ITT Tech Is Officially Closing
ITT Technical Institute is officially closing all of its campuses following federal sanctions imposed against the company. The for-profit college announced the changes in a statement:
“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. 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.”
The announcement comes just one week after ITT Tech stopped enrolling students following a federal crackdown. ITT Tech and other for-profit colleges have been widely criticized for accepting billions of dollars in government grants and loans while failing to provide adequate job training for its students. Last year, ITT Tech received an estimated $580 million in federal money (aka taxpayer dollars), according to the Department of Education.
One week after ITT Tech was prohibited from accepting federal aid, the whole company shut down. The swift closure of all of its campuses should indicate exactly how far the company went to recruit students using federal aid. Of course, there’s nothing wrong with providing federal loans to students who are seeking higher education, but ITT Tech often went a step further: The company’s recruiters preyed on students who didn’t understand the lifelong burden of debt and shouldn’t have been seeking a technical degree.
A report from The Atlantic recently revealed that “students pursuing bachelor’s and associate’s degrees at for-profit colleges saw their earnings drop, compared to before they started the program.” The reason is because students at for-profit colleges are less likely to finish their degrees, have a higher risk of living in poverty, and students often become burdened by debt without learning any new technical skills.
The sanctions imposed against ITT Technical Institute last week were described by many experts as a “death sentence.” The sanctions prevented ITT Tech from receiving any federal aid for tuition and also required ITT Tech to increase its cash reserves from $94.4 million to $247.3 million. The cash reserves were created to help support students in case the company closed. Now that ITT Tech is officially closed, the company is not saying how it will use its reserves. In an email to Gizmodo, a company spokesperson said, “Please see today’s press release. This will be our only comment.”
ITT Tech’s decision to close down its campuses comes after Labor Day weekend, during which many of the faculty members and students at the company’s campuses felt completely out of the loop. “Labor Day gives us a time to pause and spend time with our family,” said ITT Tech CEO Kevin Modany an internal email sent on Friday. “As we close out the end of our June quarter, we’d like to extend that time by giving all employees Tuesday, September 6th off as an extra comp holiday.”
In the same email, Modany also indicated that the company’s demise could happen at any moment. “As you may know, we have contacted the U.S. Department of Education (ED) to request their consideration of possible alternatives to ED’s additional requirements,” he said. “However, we cannot provide any assurance that the ED will respond to our requests in a favorable manner. There is a possibility that we could hear something at any time. As such, we ask that you check your email regularly for updates. If you do not have access to email, please check with your Supervisor.”
ITT Technical Institute employees and students have been confused by the company’s opaque emails and lack of communication. During the holiday weekend, my inbox was filled with messages from faculty and students pleading for more information. “No one knows what’s going on,” said one faculty member. “There is no communication to the staff,” said another.
Students also wrote to Gizmodo, saying they were scared about their future. For example, we received this message on Friday, after our story was published. Here’s what the individual said:
I am a current student at ITT. Went to campus today to study and was kicked out. The dean stated they were closing campus early for the holiday. I sat in the parking lot and watched staff go in and clear out personal affects. Boxes, shopping bags full of things. One instructor brought lunch to campus and several people just left upset. Word is some people were let go to save money towards the 100 million the school has to put in escrow to stay open, other rumor is its prep for the shutdown. Not sure what’s happening and have tried calling the CEO of corporate to get answers because I am one of several students that are supposed to graduate 9/29. Scared to death we won’t get to before graduation.
If you’re a student who currently or formerly attended ITT Tech, not all hope is lost. The Department of Education has provided resources to current and former students in a blog post that may answer some of the immediate questions you have. The DOE is also directing students to this Federal Student Aid announcement page, where its providing information to current and former students who have Title IV-related questions.
Wow thats shocking news i wonder if any of the student got their money back ?