ITT Educational Services
announced Tuesday it is closing its doors immediately.
The for-profit company
offered online and on-campus courses to about 40,000 students.
The company accused the U.S. government of treating it unfairly.
The U.S. Department of Education released a statement saying ITT had been "the subject of numerous state and federal investigations" in recent years.
Last month, the organization that accredits ITT -- the Accrediting Council for Independent Colleges and Schools (ACICS) -- said ITT was not “in compliance, and is unlikely to become in compliance with [ACICS] Accreditation Criteria,” wrote U.S. Secretary of Education John B. King Jr.
Without accreditation, a school is not eligible to access student aid, and without student aid, a school is not likely to attract many paying students.
ITT had received $1.1 billion
annually in taxpayer funds, reports non-profit advocacy group Republic Report
. It described ITT as engaging in "predatory and reckless practices." From federal public documents, Republic Report cited issues with recruiting, student loans
"ITT has been under investigation or sued
by the Securities and Exchange Commission, the Consumer Financial Protection Bureau, and the attorneys general of New Mexico, Arkansas, Arizona, Connecticut, Idaho, Iowa, Kentucky, Missouri, Nebraska, North Carolina, Oregon, Pennsylvania and Washington," Republic Report wrote.[Listen to the Department of Education's Q&A conference about ITT and debt forgiveness here.]
The Department of Education said ITT students have two options:
Current or recently enrolled students "may be eligible to have your federal student loans for your program at ITT discharged. Your federal loan debt will be wiped away and you will have the option of restarting your education somewhere new."
Second, if a student transfers to a different school, they may be able to transfer your credits.
"It is important to note that transferring your credits may limit your ability to have your federal loans discharged," King said in a press release. "Closed-school discharge may be an option if you enroll in a different program that does not accept your ITT credits."
The DOE is reaching out to ITT students via email. The message will explain what ITT's closure means for them, and link to questions and answers that can be reviewed at studentaid.gov/ITT. Also, students can call a toll-free number -- 1-800-4-FED-AID -- for assistance.
Federal Student Aid will host webinars, too. The saved webinars will be posted on the studentaid.gov/ITT
Lastly, Federal Student Aid will partner with states at transfer fairs to help students navigate their options. The details of these fairs will be posted at studentaid.gov/ITT
Details as they develop will be available at the DOE's ITT announcements page
. The full press release is available here
In May 2015, Corinthian Colleges filed for Chapter 11 bankruptcy protection after accusation of predatory lending practices and inflated job placement numbers. About 16,000 students were left without a degree; others held large debts. Some students received debt relief.
A website called sellingoutstudents.org
has listed alleged complaints from ITT and other similar companies.
In addition to students being left without classes, ITT's 8,000 employees were laid off from their jobs.