Could intense federal scrutiny lead to ITT's collapse?
- The U.S. Department of Education has asked ITT to secure roughly $124 million to ensure repayment of federal student loans in the event that it loses accreditation and is forced to close.
- ITT's embattled accreditation agency, the Accrediting Council for Independent Colleges and Schools, has asked it to prove its accreditation worthiness in the face of federal inquiry and a number of legal claims of fraudulent representation of job placement post graduation.
- The for-profit technical school is under federal inquiry over what happened to millions in federal student aid disbursements and missing financial statements in recent years.
ITT is the latest prominent example of for-profit education in the crosshairs of the Obama Adminsitration. With mounting pressure to close down schools which create high student loan debt bills and few prospects for career mobility, the federal government is using the power of its educational grant and loan program to hold accrediting agencies accountable for the actions of their member instituitions.
But even more traditional schools should be wary of the emerging standard for accountability. With new emphasis on proving ROI as it relates to job placement, debt levels and institutional brand in the workforce, schools with similar outcomes yielded in more honorable contexts, like tribal colleges, Hispanic-serving institutions and historically black colleges and universities, may soon face a similar inquiry around their performance and legitimacy.