ITT Educational Services, under fire for more than a year from the Consumer Financial Protection Bureau, issued a statement in response to Rohit Chopra, former student loan ombudsman for the CFPB. The response letter from Nicole Elam, vice president of government relations and external affairs at ITT, was sent to investors.
Chopra, now a senior fellow at the Center for American Progress, earlier this week wrote ITTs investors and asked them to reform the for-profit institution. "I have serious concerns that ITT is not properly managed. Unless investors provide more vigorous oversight over management and the board, ITT will continue to harm both its students and its shareholders, Chopra wrote.
Indiana-based ITT is facing lawsuits from state and federal agencies for allegedly guiding students to predatory loans and lying to investors about high default rates on those loans. The company has been compared to Corinthian Colleges.
The response letter from ITTs Elam criticized Chopras view and perceived bias against for-profit educational institutions. "Putting aside the troubling fact that Mr. Rohit Chopra is attempting to impact investors of a publicly traded company with information he received while in an official capacity at a U.S. governmental agency, his letter is a perfect example of the myopic view pervading some in D.C. regarding taxpaying educational institutions. The fact that he would write such a letter to investors days after leaving the [CFPB] trumpeting mere allegations against the company demonstrates a personal bias against our institutions and an unwillingness to allow for due process to work, the cornerstone of the U.S. legal system. Allegations are not facts and we think our investors will not take action based on simple assertions from someone with an ideological axe to grind.Last year, the CFPB sued ITT and accused the company of exploiting its students by pushing them into high-cost private student loans that likely would end in default.
Earlier this month, the U.S. Department of Education ramped up monitoring of ITT after the Securities and Exchange Commission filed civil fraud charges against it and two executives, the company revealed.
ITT must provide cash flow projections every two weeks, along with other information about financial transactions, planned school closures and expected new program offerings. The company also must provide the Education Department with a monthly roster of its 51,000 students, detailing anticipated graduation dates, enrollment status and individual contact information.
ITT already was operating under restrictive conditions regarding its access to federal money. The Education Department imposed heightened cash monitoring last year after the company failed to file annual financial and compliance audits on time. The company said Friday it expects its institutions to be subjected to [heightened cash monitoring] until at least November 2019.