For ITT Technical Institutes, School’s Out Completely
Posted By Arthur Murray on September 6, 2016 at 3:16 pm
The parent of ITT Technical Institutes said today it is shuttering all academic operations at the for-profit colleges, ending classes for about 40,000 students and idling nearly all of its more than 8,000 employees. Carmel, Ind.-based ITT Education Services, in a press release, blamed the action on “what we believe is a complete disregard by the U.S. Department of Education for due process for the company.”
The move comes days after the DOE suspended ITT Educational Services from receiving federal student aid dollars for new students, the latest volley in the DOE’s escalating fight against what it terms low-performing and predatory schools. U.S. Undersecretary of Education Ted Mitchell, in a release announcing the suspension, cited multiple state and federal investigations over the past year that he said uncovered at least two instances where ITT violated accreditation standards. In addition to the federal aid ban, the DOE required the company to post an additional $153 million letter of credit to boost its cash reserves to support students in case it closed.
ITT Educational Services, which operates six schools with 130 campuses in 38 states, went down fighting. “These unwarranted actions, taken without proving a single allegation, are a ‘lawless execution,’ as noted by a recent editorial in The Wall Street Journal,” the company said in the release. “We were not provided with a hearing or an appeal. Alternatives that we strongly believe would have better served students, employees, and taxpayers were rejected. The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable.”
What comes next for ITT Technical Institute students?
The DOE, in a blog post on its website, didn’t apologize for its recent action: “When we made that decision, we did not take it lightly. One possible outcome of oversight actions is that a school may choose to close rather than take corrective actions, which can cause disruption and disappointment for current students. 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 …”
The blog post says ITT Technical Institute students have two options:
- Current or recent ITT students may be eligible to have their federal student loans discharged – they can then have the option to restart their education at another institution. See the DOE’s ITT announcements page for more information.
- Students, especially those near graduation, may be able to transfer credits to another school. It warns that transferring credits may limit a student’s ability to have his or her federal loans discharged.
The action shutting down ITT Technical Institutes comes more than a year after the closure of several campuses of Corinthian Colleges, another big player in the for-profit education industry. Corinthian’s remaining 24 campuses were purchased and converted to nonprofit career-training schools. ITT said it explored the transfer of its campuses to a non-profit or public institution but was unable to make the move.
Actions against ITT Technical Institutes were hailed by many, including U.S. Sen. Elizabeth Warren, D-MA. “ITT’s free ride is finally over, and the message couldn’t be clearer: We will no longer stand by and allow these shady institutions to bilk taxpayers and cheat students,” she wrote in a Facebook post.