In 2010, Wisconsin Governor Scott Walker slashed technical college funding by 30%, reducing state funding to levels last seen in the 1980's. Walker also cut the University of Wisconsin system's funding by $250 million.
These cuts lead to increased tuition and reduced sections and services to students.
Yesterday, Walker toured and praised a predatory for-profit college, ITT Tech, that is currently under investigation for fraud by the federal Consumer Financial Protection Bureau.
MATC instructors are well aware of ITT because so many of our students are former ITT students who are saddled with huge debts and worthless ITT Tech credits. Joriah Siemann was one such student. When Milwaukee Magazine interviewed Joriah in 2012, the 39-year-old still owed $20,000 to ITT Tech in Greenfield, the very college Walker praised.
Joriah earned an associate degree from ITT in computer networking in 2004 after learning about the program online. After an entry exam, Siemann told Milwaukee Magazine, he felt pressured by his admissions representative to enroll on the spot. He acquiesced, not realizing he’d also taken out $35,000 in loans to pay for his tuition. To top it off, he says the school’s job-placement efforts were subpar. “They didn’t help me find a job at all,” Siemann says. “I’m kicking myself for going to ITT.”
The United States Senate report (see below) on for profit colleges suggests that ITT’s priorities are not educating or helping place students in jobs. It found that nationwide in 2010, ITT employed one recruiter for every 34 students, but one career counselor for every 204 and one student services employee for every 807.
Siemann was working two jobs – as a systems administrator and a restaurant server – and was enrolled at MATC while paying off his ITT degree when he was interviewed by Milwaukee Magazine in 2012.
Walker claims that ITT Tech in Greenfield has a good record. But the experience of students like Joriah contradict the Governor's talking points.
Saul Newton, an Afghanistan army veteran and a UW Waukesha student wrote the following op ed in the Milwaukee Journal Sentinel in response to Walker's visit to ITT:
Governor Scott Walker expressed his support for a for-profit college under investigation in multiple states and by the federal Consumer Financial Protection Bureau, claiming their track record has been positive.
The Governor’s comments came during an official tour at the ITT Technical Institute Center for Career Development in Greenfield on Monday afternoon. Walker toured the facility and spoke with students and faculty.
“The track record they’ve had in the Milwaukee area, at least, has been a positive one,” said Walker.
ITT Technical Institute is a for-profit technical college operating 144 campuses in 35 states. According to the Consumer Financial Protection Bureau, ITT’s tuition costs are among the highest in the nation. In Wisconsin, an Associate’s degree program can cost up to $44,000, and a Bachelor’s degree program can cost over $89,000.
In 2012 the Educational Approval Board, the state agency charged with overseeing for-profit and independent colleges, foundthat 51% of ITT students in Wisconsin drop out before completion of their program. Only two other institutions had a higher drop out rate. One Wisconsin based ITT program saw 93% of students drop out.
ITT Tech relies heavily on veterans to pad its revenues. According a scathing report by the U.S. Senate Committee on Health, Education, Labor and Pensions, Sen. Tom Harken (D-IA) found that ITT focused specifically on recruiting military veterans and service members.
ITT Technical Institute collected $178 million in veterans benefits from 2009-2011. ITT was the second highest recipient of revenue from military educational benefits among institutions the HELP Committee examined. The report alleged highly deceptive and fraudulent recruiting practices toward veterans and active duty military members.
When asked about ITT’s recruiting practices toward the military, Governor Walker defended the college.
“That may be the experience they’ve had in other places, but the experience we’ve seen with folks working in this state has been pretty positive. We actually have a stronger GI Bill in the state of Wisconsin than they do nationally.”
In February, the CFPB filed a lawsuit in federal court alleging ITT Technical Institute pushed students into predatory high-interest student loans and mislead them about job prospects and salaries upon graduation.
"ITT marketed itself as improving consumers' lives but it was really just improving its bottom line," said CFPB Director Richard Corday. "We believe ITT used high-pressure tactics to push many consumers into expensive loans destined to default.”
ITT is also under investigation by thirteen state Attorneys General for predatory and fraudulent recruiting practices.
An estimated 26,000 students attend for-profit colleges in Wisconsin, paying $155 million every year in tuition to mostly out of state companies.
In 2010, following the unexpected closure of several campuses in the Milwaukee area, a state committee was established to set performance standards at for-profit schools like ITT. After meeting just one time, Walker replaced three members of the seven members serving on the committee. It was dissolved shortly thereafter.
The for-profit college industry has been a significant factor in the explosion of student loan debt across the country. ITT collected $586 million in federal student loans. The HELP Committee report concluded more than 1 in 5 students who attended a for-profit college but did not graduate defaulted on their student loans within three years, more than three times the rate of student attending other types of institutions.
Student loan debt is a serious drag on our state's economy. Research from One Wisconsin Institute, a liberal advocacy organization in Madison, showed that those with a student loan are twice as likely to rent or live with others than owning their own home and they are twice as likely to own a used, rather than new car. New cars are the driving force for the American auto industry. One Wisconsin's research shows we lose over $200 million every year in Wisconsin in new car purchasing power directly attributable to student loan debt.
For-profit colleges like ITT Technical Institute continue to operate in Wisconsin with no standards for student achievement. Given the Governor’s comments, that trend is likely to continue.