vulnerabilities. By identifying a student’s pain points – such as working a dead end-job or feeling unappreciated – recruiters were trained to exploit that pain and present ITT Tech as the solution…The result: Modany and ITT shareholders made millions. Taxpayers got ripped off. Students ended up holding the bag with worthless diplomas and a mountain of student debt, whether they finished or not,” Durbin said.


In his full, written remarks Durbin warned that the tactics used by Kevin Modany and ITT Tech are still being used by the for-profit college industry today—citing a recent court case in California where for-profit college Ashford University was found to have misled students about expected costs and outcomes.


“I’ve been talking about for-profit colleges for a number of years. Luckily, we have a President and a Secretary of Education who are putting watchmen in place, guardians of students in place, who believe that is more important that kids are treated fairly and honestly than it is for an executive to make millions of dollars of abuse of the system…There are other ITT Techs out there.  For the sake of students and taxpayers, the Education Department under this Administration must begin to use its immense enforcement authority to protect them from swindlers and con-men,” Durbin concluded his floor speech.


Video of Durbin’s remarks on the Senate floor is available here.


Audio of Durbin’s remarks on the Senate floor is available here.


Footage of Durbin’s remarks on the Senate floor is available here for TV Stations.