The schools decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk, says U.S. Secretary of Education John King Jr.
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The for-profit chain of technical schools with more than 40,000 students at 130 campuses in almost 40 states has been the subject of a variety of state and federal investigations over its recruitment and accounting practices, among other issues.
Federal aid provided 68 percent of parent company ITT Educational Services Inc.’s $850 million in revenues.
As of today, officials from the institute’s headquarters in Carmel, Indiana said they will be closing all ITT Tech locations.
The company said it will eliminate the positions of most of its 8,000 employees nationwide.
The move, effective immediately, is expected to affect more than 8,000 employees and “hundreds of thousands” of current and former students.
In an editorial, The Wall Street Journal recently called the Education Department’s decision to cut off funding a “lawless execution” and said the action was taken without proving a single allegation.
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The closure comes in wake of the Obama administration’s crackdown to protect “students from abusive career colleges” and “to grant students loan forgiveness if they were defrauded or deceived by an institution”, according to a Department of Education release.
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Some students are hopeful their credits will transfer to another agency. “In response, over the last couple of years, we at the Department of Education have increased our financial oversight over ITT and required the school to boost its cash reserves to cover potential damages to taxpayers and students”. It had also been investigated by state and federal authorities who accused ITT of pushing students into risky loans and of misleading students about the quality of programs. Education Department leaders are also urging community colleges to contact ITT students and welcome qualified students.
