ITT Tech Closes Doors For Good
Just one week after the U.S. Department of Education banned ITT Technical Institute from admitting and enrolling new students; the for-profit giant officially announced that all school campuses would be shut down permanently. With 130 U.S. locations, the impact will be huge on their 45,000+ students.
Closed school loan discharges are expected to reach nearly $500 million - only a fifth of which will be covered by ITT’s collateral. The remaining four-fifths will be the responsibility of the taxpayers. As of now, current students and recent dropouts are eligible for discharges, but resulting from the commotion, other students may be eligible as well.
Do you believe that the U.S. Department of Education made the right decision by closing ITT Tech? Do you believe that the “refunds” for students are adequate for the damages that have been caused?
At A Glance:
- The U.S. Department of Education banned ITT Technical Institute from admitting and enrolling new students
- Following this news, the for-profit giant ITT Tech officially announced that all campuses would shut down permanently
- The shutdown not only affects over 45,000 students but also has the potential to cost taxpayers nearly $500 million
Around the Web:
Department of Education Bans ITT from Enrolling New Title IV Students, Adds Tough New Financial Oversight
U.S. Department of Education
The U.S. Department of Education today took a series of actions to protect students and taxpayers by banning ITT Educational Services, Inc. (ITT) from enrolling new students using federal financial aid funds and stepping up financial oversight of the for-profit educational provider.
This move follows determinations made by the school’s accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS) that ITT “is not in compliance, and is unlikely to become in compliance with [ACICS] Accreditation Criteria.” This comes amid increasingly heightened financial oversight measures put in place by the Department beginning in 2014 and continued and expanded in June 2016 due to significant concerns about ITT’s administrative capacity, organizational integrity, financial viability and ability to serve students.
“Our responsibility is first and foremost to protect students and taxpayers,” said U.S. Secretary of Education John B. King Jr. “Looking at all of the risk factors, it’s clear that we need increased financial protection and that it simply would not be responsible or in the best interest of students to allow ITT to continue enrolling new students who rely on federal student aid funds.”
As outlined in a letter sent by the Department to ITT, the school will no longer be allowed to participate in Title IV except under the following conditions:
To read more visit the U.S. Department of Education
Education Department Shuts Down ITT Tech
Preston Cooper | Forbes
For-profit giant ITT Technical Institute, which operates over 130 U.S. schools serving 45,000 students, announced that it would shut down for good. This comes on the heels of its announcement last week that it would no longer enroll new students, which in turn followed the Department of Education’s move to bar it from receiving federal financial aid such as student loans and Pell Grants.
Last week I wrote that the uncertain status of the then-not-yet-closed ITT Tech left students with a Catch-22. Current students could remain enrolled at ITT Tech with the hope that the school would close and they would become eligible for a closed school discharge. Or, they could withdraw from ITT Tech and enroll in a different school, but potentially give up the opportunity for loan forgiveness if they transferred their ITT Tech credits or withdrew more than 120 days before the school officially closed.
To read more visit Forbes
ITT Tech shutdown could cost taxpayers nearly $500M
Michael Stratford | Politico
The Obama administration’s regulatory crackdown on for-profit colleges has put another school out of business — setting a new bar for what enforcement could look like under a possible Clinton Education Department.
The collapse Tuesday of ITT Tech, a massive, publicly-traded for-profit education company with 130 campuses across the country, comes just 12 days after Obama’s Education Department imposed stringent new regulatory restrictions on the college chain. Taxpayers are now on the hook for nearly $500 million in federal loans that ITT students are eligible to have forgiven.
It was the most aggressive action yet by an administration that has long sparred with the for-profit education industry but had walked a delicate line in being sensitive to business interests while seeking to impose stronger consumer protections for students.
This is the second time in as many years that the crackdown has brought down one of the industry’s biggest players — and saddled taxpayers with potentially hundreds of millions in cleanup costs.
To read more visit Politico
Is the federal government trying to take down the for-profit college industry?
Danielle Douglas-Gabriele | The Washington Post
The closure of ITT Technical Institutes, a national chain of career schools with a 50-year legacy, is fueling a debate over the federal government’s aggressive policing of for-profit higher education and whether it could destroy the industry.
Education officials are holding for-profit colleges such as ITT accountable after years of consumer complaints about shoddy programs, deceptive marketing, and high loan-default rates.
The government — which has been targeting problems at for-profits for more than a decade — has handed down a series of regulations and sanctions that have put some companies on the brink of ruin.
To some experts, the collapse of ITT this week, brought on by sanctions curtailing its access to federal financial aid, is further evidence that the Education Department is going after the industry by pushing tough employment and student loan regulations — rules aimed specifically at for-profits — and by wresting power from the accrediting agency for such schools.
“The administration wants improved student outcomes,” said Michael Tarkan, senior research analyst at Compass Point. “And, yes, some of the larger for-profits have been caught in the crossfire, but those are some of the ones that have had pretty weak student outcomes.”
To read more visit The Washington Post