ITT Technical Institute is shutting down all campuses after the U.S. Department of Education banned it from enrolling new students who use federal financial aid.
ITT Educational Services owns and operates more than 130 for-profit vocational colleges nationwide
“The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes, and we will not be offering our September quarter,” the company said in a statement. “We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution.”
The Carmel, Indiana-based company said Tuesday that hundreds of thousands of current students and alumni and more than 8,000 employees will be affected.
“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,” the company said in the statement.
The government annually doles out more than $100 billion in loans and grants to students. Colleges rarely face any consequences if their students fail to graduate or subsequently default on their debt. But an increasing array of allegations that ITT misled students about its success at placing graduates in their fields and defrauded investors — the company faces pending lawsuits from the federal Consumer Financial Protection Bureau, Securities and Exchange Commission, and the Massachusetts attorney general — led the Education Department to restrict the company’s access to taxpayer funds. ITT has denied the allegations.
ITT Tech had one of the most complex affiliate and lead generation programs in the industry, and most affiliates and publishers have reported that they have not been paid. ITT Tech hasn’t returned calls regarding payment, but the sudden shutting down of the company is not a good sign
ITT Tech stopped enrolling new students on Aug. 29.