I know a few people who considered ITT. They all have one thing alike: they're not the smartest or most driven of people by any means. (that's two, sorry)
I'm curious... What are their student's standardized test scores, as well as high school records? I'm sure there's a pattern there that can describe some their default rates.
1) In their twenties and looking to start a career outside the military.
2) Eligible for a variety of loans, grants, and other financial services unavailable to the general public.
3) If they are still in the military, they will have much lower default rates as the military takes debt very seriously (as a representation of character really).
(IMO) none of these qualities are unfavorable to traditional institutions. Companies like ITT are 100% vultures.
source: many friends in the military
(source: prior military, used Post-9/11 GI Bill to get my master's)
Army loans qualified are sufficiently different and allowed them meet that quota without having to go the filthy route giving hefty scholarships to attract non-suckers at reasonable rates.