After Corinthian Colleges shut down its campuses last year, another large for-profit institution has closed its doors, leaving tens of thousands of students stranded.
ITT Educational Services announced Tuesday it was terminating its operations immediately. Established nearly 50 years ago, the company employed an 8,000-person staff with 40,000 students taking classes on campuses and online throughout the United States.
On August 25, the Department of Education told ITT it couldn’t enroll any new students who use federal financial aid. Four days later, new student enrollment ceased after the company was stripped of federal funding.
Previously subjected to state and federal investigations for numerous reasons, ITT accused federal officials of forcing the closure and denying it due process. To have access to federal student loans, schools must be accredited by a government-recognized accrediting agency. ITT Educational Services was found to have violated its accreditor’s standards more than once this year, according to the Department of Education.
In a statement, Education secretary John B. King said, “The school’s decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk. Last week, the Department of Education took oversight actions to prevent ITT from continuing to add to that risk. When we made that decision, we did not take it lightly.”
“One possible outcome of oversight actions is that a school may choose to close rather than take corrective actions, which can cause disruption and disappointment for current students,” King continued. “Ultimately, we made a difficult choice to pursue additional oversight in order to protect you, other students, and taxpayers from potentially worse educational and financial damage in the future if ITT was allowed to continue operating without increased oversight and assurances to better serve students.”
King offered to assist those affected by the shutdown. Students currently or recently enrolled at ITT may be able to have their federal loans forgiven. King said the Department of Education will post and update information about how to receive a discharge on their ITT announcements page online. Additionally, students have the option to transfer their credits to another institution. However, doing so may hinder their chances of having their federal student loans wiped clean.
For-profit school enrollment increased in the years following the 2008 recession, with weak job growth and prospective employees looking to hone their skills or switch to more popular careers.
In the Department of Education statement, King encouraged students to not feel deterred from completing their higher education. “Restarting or continuing your education at a high-quality, reputable institution may feel like a setback today, but odds are it will pay off in the long run,” he said.
