The fallout from the ITT Technical Institute closing all of its campuses following federal sanctions imposed against the company will have an impact on the Austin campus located on Highway 290E in east Austin.
Advertisement
Citing increased financial risk, the Department of Education told ITT on August 25 the company needed to increase the surety requirement from the current $94 million to more than $247 million, which represented 40 percent of the federal financial aid received by its schools previous year.
A notice from ITT Educational Services said the closings would be permanent and idle most of its approximately 8,000 employees.
The announcement comes in the weeks after the U.S. Department of Education banned ITT from enrolling new students who rely on federal financial aid.
The Associated Press contributed to this article. The ruling came down without a hearing, and the company was not allowed to appeal it.
Among the measures, ITT was been ordered to pay $152 million to the department within 30 days to cover student refunds and other liabilities in case the company closes.
The San Diego Community College District released a statement that said its staff is exploring how the SDCCD might be able to help ITT Tech students. The company has also fired most of its employees, excluding those kept on to assist students with obtaining their records and assessing their educational options. The government said ITT couldn’t recruit students with federal financial aid, the source of 80 percent of the company’s revenue. The DOE revealed in 2015 that it was investigating the school and placed some restrictions on ITT’s access to student aid in 2015. As a result of its actions, ITT Tech has put the futures of tens of thousands of students across the country in jeopardy.
Advertisement
ITT admitted no fault in the statement, though the school has been the subject of repeated state and federal investigations this year and has twice been found out of compliance with its accreditor’s standards, according to the U.S. Department of Education.
