It wasn’t only the Education Department that punished ITT.
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Students received an email today stating that due to the new requirements by the Department of Education, which banned the school from enrolling students who get federal aid, they’ve made the decision to discontinue their operations effective June 2016. Almost 8,000 employees nationwide are also without a job, as a result of the closings.
The federal regulator had demanded the company to increase its collateral to $247 million, up from $94 million, with in 30 days.
In this morning’s announcement, ITT criticized the federal action.
“I also ask that your department fully inform all those affected of their option to refuse a planned teach-out and instead seek forgiveness of their outstanding federal student loans through the Closed School Discharge program”.
ITT Educational Services is based in Carmel, Ind.
“For what appears to be political reasons, there seemed to be an outcome in mind that was going to be forced here”, Modany said.
As of Tuesday, a notice on the company’s webpage said: “We are now not enrolling new students”.
ITT Technical Institute blames the government for the closure.
“Our focus and priority with our remaining staff is on helping the tens of thousands of unexpectedly displaced students with their records and future educational options”, ITT said in a statement.
Students were surprised to learn that their school, ITT Technical Institute, is shutting down and all their hard work over the years is now in question.
Martinez finished that degree at the Oakland, Calif., campus. He’d like to transfer to a community college, but classes have already started. The government’s reasoning is that ITT Tech failed to properly get accredited by a government-recognized accrediting agency.
As for the students ITT Tech left behind, they are left with student loans and credits that most likely will not transfer. That’s an estimated $500 million worth of loans, a cost that would be covered by taxpayers and $90 million in insurance that ITT previously paid the department.
The Department of Education is also planning a series of webinars.
This spring, ITT was the fifth-largest for-profit college chain, and was among several under scrutiny by the Obama administration, which said the for-profit industry in general uses deceptive marketing tactics to enroll students who accrue thousands of dollars of debt for low-quality educations.
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The ITT news release said it was with “profound regret” that the company announced the closings, which affect 130 locations across the country.
