Business Column

ITT Tech closure shows flaws in for-profit college model

/ The Daily Orange

What would happen if Syracuse University were to close forever? While this thought, to us, is unimaginable, it is becoming reality at many schools across the country. Most recently, students at ITT Technical Institute have suffered this fate.

ITT Tech, a multi-campus and online institution that is run by for-profit company ITT Inc., sent an email to its 35,000 students earlier this month to let them know that all campuses would be closing immediately. This closure hits close to home with the ITT Liverpool campus, which is a mere four miles away from SU, and others nearby in Albany and Erie County.

To guide these stranded students, SU has decided to waive its $75 application fee for students coming from the shutdown Liverpool school. Though this is a kind gesture, the burden created by ITT Tech’s dishonest practices is far from SU’s responsibility.

In addition to about 35,000 students being school-less, about 8,000 employees, according to a press release from ITT Tech, across the now defunct campuses are without jobs. During this limbo period, finger pointing should be avoided and the focus should be on accommodating the students that are now left without a school.

The school claims that the straw that broke the camel’s back came when the United States Department of Education banned the school from enrolling new students who use federal financial aid. While unfortunate for ITT’s former students, the DOE was right to question the school’s financial stability. It would be negligent if the DOE knew that the school was putting the money of students and taxpayers at risk, and didn’t do anything to stop it.

It’s awful to think that there are students who put aside thousands of dollars and hours of their lives doing coursework just to be left out to dry by the institution that promised them everything. What’s more is that many of the students were not the fresh-out-of-high school college students that we see at SU, but working full-time jobs to support their families while trying to get an education. This type of student doesn’t have many resources in terms of spare time and income for education.

ITT Tech Students were given a few options by the DOE. They can attempt to transfer their credits to another school and finish out their degrees there. Current students and those that left within the last 120 days are also being given the option to discharge any student loans they may have taken out to attend ITT Tech. But these students will not be allowed to transfer credits, and will essentially be required to start their education from scratch if they decide to enroll at another school.

While transferring credits may seem like the most time-sensitive option because students can build on their progress, doing so will be far from easy. The DOE is encouraging schools like Onondaga Community College to accommodate ITT students with transfer credits and enrollment. But ITT’s extremely flexible online programs and thorough financial aid were huge draws for students.

Not-for-profit schools like OCC may not be able to offer the same online capabilities, convenience and affordability that were such a pull for ITT Tech, forcing too many students to make the decision whether to abandon their degrees altogether.

As an educator, Martin J. Whitman School of Management assistant professor Will Geoghegan couldn’t help but feel sorry for the bumpy road that many of the students have now traveled.

“It’s just so sad for the students, I guess. Some of them have come from other schools that have closed down,” Geoghegan said. “Most of these for-profit schools, their credits are only accepted by other for-profit schools.”

ITT Tech was a for-profit college, meaning it could make money off of tuition and fees —  distinct from the not-for-profit model that most universities, including SU, follow. Geoghegan said he believes the university sector may not be the best fit for the for-profit model.

“Even though we have a large endowment here, you know that no one is getting rich off of Syracuse University. The money is being piped back into the students, and if you are going to have predatory pricing and take advantage of these students it becomes problematic,” Geoghegan said.

Solving the problem of for-profit universities doing as they wish and emptying students wallets the process is not rocket science. While regulating private establishments is tricky to do in a capitalistic environment, the U.S. government would do well to keep a much closer eye on for-profit universities. Considering the many laws that are in place to protect consumers for predatory marketing, it is surprising that for-profit schools haven’t already been cracked down on.

The reality of for-profit institutions seems to be dimming monumentally as the aftermath of ITT’s collapse plays out. And as it does, these ramifications should serve as a lesson to the government to be proactive in regulating these schools before they reach their breaking point and to academic institutions to keep their students at the forefront.

Sam Gozinsky is a sophomore finance and public relations dual major. His column appears weekly. He can be reached at slgozins@syr.edu and followed on Twitter @SamGozinsky.

 

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