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ITT Technical Institutes Shut Down Following Dept. of Education Actions

This morning, ITT Educational Services, Inc. announced that it will cease operations at all of its ITT Technical Institutes. The move comes less than two weeks after the Department of Education announced a series of actions against the for-profit school, including a ban on enrolling new students using federal financial aid.
ITT Technical Institutes
Image Credit: Dwight Burdette/Wikimedia Commons

From ITT’s statement:

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. 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 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. We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution.

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The Department of Education’s ban on enrolling students who rely on federal aid came after the school’s accrediting agency determined that ITT “is not in compliance, and is unlikely to become in compliance with [ACICS] Accreditation Criteria.”

In a letter to ITT dated August 25, 2016, the Department of Education named several requirements for the school, including:

  • Cease enrolling new students who rely on federal funding.
  • Inform returning students that ITT is not in compliance with accreditation criteria.
  • Increase its existing surety to $247,292,364, which is 40 percent of all Title IV funds received in 2015.
  • Cease paying any bonuses or raises to its management or directors, without approval from the Department of Education.
  • Provide teach-out agreements for specific ITT Technical Institutes, to ensure that students could continue their studies in the event of school closure.

The letter also referenced an earlier communication, in which the ACICS continued to question ITT’s compliance with accreditation standards, including “requirements for student achievement, as measured by retention, placement, and licensure passage rate.” Previously, in 2014, the U.S. Consumer Financial Protection Bureau sued ITT Educational Services Inc., claiming that the company encouraged students to take out high-cost private loans that led to high debt loads and a greater likelihood of default.

ITT has laid off the majority of its 8,000 employees.

“It’s unclear what options remain for the tens of thousands students enrolled at ITT institutes,” reports The Chronicle of Higher Education.

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Jen Hubley Luckwaldt
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