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For-profit educational giant ITT Technical Institute inflated its job-placement rates by counting “any job (graduates got) that somehow involved the use of a computer” and misled prospective students about the quality of its programs as part of its high-pressure recruitment tactics, the Massachusetts Attorney General alleged in a lawsuit announced Monday.
The state Attorney General's Office filed suit against ITT Educational Services Inc., which runs ITT Tech schools, in Norfolk Superior Court Thursday. From at least 2010 to May 2013, the for-profit school aggressively enrolled students based on misleading information, according to the lawsuit.
ITT Tech has two schools in Massachusetts.
“These students were exploited and pressured to enroll with the promise of great careers and high salaries, but were instead left unable to repay their loans and support their families,” state Attorney General Maura Healey said.
According to the suit, ITT Tech admissions staff told potential students it had an 80 to 100 percent job placement rate when the actual rate was around 50 percent or less. To inflate their numbers, ITT Tech allegedly counted jobs that fell outside students' field of study, including jobs selling computers at big box stores and a job providing customer service for an airline.
Further, ITT Tech placed heavy pressure on its representatives to bring new students to the schools. The Attorney General's Office said recruiters were expected to call as many as 100 people per day “and were publicly shamed or fired if they failed to meet their quotas.”
The technical college's also touted its Computer Network Systems program and hands-on training but provided students with outdated technology and absent teachers, the lawsuit alleged.
In a news release Monday, ITT Educational Services characterized the suit as a continuation of a “wide-ranging fishing expedition” on the part of the Massachusetts Attorney General's Office.
“Some of the claims rest on a biased and selective portrayal of the facts,” the company said, adding that the Attorney General's Office failed to explain how it calculated its estimates for job placement rates and calling such calculations “unreliable.”
The company said it has been under investigation by the Attorney General's Office for three years and has been cooperating with investigators. It further characterized the lawsuit as proof of “Massachusetts' woeful record of hostility toward career colleges that train non-traditional and underserved students.”
The suit is the latest in a long string of investigations into ITT Tech's practices.
Fifteen former students sued the technical college in 1998, claiming they had been duped. The school settled its claims later that year.
In 2014, the Consumer Financial Protection Bureau sued ITT Educational Services Inc. for predatory student lending, saying the school pressured students into predatory loans, coerced them to continue taking classes by making their credits nontransferable to nonprofit institutions and mislead students on future job prospects. That same year, the New Mexico Attorney General's Office also filed suit.
In 2015, the Securities and Exchange Commission charged ITT Education Services Inc., its chief executive officer Kevin Modany and its chief financial officer Daniel Fitzpatrick with fraud.
Attorneys general in at least 17 states and the District of Columbia have also opened probes into ITT Tech's practices.
Over 40,000 students attend ITT Technical Institutes at more than 130 campuses in 38 states, according to to the company.
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Credit: Ben Hendren for the Atlanta Journal-Constitution