Before he moved to Miami, Waltter Teruel sold antiques and life insurance in New York. Working as a recruiter at ITT Technical Institute in Hialeah was a welcome change. “I mean, if you’re a salesperson, you have to lie through your teeth,” he said, “but in this case, it’s one of the sales where you actually don’t have to lie at some point.”
For-profit colleges have been investigated for outlandish sales tactics in recent years, from faking foreign diplomas to hiring strippers as recruiters. But when ITT Technical institute closed in September, employees there remembered nothing so exotic. Instead, they shared sleek, tightly designed sales tools that offer a glimpse of the strategy that helped ITT grow, and ultimately contributed to its downfall.
ITT shut down 130 campuses within days of a ruling by the Department of Education that it could no longer enroll new students using federal loans, which accounted for 80 percent of ITT’s revenue in 2015. But the Department of Education’s action came after years of mounting scrutiny over ITT’s financial disclosures and aggressive recruiting techniques.
“These students were pressured to enroll with the promise of great careers and high salaries, but were instead left unable to repay their loans and support their families,” said Massachusetts Attorney General Maura Healey in April, when her office filed a complaint against the company.
As recruiter Teruel recalled, ITT Tech took care of the pitch for you: Recruiters used scripts set out in detailed Powerpoint presentations and got long lists of prospective students to call. “Most of these students—they were looking for a job,” Teruel said. If you searched online for construction or HVAC work, you might see a popup window asking if you wanted to study and work at the same time, with the tagline, “Do you want a job or do you want a career?” Teruel said.
Fill in your information and you’d get a call from a recruiter—or maybe 10 calls. The “3x3 rule,” set out in ITT training materials from 2015, instructs recruiters to call “a minimum of three times a day for the first three days.”
“Sometimes representatives worry that if the prospective student has Caller ID, placing three calls in one day makes them appear too assertive,” reads one slide. “However, as long as your first message states that you are trying to reach him or her, you are only doing what you promised you would do—continuing to call.”
The goal was to reach people as soon as possible after a lead was generated, and then get them to come in for a meeting. Echoing language used in a training presentation, Teruel said recruiters were supposed to frame the meeting in person as a “coming attraction,” and avoid answering too many questions on the phone.
“Maybe if you give them too much information, they won’t want to come in,” he said. “How about today at 2 o’clock or tomorrow at 11 o’clock in the morning?” Teruel remembered proposing to prospective students. “We put the times like we don’t have space.”
ITT set high targets for the number of calls, appointments, interviews and enrolled students each representative was asked to generate, targets one recruiter called “almost unreachable.” Every step of the process was carefully designed to learn what motivated prospective customers: On-campus visits began with a questionnaire: the WITY, or “What’s important to You.”
Teruel said that questionnaire served as a backbone for the interview: if an applicant said, ‘I’m tired of making minimum wage’ or ‘I want to better support my family,' recruiters could remind them what brought them there in the first place.’ “Why are they choosing that school? Why are they choosing an associate’s degree?” Teruel said. “We go through the process, and then we kind of rephrase it: This is important to you, because…”
“I think that the person they were selling to was intimidated by schooling, hadn’t explored this option before and really really wanted to change things around in their life,” said sales guru Jill Konrath, after reviewing two ITT Powerpoint presentations.
Konrath, who has consulted for companies like Microsoft and General Electric, called it a “highly scrupulous” approach that was “better thought out than what I see at most corporations.”
“They really understood conversion ratios,” she said: that is, how many calls it took to generate one appointment and how many appointments it took to enroll a new student. And, like people selling cars or vacation home rentals, Konrath said, ITT Tech seemed to view college enrollment as a “one-call close.”
“That’s what drives all these numbers. They have one chance to get people to sign up. My guess is they had numbers showing that if the people come in and walk out that door, the chances of them coming back were slim to none.”
Alyssa Calixto, who completed a nursing program at ITT Tech shortly before the colleges closed, remembers her recruiter in St Petersburg saying again and again how flexible the school was: that the class schedule wouldn’t interfere with her job or taking care of her young daughter. “The way she presented everything just made everything seem so exciting,” she said.
“She pretty much sold me that first day, and I signed up right away.” The time it took to get from walking in the door to signing paperwork on tens of thousands of dollars in students loans,” Calixto thought, was, “probably about 30 minutes.”
ITT Tech’s total enrollment more than doubled from 2000 to 2010. During the same period, it also expanded its course offerings into new areas like game design and law enforcement. Many of these new programs, did not lead to jobs with a “return on investment,” said Georgeta Railic, director of career services at ITT’s Hialeah campus, who spent nearly 20 years with the company.
During the recession, Railic watched with dismay as the school eliminated entrance exams and admissions screening for some programs. “The quality went down,” she said, speaking of new students, “and accordingly made everybody’s job tougher.” Even as tuition costs continued to rise—by the time ITT Tech closed, the cost of associate’s degree programs reached nearly $50,000—many students finished without job prospects that would allow them to pay off their loans.
Many students who enrolled in the criminal justice program, for example, may not have been aware that no associate’s degree is required to become a police officer. And even with associate’s degrees, Railic says poor credit and failed background checks kept many students from getting hired at local police departments. Instead, many wound up in low-paying private security jobs. “The highest security officer position that I helped students get paid $12.50 an hour,” Railic said.
According to the Florida Board of Nursing, in 2014, just half of ITT nursing students passed their professional exam. Both the nursing and criminal justice programs were ultimately suspended at many ITT campuses. Still, Railic said she kept hoping the school would stick to the IT and engineering programs where students had the best prospects for employment.
But something in the corporate culture had changed. “Profits became more important than the lives of people,” she said.