ITT Technical Institute stops enrolling new students

For-profit technical school takes action after the federal government put restrictions on who can enroll.

Aug. 30, 2016

2 min read

In the wake of federal action that severely restricted its ability to enroll students, ITT Technical Institute, a for-profit chain of technical schools, has stopped enrolling any new students.

CNN reports that the school's announcement comes days after the U.S. Department of Education barred its parent company, ITT Educational Services, from enrolling students who use federal financial aid. That means students who are enrolled at ITT, but haven't yet started classes are not allowed to use federal aid to finance their education. Current students who have already started classes can still use federal aid as long as the school remains open.

The company operates more than 130 campuses in 39 states and online and has more than 40,000 students in undergraduate and graduate programs. Enrollment has been dwindling at the schools. In July, the company said new student enrollment dropped to 9,910 in the second quarter compared with 12,638 in the same time a year prior.

Along with cutting off some access to federal money, the federal government is also requiring the company to increase its cash reserves and provide a letter of credit showing sufficient funding.

Following the department actions, observers say ITT may be forced to go out of business.

In recent years, the Education Department said, it had increased its financial oversight of ITT and required the school to boost its cash reserves to cover potential damages to taxpayers and students.

Stating that ITT had failed to address its accreditor’s concerns, the education department announced on its Homeroom blog that it was restricting enrollment.

"To protect prospective students and taxpayers, we’re no longer allowing ITT to enroll new students with federal aid," Education Under Secretary Ted Mitchell said. "In addition, in case the school’s actions cause it to close, we’re increasing the amount of cash reserves it must send us and we’re ending its installment payment plan for the amount previously required. Finally, we’re slowing down when ITT receives student aid from the government to ensure that ITT is handling its finances properly."