Following federal sanctions, ITT Technical Institute shuts down all its campuses
In the wake of federal sanctions, ITT Educational Services Inc. says it is closing all ITT Technical Institute campuses.
The Indianapolis Star reports that ITT, a for-profit chain of technical schools, has been reeling from the U.S. Department of Education's decision in late August to bar the institution from enrolling new students who depend on federal aid. The federal agency also required the company to warn students that its accreditation was in jeopardy and was told that it must increase its reserves from $94.4 million to $247.3 million.
In the face of those obstacles, the company announced Tuesday that it would shutter operations.
"It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service," the company says in a news release. "With what we believe is a complete disregard by the U.S. Department of Education for due process to the company, hundreds of thousands of current students and alumni and more than 8,000 employees will be negatively affected."
The school offered on-campus and online classes in business, nursing and health sciences, electronics and information technology. It operated 137 campuses across 39 states and had 40,000 students as of June 30.
"The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes, and we will not be offering our September quarter," the company's announcement continued. "We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution."
Federal officials acknowledged Tuesday that when they imposed sanctions last month, they knew it could result in ITT"s closing.
"Ultimately, we made a difficult choice to pursue additional oversight in order to protect you, other students, and taxpayers from potentially worse educational and financial damage in the future if ITT was allowed to continue operating without increased oversight and assurances to better serve students," Education Secretary John King said in a message to students posted on the department's Homeroom blog.
Kingt says that students currently or recently enrolled at ITT may be eligible to have their federal student loans for ITT programs wiped away, and they will have the option of restarting their education elsewhere. Students who wish to complete their programs at a different school may be able to transfer your credits. However, transferring credits may limit a student's ability to have federal loans discharged.
"Both of these options have pros and cons, depending on your unique circumstances, so it is important that you consider your specific situation carefully," King says.
ITT says it has eliminated the positions of most of its more than 8,000 employees. The remaining staff will help displaced students with their records and future educational options, the company says.
ITT last year generated $850 million in revenue, about $580 million of which came from federal student loans.
