The Department of Education on Thursday banned ITT Educational Services, one of the largest operators of for-profit technical schools, from enrolling new students who rely on federal loans and grants, curtailing the company’s access to millions of dollars in revenue. U.S. Sen. Ron Johnson delivered what he termed a “state of the nation” speech at the private, for profit Globe University in Green Bay, after having infamously said the solution to the nation’s $1 trillion-plus student loan debt crisis was more for-profit colleges.
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The company has 45,000 students in 38 states. Building doubts of ITT’s survivability has come at the beginning of the fall semester, which means most ITT students looking to transfer will have to wait until next spring at the earliest to begin a program elsewhere.
Education Department Secretary John B. King Jr. called the moves against ITT necessary to protect students and taxpayers.
The U.S. Department of Education is banning the for-profit college chain ITT Educational Services from enrolling new students who use federal financial aid.
The DoE sanctions have cast further doubt on whether the Indiana-based company can survive.
The department increased its requirements for ITT’s cash reserves Thursday.
A blog post by the Department of Education outlined choices for ITT students.
The federal agency ordered ITT to disclose to students that it’s not in compliance with accreditation criteria and is barred from awarding raises or bonuses to executives.
“Our responsibility is, first and foremost, to protect students and taxpayers”, King added.
ICHE is on stand by ready to help students if the school closes. The tens of thousands of students now attending ITT schools have a variety of options to mitigate harm or disruption to their academic careers.
Meanwhile It has been reported that 96 percent of Globe students take out student loans and graduate with an average of almost $45,000 in debt.
Under the new government restrictions, recently enrolled ITT students can not start classes at the institute in the fall semester, which begins September 12, using federal loans.
“At this moment, ITT poses a significant risk to students and taxpayers”, Mitchell told reporters, according to Inside Higher Ed. “If you’re a current ITT student, you have some options”.
21 News contacted officials at ITT Technical Institute on North Meridian Road in Austintown to find out how the student loan restrictions may be impacting students there.
Q: “If I need to switch to another school, will my ITT credits transfer?” In July, the company said new student enrollment dropped almost 22% to 9,910 in the second quarter compared to 12,638 in the same time a year prior.
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The council has questioned ITT’s administrative practices and financial viability. “You have to always be bringing in new students because you have those who drop out for one reason or another and those who graduate. No matter what, there’s going to be some disruption for some people”.
