If you’ve ever been home sick from work watching television, odds are at some point you’ve seen a commercial for ITT Technical Institute. It’s often a tale about a student success story, showing how the for-profit college helped a struggling young adult get a degree and begin an exciting new career.
You won’t be seeing any more of those ads.
ITT Tech announced Tuesday in a press release that it would be permanently discontinuing all academic operations. This news comes swiftly on the tail of a federal sanctions handed down by the Educational Department last week. The sanctions were seen as an effective death sentence to the school by many analysts, and after the announcement this week it looks like that is indeed the case.
According to Gizmodo, ITT Tech may have been given these penalties due to an inability to properly train students, and other shady tactics:
ITT Tech and other for-profit colleges have been widely criticized for accepting billions of dollars in government grants and loans while failing to provide adequate job training for its students. Last year, ITT Tech received an estimated $580 million in federal money (aka taxpayer dollars), according to the Department of Education.
One week after ITT Tech was prohibited from accepting federal aid, the whole company shut down. The swift closure of all of its campuses should indicate exactly how far the company went to recruit students using federal aid. Of course, there’s nothing wrong with providing federal loans to students who are seeking higher education, but ITT Tech often went a step further: The company’s recruiters preyed on students who didn’t understand the lifelong burden of debt and shouldn’t have been seeking a technical degree.
The sanctions imposed on ITT Tech prevent the school from receiving any federal aid for tuition, as well as require ITT Tech to increase its cash reserves, which were created to help support students in case of closure. ITT Tech firmly states that the sanctions were handed out without due process, hearing, appeal, or a single allegation being proven true. According to the company, all alternatives that the company believed would better serve students, employees and taxpayers were rejected, and the actions taken by the Educational Department were a “lawless execution.”
The school states, “We believe the government’s action was inappropriate and unconstitutional, however, with the ITT Technical Institutes ceasing operations, it will now likely rest on other parties to understand these reprehensible actions and to take action to attempt to prevent this from happening again.”
More from the ITT Tech press release:
It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service. With what we believe is a complete disregard by the U.S. Department of Education for due process to the company, hundreds of thousands of current students and alumni and more than 8,000 employees will be negatively affected.
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. We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution.
Effective today, the company has eliminated the positions of the overwhelming majority of our more than 8,000 employees. 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.
This action of our federal regulator to increase our surety requirement to 40 percent of our Title IV federal funding and place our schools under “Heightened Cash Monitoring Level 2,” forced us to conclude that we can no longer continue to operate our ITT Tech campuses and provide our students with the quality education they expect and deserve.
For more than half a century, ITT Tech has helped hundreds of thousands of non-traditional and underserved students improve their lives through career-focused technical education. Thousands of employers have relied on our institutions for skilled workers in high-demand fields. We have been a mainstay in more than 130 communities that we served nationwide, as well as an engine of economic activity and a positive innovator in the higher-education sector.
This federal action will also disrupt the lives of thousands of hardworking ITT Tech employees and their families. More than 8,000 ITT Tech employees are now without a job – employees who exhibited the utmost dedication in serving our students.
We have always carefully managed expenses to align with our enrollments. We had no intention prior to the receipt of the most recent sanctions of closing down despite the challenging regulatory environment that now threatens all proprietary higher education. We have also always worked tirelessly to ensure compliance with all applicable laws and regulations, and to uphold our ethic of continuous improvement. When we have received inquiries from regulators, we have always been responsive and cooperative. Despite our ongoing service to this nation’s employers, local communities and underserved students, these federal actions will result in the closure of the ITT Technical Institutes without any opportunity to pursue our right to due process.
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