ITT Technical Institute

In 1946, ITT Tech was established as Educational Services, Inc. From 1965 until its IPO in 1994, ITT Tech was a wholly owned subsidiary of the ITT Corporation (as "ITT/ESI"). During its years in operation, it was based in Carmel, Indiana. By 1986, all its institutions had become known by the common name "ITT Technical Institute." By 1999, ITT Corporation had divested itself completely of ITT Tech's shares. The schools were allowed to continue using the "ITT" name under license.

In the mid-2000s, CEO Rene Champagne cashed out more than $50 million in stock, before stepping down from the position in 2007. Kevin Modany was appointed as CEO, while maintaining all of the positions (president, COO, and director) he had held from early June 2002.

It acquired the financially struggling Daniel Webster College (DWC) in Nashua, New Hampshire in June 2009 for $29.3 million. The nonprofit college converted into a for-profit institution. In 2013, ESI began operating public charter schools in three cities: Indianapolis, Tempe, and Troy, Michigan. In charter documents, the company referred to potential students as "educational have-nots."

ITT Technical Institute charged among the highest tuition fees in the industry - between $45,000 to $85,000 in 2014 - and had the industry's highest rate of loans that went into default within two years of attendance.

In 2016, Chinese investors Zhifeng Zhang and Yude Zhang became ESI insiders, purchasing more than 3,000,000 shares of ITT Educational Services stock. In July 2016, ESI reported that enrollment was projected to drop by 30% to 40% from 2015 to 2016. In August 2016, the U.S. Department of Education barred the company from enrolling new students who use government loans. On the 30th of the same month, ITT Technical Institute stopped accepting applications for new enrollment. At that time, ITT Tech said that existing students could still finish their studies. ITT Tech also said that they would continue to operate until the last of its enrolled students either graduate or drop out. However, on September 6, 2016, ITT Technical Institute announced that it was shutting down all of its campuses, effective immediately.

At the time of its system-wide closure on September 6, 2016, the school had more than 130 ITT Technical Institute campuses across the United States, with more than 40,000 students and 8,000 employees. ITT Educational Services filed for Chapter 7 bankruptcy liquidation on September 16, 2016.

As for DWC, Southern New Hampshire University (SNHU), a nonprofit college in Manchester, New Hampshire, hired most of the college's faculty and staff. This arrangement allowed the 2016–17 academic year to proceed as usual. DWC's aviation and engineering programs were effectively transferred into SNHU, which had offered to buy the Nashua campus. However, its bid got rejected, and SNHU instead opted to build a new on-campus science and engineering building.

Legal issues

In September 1998, ITT Tech agreed to settle eight legal proceedings involving 40 former students arising out of their recruitment and education practices at ITT Tech campuses. The settlements cost $12.9 million, which included legal fees.

In Daniel Graves filed a whistleblower lawsuit against ITT Tech after a short stint working for the company, alleging compensation for some ITT staff violated the Higher Education Act of 1965 by incentivizing recruiters based on the number of students they enrolled with the school. The case alleged a culture of corruption at ITT, and was litigated for about 17 years until ITT prevailed when the US Supreme Court refused to hear an appeal of earlier rulings that the case was dismissed for failure to state a claim.

In 2004, federal agents served search warrants at the company's headquarters and ten of its campuses in Indiana, Texas, Virginia, Florida, Louisiana, Nevada, California, and Oregon, seeking various student records. No civil or criminal charges were made at this time. The investigation negatively affected the company's stock and triggered several class-action lawsuits by investors. The same year, the Office of the Attorney General for the State of California (CAG) investigated ITT Technical Institutes in California. The CAG's investigation was in response to qui tam actions filed against the company under either state, federal, or both False Claims Acts. (Qui tam actions are writs through which private individuals who assist a prosecution can receive part or all of the damages or financial penalties recovered by the government as a result of the prosecution). The probe alleged that ITT Tech falsified records relating to student attendance, grades, and academic progress. It also said that ITT Tech falsified student grade point average calculations used to qualify students for financial aid under the State's Cal Grant Program and retaliated against employees who may have complained about those alleged acts. Omer Waddles, ESI's CEO, and a former counsel for Edward Kennedy, also resigned.

In October 2005, ITT agreed to pay $730,000 to settle a lawsuit with California. The involved employees alleged that it inflated students' grade point averages to qualify them for more financial aid from the State of California.

A February 2011 investigative report by WTMJ-TV in Milwaukee found evidence of widespread grade inflation at the school's Milwaukee area location in Greenfield. In one instance a student received a score of 100% on a computer forensics assignment by emailing the professor a noodle recipe. The station's reporters believed tactics such as these increased federal student aid funding.

In 2013, a complaint was filed against ESI and two ESI executive officers in U.S. District Court for the Southern District of New York regarding securities. The Massachusetts Laborers' Annuity Fund filed a similar complaint and the cases were consolidated. The Plumbers and Pipefitters National Pension Fund and Metropolitan Water Reclamation District Retirement Fund were the lead plaintiffs. Students continue to allege that private loans with JP Morgan Chase and other banks are predatory loans. In 2013 USA Today listed more than 50 ITT campuses as "red flag" schools because their student loan default rates were higher than their graduation rates.