How Colleges Are Buying Respect

(page 4 of 4)

Browse Issues

Browse the BusinessWeek Archive

Story Tools

• post a comment
• e-mail this story
• print this story
• order a reprint
• suggest a story
• digg this
• add to Business Exchange

If a proprietary school can come in, continue to provide the same level of education, and assure viability, that's all for the better."

SECOND THOUGHTS

As Myers negotiated the sale, he says, he came to suspect that the company wasn't being forthright. When he and Rodney Conard, who chaired the college's board of trustees, worked out at a YMCA a week before the June closing, they discussed canceling the deal, Myers said. Conard says going through with the sale was the right decision.

According to Myers and Fishbein, Modany promised to leave Daniel Webster's administrators in charge. At a campus event introducing the ITT CEO to the college community, Modany promised there would be ample employment opportunities. In July, ITT laid off more than 20 Daniel Webster employees, Myers says. It believed they were duplicating functions that ITT's corporate offices in Indiana could provide, two people familiar with the company's thinking said. ITT also replaced Conard and the other trustees.

At the time of the layoffs, Myers was circulating a draft report questioning whether some of ITT's changes were in accord with the standards of the accreditation commission, which call for a faculty role in curriculum and governance. "ITT came in and said, 'We only want faculty to teach,'" Myers says. "We'll develop curricula in Carmel, Ind., and give them to you." On Aug. 5, ITT ousted him, he says. Nadine Dowling, director of the Woburn (Mass.) campus of ITT Tech, became interim president.

"ITT didn't really have much interest in anything other than having acquired a regionally accredited institution," says Myers, now president of the New England Culinary Institute in Montpelier, Vt. "If I had it to do all over again, I wouldn't have gone anywhere near ITT. The fundamental nature of the college has changed." Modany declined to comment.

Like other acquirers of regionally accredited colleges, ITT plans to expand Daniel Webster's online offerings. The company also expects to open more Daniel Webster campuses and to introduce new academic programs including accounting, education, and health sciences. "Regional accreditation was very important" to the company, said Goldstein, the Dow Lohnes lawyer. "I don't think there's any question that was the most attractive element."

Business Exchange

Track and share business topics across the Web.