BOSTON — ITT Educational Services Inc. paid $20.8 million for debt-ridden Daniel Webster College in June. In return, the company obtained an academic credential that might generate a taxpayer-funded bonanza worth as much as $1 billion.
ITT Educational — operator of 105 ITT Technical Institutes — is the third-biggest higher education company in the United States. Its $3.8 billion market value may increase it by 26 percent, or $1 billion, within five years because of the purchase of 1,200-student Daniel Webster in Nashua, N.H., according to Michael Clifford, an investor in Del Mar, Calif., who has participated in the acquisitions of four nonprofit colleges.
At least 75 percent of new revenue would come from access to the more than $100 billion a year in financial aid the U.S. hands out to college students, he said.
Key to tapping that money is Webster's regional accreditation, which is the same gold standard of academic quality enjoyed by Harvard University and helps students transfer course credits from one college to another.
