ITT Forced to Close After Federal Department of Education Action


ITT Technical Institute, a for-profit college that recently opened a location in Arlington Heights, is being forced to shut down all locations permanently because of new strict rules imposed by the federal Department of Education, and will close all of its campuses nationwide — including Illinois locations in Arlington Heights, Oak Brook, Orland Park and Springfield.

In August, the stricter rules involve the federal Department of Education banning the school from enrolling new students who receive federal aid. The Department of Education’s accrediting agency cited chronic mismanagement of finances and questionable recruiting tactics. In 2014, the Consumer Financial Protection Bureau filed a lawsuit against ITT, accusing ITT of predatory student lending.

Positions held by the majority of the college’s 8,000 employees were immediately eliminated, but some records and administration staff will remain on hand to help the tens of thousands of ITT students obtain their records and counsel them about their educational options.

The school has operated for 50 years and serves 43,000 students at 130 campuses in 38 states. The Arlington Heights location at 3800 North Wilke Road opened in Spring 2013. The school was previously located in Mount Prospect.

In the spring of 2016, ITT was the fifth-largest for-profit college chain, and was among several for-profit schools under scrutiny by the Obama administration. The Obama administration characterized the for-profit industry as a business that uses deceptive marketing tactics to enroll students who are burdened with thousands of dollars of debt for low-quality educations. ITT’s recent high stock shares was $75.52 per share on February 13, 2012, but had declined the past two years. Today the stock was at .36 (ESI)

The “actions of sanctions by the U.S. Department of Education have forced us to cease operations” immediately, leaving 43,000 of students about to begin the September quarter scrambling for options, ITT Educational Services Inc., the company that operates the college, said in a news release.

The Department of Education showed “complete disregard … for due process to the company,” negatively affecting students, alumni and employees, the company said.

ITT said the decision was reached “only after having exhausted the exploration of alternatives, including transfer of students to a non-profit or public institution.”

ITT Educational Services Inc. said it believes the government’s action was “inappropriate and unconstitutional” and that “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.”

If all students of ITT successfully apply for a student loan discharge, which would wipe out their federal student debt, the loss to the federal government would be hundreds of millions of dollars.

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