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ITT Technical Institute (often shortened to ITT Tech) was a for-profit technical institute. Founded in 1969 and with approximately 130 campuses in 38 states of the United States, ITT Tech was one of the largest for-profit educators in the US before it closed in 2016. While some students have received debt relief through US government action, many continue to struggle with debt that they accrued as students at the school.
In August 1998, 15 former students alleged misrepresentation, fraud, and concealment by ITT arising out of their recruitment and education at ITT campuses. In September 1998, ITT settled all of the claims.
In 2004, federal agents raided the company's headquarters and ten of its campuses in Indiana, Texas, Virginia, Florida, Louisiana, Nevada, California, and Oregon. 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 got 100% on a computer forensics assignment by emailing the professor a noodle recipe. The station believed this to be a way to increase 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 went 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.