The Educational World is Shocked as ITT Tech Closes
The curtain has closed on ITT Tech. In a shocking development, federal sanctions have led to the for-profit educational institution to close all 130 campuses. Students of ITT Tech are now in a difficult position since their school no longer exists. The actual number of those students is staggering: 45,000.
ITT Educational Services was founded in 1969 and owned and operated technical learning institutes across the United States. Students enrolled in the various programs at the school could earn a associate, bachelor’s, and master’s degrees. Battles with the Department of Education led to the school filing for bankruptcy in September of 2016 and shutting down.
Troubles with the Department of Education
The bankruptcy followed the Department of Education’s decision to cut off all financial aid to the school. Student loans and various grants could not be accessed by students to pay for their tuition. In essence, this move made it impossible for the school to accept many new students. The costs of tuition are too high for the budgets of most attendees.
Students and Transfer Credits
A number of students can take solace in the news certain colleges are willing to transfer in credits from ITT Tech. This could lead to a smoother transition to a new learning environment. Still, students are not likely to be pleased with the turn of events that created their current situation. Nothing really can be done. ITT Tech’s doors are closed and closed for good.
The Department of Education has stated that there were numerous concerns about the financial stability of ITT Tech. Actually, there were several things that raised concerns at the agency.
The Department of Education felt the institution was lacking in many areas and required to department to post a massive letter-of-credit. The amount the institution was required to post was in excess of $240 million. The letter-of-credit is put in place as a protection against any defaults that may occur on loans or other government-issued funds to an educational enterprise.
The combination of putting up a massive amount of money in the form of the letter-of-credit and the barring of federal financial aid pushed ITT Tech over the proverbial brink. The entity could not remain in existence with such an incredible financial strain. The closing of ITT was only a matter of time with such fiscal strains in place.
Taxpayers will have to accept their own personal losses on the closing of ITT Tech. Upwards of $500 million in student loan debt may be discharged since the school has closed.
ITT Tech had been embroiled in a few controversies over the years. Lawsuits had been filed against ITT Tech based on how it went about enrolling students and also in regards to predatory lending. One complaint focused on the institutions “over-promising” of career success potential with an IT Degree. One lawsuit dealt with claims the school took students solely to collect federal funds even though the aptitude of the student was in question.
Time will tell what the ramifications the ITT Tech closing is going to have on the higher education world as a whole.