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