Many people in the United States would be surprised to learn that the profit motive in “higher education” is not something that just magically appeared during the second half of the 20th century. A large number of for-profit colleges, institutes, and “universities” were founded in the decades after the end of the Second World War. Having “profit” as a motive for setting up and operating for-profit schools, however, had its genesis in the United States long before the 20th century; the roots of for-profit education can be traced all the way back to the Colonial era before the 13 original colonies were formed into states that, taken together, became the union that we know today as the “United States of America”.
“For-Profit Education” – historical perspective in a nutshell
According to author Richard Ruch, (see “Higher Ed, Inc.: The Rise of the For-Profit University”) in the earliest days of the Colonial era there were insufficient places for people to get a formal education, so business men established for-profit schools where trades, as well as the “three R’s” (reading, writing, and arithmetic) were taught. Ruch writes: “Many of these [entrepreneurs] were clergy who weren’t paid very much and had to supplement their income”. In that era, Clergy were amongst the educated and, according to Ruch, “…they would offer classes in their homes or in the parsonage or in the church and charge a fee”.
Ruch points to one of the “founding fathers” of the Republic, Benjamin Franklin, as an “early champion…” of for-profit schools, pointing out that, “Franklin himself was largely a product of self-education and the system of apprenticeship brought over from Europe.” In those early days, Franklin and other supporters of for-profit schooling were “constantly fighting ‘Latinists’ whose ideas about education were based on the British models of Cambridge and Oxford”. As stated with alacrity in Ruch’s book, “The early American colleges devoted themselves almost entirely to the teaching and study of theology, Greek and Latin languages, classical literature, and philosophy.”
In short, more practical subjects like basic agriculture, surveying, and the like were not being taught to the “common man” and education, then, was reserved for a “higher” class of individual. According to Ruch, “In 1723, nearly sixty percent of the books in the Harvard College library were about theology…” and, “…only two books (in the library) were about commerce.”. Benjamin Franklin was one of the earliest proponents for “…a new approach to education”. In a nascent nation struggling to develop and find its place amongst more established countries and cultures, Franklin wanted people to be trained in trades that would help foster and build a vibrant economy. As noted by author Ruch, Franklin, complaining about his contemporaries and their approach to education, “…lamented in his journals…” of “…and unaccountable prejudice in favor of ancient customs and habitudes”.
Teaching such subjects as navigation, surveying, and agrarian agriculture, to name a few, for-profit schools were themselves a product of demand. Over the years, as the colonial economy developed, grew, and expanded, the emerging for-profit schools changed as well and began offering courses and instruction with new trades and skills such as engineering, technical drawing, bookkeeping, and more. As Ruch writes in “Higher Ed, Inc…”, the new, emerging schools “played a particularly important role in opening up education to women, people of color, Native Americans, and those with disabilities, especially blind and deaf people.”
While the advent and growth of for-profit schools, at least initially, is attributable to the narrowness of what (and who) the “traditional” schools were teaching (and reaching), for-profits were for people who did not have access to the more traditional colleges and universities. For-profits offered a different and unique type of career training that the “traditional” schools ignored – something more than mere “vocational” training but somewhat less than a full, four-year comprehensive education leading to, at a minimum, a bachelor’s degree.
Once a powerhouse in the for-profit higher education sector, ITT Technical Institutefiled a Petition for Chapter 7 bankruptcy on September 16, 2016. The debtors’ petition was filed with the United States Bankruptcy Court for the Southern District of Indiana by ITT Educational Services, Inc., ESI Services Corporation, and Daniel Webster College, Inc. The named debtors were all operated in close association with ITT Technical Institute (most often referred to, and universally known as “ITT Tech”). On September 6, 2018, ITT Tech abruptly ceased operations and closed all of its educational and business locations ahead of the bankruptcy filing ten days later.
Storied “pedigree” – International Telephone and Telegraph
ITT Tech was first establishedin 1946 as a “technical school” after the end of the Second World War (popularly, at the time, “tech” schoolsprovided an alternative means of higher education – vocational or “practical” training – for students who were not college-bound or perceived, by sociologists, pundits, and admission authorities alike, as “suitable college material”).
At its founding, the business went by the nameEducational Services, Inc. (“ESI”).In 1946, and until its IPO (“initial public offering”) in the early 1990’s, ESI was a wholly-owned subsidiary of the innovative technology company,International Telephone and Telegraph (“ITT”). ITT, founded in 1920, had long been one of the “giants” in the telephone/telegraph industry,in league with such other industry leaders and early technology innovators as General Electric (“GE”) and Western Electric (today, Western Electric operates under the brand identifier and corporate name, Lucent Technologies).
Center for American Progress: “ITT Tech Closure Long Overdue”
To some, the seemingly inevitable (and, eventual?) demise of ITT Tech was a long while in coming. It was surely not entirely unforeseeable (as some have claimed since the for-profit ITT Tech closed its doors); myriad reasons for its downfall can be summed up, as one commentator put it in late September, 2016, as “…an epic failure on many levels”.
While ITT Tech blamed the United States Department of Education for its closure and failure, others laid the blame squarely on the company itself. Ben Miller, a senior director at the Center for American Progress (and, coincidentally, a former senior policy adviser with the Department of Education), told Business Insider: “The reason why this action took down ITT was because of choices repeatedly made by management for years that weakened the school, harmed students, and ultimately tarnished a brand that used to have value.” Miller went on to say that the closure of all of ITT Tech’s facilities was a move that was “long overdue”, while going on to addthat ITT Tech’s, “…concern about growth and profits… trumped a quality education for students…”.
ITT’s sudden action in September, 2016, saw the closure of approximately 130+ campuses and the cessation of all business functions of the company. The end result of such moves was displacement of some 35,000 – 40,000 enrolled students and the permanent layoff of approximately 8,000 employees. The Chapter 7 bankruptcy petition listed assets and liabilities at between $100 million and $500 million (figures that some analysts say is off-the-mark – on the low side – by a considerable degree).
Photo credit: ITT Tech/Facebook
