ITT Educational Services announced Tuesday that the company is shutting down its huge network of for-profit vocational campuses after the government barred the further enrollment of students on federal financial aid.
"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," read a statement from the company.
Most for-profit colleges rely on federal student loans, funded by taxpayers, to enroll new students; the value of loans currently taken out by ITT Tech students is as high at $500 million, according to the Department of Education. Last month, the government announced students on federal aid wouldn't be allowed to enroll at ITT, which has been accused of misleading students about the quality of the education they'll receive and the job prospects they'll have after graduation.
Officials instructed the company to prepare a plan for students who will now need to finish their degrees elsewhere. Students who left ITT within the past six months will be eligible to have their loans forgiven.
'The school's decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk.'
The Department of Education put out its own statement alleging longstanding and "significant concerns about ITT's administrative capacity, organizational integrity, financial viability, and ability to serve students."
"The school's decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk," the statement said.
California's Department of Consumer Affairs' Bureau for Private Postsecondary Education also banned ITT from accepting new students in the state while announcing plans to yank ITT's credentials to operate in California, the Los Angeles Times reported. Earlier this year, the Accrediting Council for Independent Colleges and Schools ruled that ITT "is not in compliance, and is unlikely to become in compliance" with its standards.
Nevertheless, ITT minced no words in its official statement when discussing the Department of Education's move: "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."