For-Profit universities have been under investigation for years. Now, the Department of Education has barred ITT Tech students to use federal loans for school. The school’s reaction?
100 Campuses Shutting Down – ITT Technical Institute
On Tuesday, ITT Educational Services announced an immediate shutdown of its 135 ITT Tech campuses. This came on the heels of the US Department of Education barring the school from allowing new students to use federal loans to pay for ITT, causing the school to stop enrolling new students. As a result, 40,000 students across 38 states are left angry and confused – and taxpayers may be liable for their debts.
ITT accused federal officials of forcing the closure and denying its due process, but has come under fire in the past for shady recruiting practices, lending practices, and job placement figures.
A school must be accredited by a government-recognized accrediting agency to have access to federal student loans. The Department of Education noted that ITT Educational Services was out of compliance with its accreditor standards twice this year alone.
ITT Tech is not the first for-profit university to shut its doors. Corinthian Colleges shut down after the Department of Education fined the college $30 million for lying about job placement rates. Corinthian then filed for bankruptcy, and closed down, impacting 16,000 students. As a result of that action, the DOE created guidelines to help with debt relief for affected students.
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The Department of Education now has a streamlined debt relief plan for the ITT Tech shutdown, which falls on taxpayer shoulders. In fact, a new DOE plan to forgive loans for defrauded students at for-profit (and nonprofit) institutions could cost up to $43 billion, according to department estimates. Government officials estimate the fallout from ITT shutting down could be as much as $500 million. When Corinthian College shut down, the government forgave $171 million in student debt. Taxpayers are picking up the tab because the debt forgiveness is focused on government-backed loans. ITT dismissed 8,000 employees, and is now fielding a class action lawsuit, as well.
Watch this news from Fox News about the problem it gives to the student.
ITT Educational Services is done. There’s no coming back from this. And quite frankly, they deserve it.
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