News Releases

Statement from ITT Technical Institute to Senator Durbin

May 29, 2015

CARMEL, Ind., May 29, 2015 /PRNewswire-USNewswire/ -- Kevin Modany, chief executive officer at ITT Educational Services, Inc., wrote the following letter in response to U.S. Senator Richard Durbin:

May 29, 2015

The Honorable Richard Durbin
United States Senate
711 Hart Senate Office Building
Washington, D.C. 20510

Dear Sen. Durbin,

I am writing in response to your May 28, 2015 letter to Eugene Feichtner, President and Chief Operating Officer at ITT Educational Services, Inc.

First and foremost, no one is more concerned about our students than we are. We devote substantial resources to helping our students succeed academically and find employment. To our knowledge, you have never visited one of our campuses to see the good work we do every day to educate our students and help them find employment in their chosen field of study. If you would like to learn more about our institution and inform your perspectives regarding our faculty, staff, students and the employers who hire them, please feel free to contact me to arrange for a visit at a location of your choosing. I would be pleased to offer you a tour of one of our campuses and an opportunity to meet some of the 8,000 employees, 50,000 students and 14,000 employers that have hired one of our graduates in the last two years. They will do a better job than I can of explaining the investment that they make in successful student outcomes and the attributes of our institution that make it a very special place.  

The success of our investment in our students is reflected in our student outcomes. Our graduation rates are approximately twice the average graduation rates of community colleges, which serve the same student demographic based on U.S. Department of Education data. Approximately 70% of our 2014 graduates obtained employment in positions using knowledge and skills taught in their programs of study based on standards set by our accrediting body, which is recognized by the U.S. Department of Education. And, the average annual salary reported by our 2014 graduates was twice the average annual salary reported by a student before entering our programs of study. We are helping students build better lives, secure employment and earn higher salaries.

With regard to your assertion that scrutiny of our schools is "well-deserved" based on allegations, I challenge that. The New Mexico attorney general, the Consumer Financial Protection Bureau (CFPB), the U.S. Securities and Exchange Commission (SEC), and the multi-state attorneys general investigations did not "find" anything. Any claims made by these entities were, at the time, and remain today, allegations and not final dispositions by a neutral party. As you know too well, allegations (particularly those that are potentially motivated by politics and ideology) are not findings of fact.

ITT Tech has and will continue to cooperate with any federal or state agency examinations of our institutions and practices. We have committed our professional lives to our students, and we will not shy away from defending that commitment.

With regard to the CFPB and SEC allegations, I want to make clear that we could not more vehemently disagree with the substance and the basis for these two unjust complaints. They are filled with factual inaccuracies and materially misrepresent the substance and reality of the matters that are the subject of these actions. That said, we are not interested in trying this matter in the court of public opinion but instead are focused on presenting the facts in the appropriate forum. We anxiously await the opportunity to defend ourselves against these unsupported and misrepresented claims and remain confident and steadfast in our views that the facts will overwhelmingly support our positions. As an elected official sworn to support the Constitution of the United States, surely you appreciate and uphold our constitutional right to due process.

We have spent the last several years working with regulators to address the complex accounting issues related to the two short-lived, third-party loan programs. We believe that the facts we will present in response to the CFPB and SEC allegations will result in a conclusion that our actions and the loan programs were appropriate and lawful. Let me repeat, we are anxious to present our case. Until then, allegations are nothing more than allegations. They are not findings of fact.

To further evidence our focus on the best interest of our students we have materially increased the amount of institutional scholarships awarded. Today, as a result, 99.9% of our students do not rely on private student loans to finance their education. Our commitment to reducing the debt of our students does not stop there. After four years of refusing to increase our tuition, we instituted a tuition rate freeze in 2014 and awarded over $240 million in scholarships to students. Through these actions, the average total debt of an associate degree graduate, which is approximately 85% of our population, has been reduced approximately 25% from just five years earlier. Our default rates also compare favorably to the community colleges' national averages. Our 3-year 2012 cohort default rate is 19%. The latest rate for community colleges is 21%. 

Your letter also addressed arbitration clauses. I feel compelled to clarify that arbitration clauses by no means block a student's right to a fair hearing. Instead, arbitration is an extremely efficient, cost-effective and expedited way to resolve differences that may arise between a student and their school. To ensure our clauses fully protect student rights, we recently certified our arbitration clause under the Consumer Due Process Protocol, working with a not-for-profit organization with a long history of experience in the field of dispute resolution. Further the U.S. federal government has a strong and long-standing policy in favor of arbitration as a means to resolving disputes. 

As you likely know, the use of arbitration clauses is a common practice throughout much of higher education and not limited to enrollment agreements. Accordingly, to single out our institution for a practice that is widely utilized by both tax-paying and taxpayer-subsidized institutions is unfair. That having been said, if you would like to end arbitration clauses for the benefit of students, which we believe would be a mistake, we might suggest that you work with other elected officials in Congress to enact a bill that would limit the use of arbitration clauses throughout all of higher education and for all purposes – not just at our institution.

Please take us up on our offer to visit us on-campus and discuss your concerns with ITT Tech in person.  We look forward to seeing you at your earliest convenience.


Kevin M. Modany
Chief Executive Officer
ITT Educational Services, Inc.

SOURCE ITT Educational Services, Inc.

For further information: Nicole Elam, 317-706-9200