ITT Technical Institute Is Shutting Its Doors
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After crumbling under the weight of federal sanctions, ITT Technical Institute officially announced Tuesday that it is going out of business. The decision comes 11 days after the Department of Education banned it from enrolling new students who rely on Federal aid and required the school to increase it's financial reserves. The school did not say when exactly it will be closing.
The sanctions were imposed after the Accrediting Council for Independent Colleges and Schools found that ITT Tech “is not in compliance, and is unlikely to become in compliance with [ACICS] Accreditation Criteria," according to the DOE.
ITT Tech students' received $580 million in federal funding last year, but the school had produced only "marginal post-graduate outcomes."
The school's closing will affect hundreds of thousands of students and 8,000 employees according to a press release distributed by ITT Educational Services.
Last month, the DOE presented the following options to ITT students who might be uncertain about the school's future:
1. Students can stay at ITT Tech for now with no change to their program.
2. Students can transfer to a new school, if that school accepts their credits.
3. If ITT Technical Institute closes before a student can finish his or her program the federal loans can most likely be discharged. That's if the student doesn't want to transfer credits to a new school.
As a part of a crackdown by the DOE on for-profit colleges using federal money, the department implemented criteria that had to be met in 30 days, which the school was unable to meet.
- ITT tech could no longer enroll students who rely on federal financial aid.
- ITT Tech had to tell students that it would most likely lose its accredidation.
- The school was banned from giving pay raises, bonuses, or severance packages without the DOE's approval.
- ITT Tech had to use it's own money to cover the loans for current students.
- The school had to increase its financial reserves from $94,353,980 to $247, 292,364, or increase it to 40 percent of all Title IV aid the school received in 2015.
Increased federal scrutiny of for-profit colleges also led to sanctions that prompted Corinthian Colleges' and Brown Mackie College's closure. The University of Phoenix is currently under investigation.
