Industry News
Federal Ban Leads to ITT Tech Shutdown
A for-profit college chain announced today that it would shut down all of its schools nationwide following recent federal actions. ITT Education Services is ceasing operations at 137 schools and eliminating 8,000 employees, less than three weeks after the United States Department of Education cut off federal funding to the company.
On Aug. 25, the Education Department banned ITT Technical Institutes from enrolling new students who use federal financial aid. Following the ban, it prohibited the company from awarding executives any kind of bonuses and required the company to develop “teach-out” plans to help current students complete programs at other universities if ITT Tech were to shut down.
The company has operated 130 vocational schools in 38 states for the last 50 years. In 2015, ITT reported $850 million in total revenue, of which $580 million was sourced from federal aid.
ITT held the federal government responsible for its closure. “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,” ITT said in a statement. The remaining staff members will stay on board to help approximately 40,000 “unexpectedly displaced students with their records and future educational options.”
Secretary of Education John King published a blog post today that is addressed to ITT students. In the post, King outlines two options for current and recently enrolled ITT students: discharge their federal student loans (wiping away debt) or transfer their credits to another program.
Further information about the closure is available on the ITT site.
About the Author
Sri Ravipati is Web producer for THE Journal and Campus Technology. She can be reached at [email protected].
