ITT Technical Institutes announced this week that it is ceasing operations following a ruling by the U.S. Department barring it from accepting new students who receive federal financial aid.
The company is reported to have 14 campuses in California, seven of them in the Greater L.A. area.
Following a lengthy investigation, the Department of Education said it determined ITT Tech’s parent company, Indiana-based ITT Educational Services Inc., was not in compliance with criteria set by the Accrediting Council for Independent Colleges and Schools.
In addition to the financial aid sanction, the federal agency planned to ramp up its oversight of the for-profit college’s finances due to “significant concerns” about its administrative capacity, organizational integrity, financial viability and its ability to serve students.
“Our responsibility is first and foremost to protect students and taxpayers,” said Secretary of Education John B. King Jr. “Looking at all of the risk factors, it’s clear that we need increased financial protection and that it simply would not be responsible or in the best interest of students to allow ITT to continue enrolling new students who rely on federal student aid funds.”
ITT Educational Services Inc. officials said the Department of Education’s sanctions forced them to cease operations and cancel its trade school classes for the September quarter. The company also said more than 8,000 employees will lose their jobs. However, employees who assist students with obtaining their records and assessing their educational options will stay on.
“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,” according to a company statement. “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.”
Officials with ITT Educational Services Inc. said the government actions affecting its estimated 140 ITT Technical Institutes in 35 states is “inappropriate and unconstitutional.” The ruling came down without a hearing, and the company was not allowed to appeal it.
ITT Tech students already enrolled in classes can continue to apply for federal financial aid to finish their coursework elsewhere and may be eligible for a federal loan discharge, according to the Department of Education.