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ITT Tech, Rep. John Kline's former BFF, shuts down amid investigations

Minnesota Congressman John Kline took nearly $1 million from the likes of ITT, purveyor of joke degrees and insurmountable debt.

Minnesota Congressman John Kline took nearly $1 million from the likes of ITT, purveyor of joke degrees and insurmountable debt. Associated Press

Five years ago, rivers of greenbacks flowed to ITT Tech.

Students numbering 50,000 enrolled at about 130 nationwide campuses, generated almost $500 in profits in 2009 for the for-profit college headquartered in the Caramel, Indiana. That same year President Kevin Modany's compensation approached $8 million.  

Roughly 90 percent of every dollar ITT received came from taxpayers. Students relied heavily on federal loans and Pell Grants to satisfy the school's lofty tuition costs, which approached $50,000 for a two-year degree.

But last month the U.S. Department of Education said no more to ITT's all-you-can-eat seat at the public feed box. It banned the company from enrolling new students who receive federal aid.

That blow proved fatal. Yesterday, ITT announced it would "discontinue academic operations at all of its… [campuses] after approximately 50 years of continuous service."

ITT, once among the nation's most profitable for-profit colleges, had to see this coming. It faced increased scrutiny of a business model which invested heavily in marketing to non-traditional students -- a.k.a., the poor and military vets -- then saddled them with mountains of debt and degrees most employers regarded as bad jokes.

ITT is currently under investigation by more than a dozen state and federal authorities, including the Consumer Financial Protection Bureau and Massachusetts Attorney General.    

One of the besieged educator's most longstanding patrons was  Rep. John Kline (R-Burnsville), Minnesota's Most Reprehensible Congressman (TM), who pocketed about $1 million in campaign donations from for-profit colleges like ITT.

For years, it was money well spent. Kline played the role of resolute obstructionist to any meaningful reform of for-profit schools. As chairman of the House Education and the Workforce Committee, he allowed the predatory institutions to feed off federal student monies to the tune of about $32 billion every year.    

Kline is retiring at year's end. In recent months, the once-unwavering defender of the industry has turned strangely quiet. Even Kline could no longer justify their methods with boilerplate platitudes of educational freedom and government overreach.

ITT's announcement has immediate and lingering consequences. More than 8,000 employees need to find new jobs. Approximately 40,000 students in 38 states must look to other institutions to continue their education. Current and former ITT enrollees, who collectively owe $500 million in loans, could seek debt forgiveness, according to federal officials.

ITT currently has $90 million set aside for loan forgiveness, which means taxpayers will be on the cuff for the remaining balance.

City Pages called Kline spokesperson Troy Young to see how the lawmaker was taking the news of his former ally's demise. Apparently, not well. Repeated messages went unreturned.