The Wall Street Journal laments government regulation brought down a bastion of "free market" capitalism, a contradiction in terms, and ITT billionaires are playing the victim. The bottom line is once Uncle Sam withdrew its student loan support from ITT Tech, the game was over. Shut it down completely. It is hardly free market if you depend 100% on government support.
Tyler Durden has a good post outlining the problems.
It mentions the company has laid off 8000 employees. Ha. PhDs making $30 a contact hour to teach college courses, so you might make $3000 a quarter. If you are an otherwise unemployable PhD, it better than nothing.
Their enrollments were slipping, which means they have overfished the waters. There is no one left to scam, so it was ending anyway.
A decade or so ago, to help enrich Diane Feinsteins billionaire husband, congress required the for-profit scamcenters to have a letter of credit to cover student loss exposure if one of these school went down. Since ITT began to look iffy, the Depart of Ed demanding an increase to cover the likelihood of loss.
I know on the state community college side the regulators are hammering the colleges to not do predatory enrollments, enrolling people who will not succeed but get tied up in student loans. Now this is odd. Why on one hand set up such a system, then on the other, now hammer it? I suspect it was too successful, we now have legions of people trapped by student loans and not bankruptable. It adds to the masses disillusionment. Trim the use of ex nihilo credit here.
The Community Colleges need enrollments as bad as ITT. The overcharging may be hitting a brick wall here in USA, but they can troll China for students paying cash for the overpriced classes. Ka ching!
There is a model, worked for over a thousand years, where today a 4 year bachelors degree every bit as good as one from Harvard or Stanford could be had for $32,000 total to start, with falling costs as professor and student satisfaction ever improves. (And no online courses, live sage on the stage education.) I wrote a master's thesis on it, it is a true free market in education.
Uncle Sam withdrew it's support of the ITT educational scam. Uncle Sam ought to withdraw all givernment student loan support. There should be strict separation of education and government. then we'd see more better cheaper faster in education.
Feel free to forward this by email to three of your friends.