Fraudulent misrepresentation and loan forgiveness at ITT Technical Institute

ITT Technical Institute, Sylmar Campus, Computer and Electronics Engineering Technology (AAS), 15-MAR-04 / 05-MAR-06, Electronics and Communications Engineering Technology (BS) 13-MAR-06 / 02-DEC-07

Department of Education,

This letter will describe my experiences at ITT and why I believe I was misled by the school and the victim of fraudulence. As a result of these experiences and the facts that have come to light regarding ITT (enclosed in the Appendix), I am seeking a forgiveness on my federal loan based on current events that made me realize that what ITT did was a completely wrong to not only myself but to countless other people.

While I understand that my satisfaction of the school is not a foundation for the fraud, however, the promise that ITT gave me regarding cost, job, value and experience of my education is what is fraudulent. They created an expectation of job security and financial future that was guaranteed as long as I completed their program.

I realized I was being defrauded and/or "substantial misrepresentation" by ITT after hearing that the school was being closed. The decision to close the institution put me and other students at risk, especially in relation to the millions of dollars in federal student aid. The institutions closure was fueled by a history of poor administrative capacity, financial viability, organizational integrity, and inability to serve students effectively. As I look back to my experience at the school, ITT brought worse academic and financial damage to me and other students. I did not realize these potential damages at the time of enrolment until I heard that the school was being closed. Actually, when I heard that ITT was closing down, I started gathering evidence, which implies that my time limitations should commence on that data rather than my start or graduation date.

I am outlining my argument according to my experiences in Admissions, Financial Aid, Education Experience and Career Placement.

ADMISSIONS

I was enrolled in ITT Technical Institute from 2004 to December 2007 in Sylmar, CA. My hope was to learn new skills and broaden my employment opportunities. At that time I was working as a Local 11 Union Electrician. The work was very demanding physically and the job security was day-to-day. I was employed full time and was making $31 per hour. However I knew that at any point I could lose my job and be back at the bottom of the books at the union hall.

When I first showed interest with ITT, I was soon heavily recruited getting mailers, phone calls twice a week and I finally I decided to go the school for a tour. Immediately after the tour, everything just happened rather quickly. I was signed up before I knew it and the process was easy enough. I felt good about the quick and smooth process because I had so much to do on my schedule. I was set up to attend at night so that I could work during the day. I kept up a full time schedule and I was prepared to sacrifice for my future.

Looking back at it, the "tour" was where it all began: my recruiter asked me what my ideal school would be -- I was candid and replied that I thought I might start at a community college and transfer later to a larger school like a Cal State or a University of California. He immediately warned me against going to community college by stating that most of them are only regionally accredited. He then compared this accreditation to ITT's national ACICS accreditation. He told me that national is better than regional accreditation because you can take it anywhere. I took his word for it, but I later found out that this is simply not true: a lot of non-profit, state-owned, degree-oriented schools are regionally accredited whereas, many for-profit schools are nationally accredited (and it is these latter types of schools that face less strict regulations). My recruiter was trying to convince me that by being nationally accredited, ITT was superior to regionally accredited schools. He even went so far as to say that if I wanted to work with computers, ITT would probably be even better for me than MIT.

He explained this by saying that, "98% of ITT grads are placed in jobs in their field of study" and the starting salaries for these positions were between, "$80,000 and $100,000" a year. He assured me that ITT worked with big name companies like IBM, Schumberger. He told me that Schumberger hires primarily from ITT's pool of graduates and that I would easily be able to get a $120,000 to $150,000 salary and not have to pay taxes on the first $100,000 because I'd be working all over the world. I didn't understand all of this, but he spoke on authority of the school, so I accepted it at face value. He went on to compare ITT to MIT saying that while MIT is the bigger name, employers are actually seeking out ITT graduates because they are better trained and the best equipped in the real world instead of theoretical concepts that MIT could offer. Basically, he told me that if I wanted to work in the real world and make real money then ITT is where I needed to be.

I asked about cost and the recruiter said that he could not tell me what the exact cost of attendance while attending ITT since it varies student to student. I later found out with my wife that there is an actual Cost of Attendance for every program for students to be able to compare schools. He directed me to the Financial Aid Administration. He assured me that they would make it work and that by the time I was ready to graduate I'd have a high-paying job lined up that would more than compensate for the loan.

They told me that they had a high number of program completion and this would come into play later as I suspected when my original class of 30 that ended with 3 students graduating.

It all sounded too good to be true and I was so happy that I had come to ITT. Looking back, I could see how easily I fell for what they were selling. I was a number to them and made to fulfill a recruiter's weekly and term start. They made sure that I started my classes that first week. I felt like from the time I was recruited, I was locked in and could not get out between when I signed up and when the classes started. I could not cancel my contract.

EDUCATIONAL EXPERIENCE

That reality would become grimmer over the years as I attended the courses but I just thought it was just my unique experience since I was working and going to school at the same time.

My experience in the undergraduate program at ITT was as follows:

• My instructor hardly ever taught anything because he was working on his own master's program and using our class time to work on his own homework. I often found myself teaching my classmates because I already had some background in the subject. There were times when he was not there to open up the classroom or he just disappeared from class completely. We had him for several classes and it got worse. When we complained to the Dean about the instructor's absence, we were told not to worry because the class was just a formality and did not really matter. It turned out that a lot of classes at ITT were just formalities. This was the actual Dean of Academics telling me that they graded on a curve so we would pass the class even though we had not learned anything.

• We were part of a group that was being used as test subjects for online classes. We were just told that this was going to happen without our consent even though we signed up for a classroom program. We started with General Education classes online. The process was filled with disaster. The whole thing lacked teaching but rather felt more like a myriad of tests to pass and then at the end it would glitch and generated a zero score and time out. We would need to call in and complain to get a reset. It was a complete waste of time to start the test all over again and hope it would not glitch. This happened in several General Education classes.

• I informed the Registrar's office that I had a learning disability and I received no outreach or any sort of help regarding classes.

• Class was also disrupted by people trying to get us to buy a computer and have it be covered with financial aid. There was a sales pressure; it seemed like they needed to reach a certain sales' threshold to receive a discount on a larger level.

• In most of the classes, we never even took the plastics off our books while instructors were just showing us Youtube videos.

• Programming classes were just free C+ classes that were on the web.

• To do our work at home, ITT distributed pirated software for students to use at home. We received copied disks, which were not enterprise versions of Microsoft or other programs.

• After years of such classes, graduation neared, but the good jobs I was promised by my recruiter were nowhere to be found. The reason for this, we were told, was that we didn't have the right degree. We needed a Bachelor's not an Associate's so I took on more financial hardship to get a better job.

CAREER PLACEMENT

Job placement assistance was virtually non-existent. There was only one career counselor on the campus and she was never available. All we could do was send her our resumes and monitor the bulletin board where outdated job postings hung like dead memories from a time past.

I was told that I would get help with my resume and all the advice I received was to look at the job descriptions and whatever requirements. I did not know that I was to just put it on my resume under "knowledge of." Then to gain the knowledge, I had to check Youtube the night before. Essentially after all was said and done, they told me to just lie on my resume. There were no workshops regarding interviews, cover letters, resumes or ways to job search.

I had no leads for any jobs from ITT. Help was nonexistence. I know a guarantee for a job cannot be made but they took my money to also help with making me ready to look for a job and feel confident that I can compete with others.

To make it worse, the $30,000 I was told I would be paying ended up being nearly $100,000 worth of debt.

When I graduated the market went down and I knew that jobs would be an issue. I sent out my resume on Monsters.com and other job placement locations and received no work replies. I was still working and decided that I had to probably up my educational background to get a little bit more of an edge from everybody. I went for my master's program and this had a secondary benefit of postponing repayment until I completed that program. But none of my credits from ITT transferred and I had to take extra classes to qualify for their program.

I lost my union electrician job while working on my masters and started to receive unemployment benefits. I was actively searching for a job in my field because the union hall had more than a thousand people in front of me. I was planning on taking a job regardless of its location for anything in my field or for the union hall. I was very motivated to start my career and I still was not marketable with a Bachelor from ITT.

ITT failed their contract of an education with me. I signed up for a bachelor's degree worthy of all the money and time I had spent. I know that my satisfaction of my education does not merit my loans to be forgiven however my experience of a school that did not live up their end of my contract of an education is criminal. They cheated me of my future in something that I could have been really good at had they just actually done what they were supposed to do and teach me.

ITT Educational Services Inc., the parent company of ITT Technical Institute and Daniel Webster College informed the Department of Education and other relevant oversight bodies across 38 states where the school operated of its decision to close down the institution on September 6, 2016. The parent company intended to halt the operations of online and classroom-based instructions and operations by ITT Technical Institutes across the country. This was followed by filing for bankruptcy ten days later, which was granted and subsequently resulted in closing down all organizational operations of ITT. The Federal Student Aid (2016) reported on its website that students who attended or were attending ITT could be eligible for a closed school discharge. The discharge would cover loans the student undertook to attend the closed school and its educational programs. On the other hand, those affected had the option of transferring their credits to a comparable program offered by another school/institution. While this announcement is largely covered by new agencies as a political or business story, it's deeply personal to me and other students because of the educational and financial damage the school has brought to my life. Based on my experience at the school, ITT affected my finances and capability to continue my education.

After hearing that the school was being closed, I embarked on a mission to find evidence of my substantial misrepresentation and/or defrauding by ITT. In the past few years, ITT has continually become the subject of several state and federal investigations following its administrative capacity challenges, financial viability issues, lack of ability to serve students effectively, and poor organizational integrity. For instance, the Accrediting Council for Independent Colleges and Schools (ACICS) found out that the school was not compliance and lacked capability to comply with its accreditation criteria (King, 2016).

The institution has been the subject of investigations by 13 states attorneys general for lying to students. In addition, the institution was being pursued by the Securities and Exchange Commission for not only lying to investors about CUSO and PEEKS lending practices but also for engaging in fraudulent activities. The school was sued by the Consumer Financial Protection Bureau in 2014 for predatory lending. In the same year, ITT was sued by New Mexico Attorney General for misrepresenting students, infringement of New Mexico law, and involvement in deceptive, unfair and unconscionable acts and practices that violate the law (ITT Tech Fact Sheet, 2016). Even though ITT marketed itself as an institution that will improve consumers' lives, it was simply focusing on enhancing its bottom line.

This history proves that ITT had intrinsic administrative and operational challenges that hindered its ability to meet its end of the bargain. Despite being aware of these challenges, ITT continued to promise its students and potential students like me heaven but delivering hell.

In light of recently proposed rules by the Obama administration, particularly the Borrower Defense to Repayment Regulations, I am eligible for federal loan discharge or forgiveness. In the past few decades, students have been eligible to apply for loan discharges in situations where they were victims of intentional fraud or infringement of state law. On this basis alone, I am eligible for loan forgiveness because ITT failed to provide quality education despite promising to do so. The institution engaged in intentional fraud by lying to me about its teaching/education prowess, financial aid, educational experience, and career placement. These promises were made during my enrolment process at a time when the institution clearly knew that it could not deliver its promised. Secondly, there is clear evidence of ITT's violation of several states laws including New Mexico law, which has contributed to its numerous lawsuits and investigation by attorneys general of different states. On the basis of violation of state law, I am eligible for loan forgiveness because ITT violated state laws regarding education and financial aid.

However, the proposed regulation, the Borrower Defense to Repayment Regulations, omits the requirement of any actual legal violation for eligibility for loan forgiveness. This requirement has been substituted by substantial misrepresentation, which means tendency or likelihood to mislead (Kerpen, 2016). There is no doubt that ITT committed substantial misrepresentation of its educational programs/services to students. For instance, ITT lied that it provides quality education that is better than MIT while the instructor hardly ever taught anything because he himself was working on his own master's program. Secondly, ITT lied about career placement since job placement assistance was virtually non-existent while the only career counselor at the school was always unavailable.

According to the Borrower Defense to Repayment Regulations, when post-secondary institutions engage in substantial misrepresentation, student borrowers may be eligible for loan forgiveness. In this case, a student's eligibility is enhanced when the school makes misleading or false statement to students or potential students about its career outcomes or necessary financing for its educational programs. When enrolling at ITT, the recruiter stated that, "98% of ITT grads are placed in jobs in their field of study." This was a misleading statement since the institution's job placement assistance is seemingly non-existent. Therefore, ITT made a misleading or false statement about its career outcome. The institution's recruiters made misleading statements in order to gain incentives from ITT rather than give prospective students the actual outlook of ITT educational environment and programs.

Moreover, the proposed rule states that a student may be eligible for loan forgiveness if the institution fails to meet specific contractual promises about educational services or program offerings. As previously indicated, ITT did not meet its contractual obligations by ensuring instructors were always there to provide necessary academic help to students. For example, I ended up teaching my class because of my background knowledge on the subject while the instructor was concentrating on his own master's program. To this extent, ITT did not meet its contractual obligation of teaching.

The proposed rule requires the borrower of the federal loan to prove that he/she reasonably relied on the substantial misrepresentation for eligibility for loan discharge or forgiveness. In this case, I reasonably relied on the information provided by the recruiter during admission into the institution. My decision to join ITT Institute was partly influenced by the recruiter's explanations of potential benefits I could obtain from joining the institution. Following my meeting with the recruiter during the admission process, everything sounded good and I was very happy to enroll at the school. I, actually, thought that my educational experience at the school will be as good as explained by the recruiter. Looking back, I was reasonably relying on the substantial misrepresentation by the school without knowledge of what my experience would end up being at the completion of my academic journey.

I feel that I qualify for the loan discharge or forgiveness because I was harmed by the misrepresentation, which influenced my decision to enroll at ITT. According to provisions of the Borrower Defense to Repayment Regulations, the Department of Education will offer "relief to borrowers who have been harmed by an institution's misrepresentation, not borrowers who could have been harmed but were not." I am currently struggling with a huge financial burden, incompetence in my field of study and inability to find a job placement because of ITT's misrepresentation. My eligibility for loan forgiveness is also supported by the fact that there are other students who acted similarly when joining ITT and are currently suffering from the same misrepresentation.

The substantial misrepresentation by ITT that has generated significant financial burden on me is further supported by the fact that the institution did not provide credible educational credentials. The proposed rule states that a borrower (student) may be eligible for loan forgiveness if he/she is harmed by being given academic credentials that are "significantly less than an institution's misrepresentation has led him or her to believe." ITT provided me with educational credentials that are far below what I was meant to believe when enrolling at the institution. After graduating from the school, I have sent out my resume and academic credentials on different job placement locations and received no work replies. In addition, my credits from ITT could not be transferred to my master's program contrary to what was promised by ITT.

I feel that the Department of Education failed in its covenant with the public to protect students from places that would knowingly and willingly cheat students out of money. I expect my government to safeguard the public to vet schools before giving out school codes and federal money. I expect my government to ensure that schools are accountable for their claims.

The unfair practices by ITT had come to the government's attention 17 years ago, but the Department of Education took very long to act. Dan Graves, a former employee, blow the whistle on ITT's aggressive sales tactics that enticed students and prospective students into unbearable debt while offering little on the education front. Since Graves and another ITT employee sued the school for systematic violation of the law regarding compensation of sales representatives, the government took 17 years to finally crack the whip. The lawsuit highlighted how ITT was abusing the system for years while defrauding the government billions of dollars in term of federal student loans.

I feel that the government, particularly the Department of Education failed to act when it needed to do so after Graves' whistle blowing. This department could have prevented students like me from unbearable burden of debt and few job prospects if it acted on the concerns raised by Graves and another ITT employee. Therefore, the Department completely abandoned its responsibility to enforce the law, Higher Education Act, and exercise strict oversight (Morgenson, 2016).

I know that the Department of Education has taken great strides in changing things for current students with everything from transparency in the cost of attendance to graduation rate and default rate being now available on the FAFSA. The Department of Education, until recently, failed to exercise strict financial oversight measures that could have prevented ITT from engaging in unfair practices that eventually harm its current and past students. My grievance is about us, the generation buried in debt from an education that did not exist and is trying to provide for a family.

With everything coming out about ITT, I now realize that my experience was not unique and I don't understand how every attorney general in every state does not take on cases for students against the Department of Education. What happened to us ruined our lives. I was victimized while a lot of people made money on a macro level. This is an evidence of substantial misrepresentation that has left me with a huge financial burden in terms of federal loan and significantly less educational credentials. Therefore, I believe that I qualify for loan discharge or forgiveness on the premise of substantial misrepresentation or fraudulent activities/practices by ITT.

Sincerely,

Darren Boyer