ITT Technical Institute announced Tuesday that it is closing its campuses across the country after the Department of Education barred the for-profit school late last month from enrolling new students that rely on federal financial aid.
"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,” the school said in a 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.”
Positions were immediately eliminated Tuesday.
Late last month, the Education Department said ITT Tech was not in compliance and was unlikely to become in compliance with Accrediting Council for Independent Colleges and Schools (ACICS) accreditation criteria.
In addition to prohibiting the school from accepting new students that rely on federal funding, the agency ordered the school to set aside more money for liabilities in case it closed. The school was told to increase its existing surety of all Title IV aid it received in 2015 by 40 percent, from $94.4 million to $247.3 million.
Surety funds are held in a Federal Holding Account and are used to reimburse the department for liabilities related to its investigations, including student refunds, student-loan cancellations and other expenses if ITT closes campuses.
ITT Tech claims it was not provided a hearing or an opportunity to appeal what it called “unwarranted actions.”
“The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable,” the school said. “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."
ITT Tech is under investigation by at least 18 state attorneys general and is being sued by the Consumer Financial Protection Bureau for allegedly pushing students into high-cost private student loans.
In a statement, Sen. Richard Blumenthal (D-Conn.) said ITT Tech students should be given debt relief.
“ITT Tech has cheated students, taxpayers, and veterans for far too long,” he said. “Now that this bad actor has collapsed under the weight of its own wrongdoing, we must do everything we can to ensure that its former students aren’t left holding the bag.”
ITT Tech operates more than 130 campuses in 38 states and enrolls students in online programs nationwide. The Education Department said the institution reported almost $850 million in total revenue last year, roughly $580 million of which was sourced from federal aid dollars. In 2015, approximately 45,000 students were enrolled in ITT programs.