ITT Tech Closes All Campuses — For-Profit College Fails After ‘Predatory Lending’ Lawsuits
It’s been a rough few years for ITT Tech. In 2014, the Consumer Financial Protection Bureau — with the backing of the United States Congress — sued the for-profit institution for predatory lending practices, exaggerated job-placement statistics, and loan fraud. ITT Technical Institute was also sued by a dozen state attorneys general for the same reasons. Beginning in the fall of 2015, the Department of Education subjected the school to “heightened cash monitoring,” as the school still received millions of dollars every year in federal loans and grants, funded by U.S. tax payers.
Scrutiny continued in the form of allegations and investigations, launched by multiple organizations, from the Securities and Exchange Commission, to the California Department of Veterans Affairs. Last month, as reported by Fortune, the U.S. Department of Education banned the school from enrolling any students who receive federal aid. That was essentially the deathblow for the so-called college that enrolled desperate students at outrageous rates. After exhausting the limits of federal loans and grants, the students were often wracking up additional debt directly with the school or with private lenders who charged even higher interest rates.
With their primary source of income cut off, the school announced today that it was shutting down for good. More than one hundred ITT Tech campuses across the United States officially closed their doors after ITT Educational Services, Inc. issued its public statement. Along with what was previously a growing online educational presence, the school had more than 40,000 students enrolled nationwide. As many of those students are about to learn, the credits they earned at ITT Tech often won’t transfer to a public university or accredited private school. If students can’t find a school willing to accepts credits earned at ITT Tech, then the money spent on the classes at the now-defunct school will essentially have been wasted.
Last week, as noted by U.S. News and World Report, the school officially announced that it was no longer accepting new students. As with any for-profit institution, a healthy financial future is dependent on new business. Without enrolling any new students, it was clear that ITT Tech was on its deathbed. For any of the students — or the more than 8,000 employees — who didn’t see the writing on the wall, the public statement issued today makes everything very clear.
It’s worth noting that the school is admitting no wrongdoing and continues to blame the federal government for their failed business venture.
“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 official statement from ITT Tech went on to say that:
“The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes.”
RELATED REPORTS BY THE INQUISITR
- For-Profit ITT Tech College Chain Targeted By Feds, School Banned From Federal Financial Aid
- Student Loans Fraud: SEC Charges ITT Tech, Two Executives, With Student Loan Fraud
- Jill Stein To Cancel All Your Student Loans, One Thing Happens First
Refusing to take any portion of the blame, the rest of the statement includes such phrases as, “This action of our federal regulator,” “this federal action,” “these unwarranted actions,” and even “the government’s action was unconstitutional.”
The closest that ITT Tech came to accepting any blame for the situation they found themselves in was admitting that they could not live up to the federal government’s requirement of ensuring that at least 40 percent of its graduating students were able to repay the student loans acquired at ITT Tech without defaulting on the loans. In other words, more than 60 percent of ITT Tech’s previous students were unable to repay the loans they received from the federal government — at the expense of the U.S. taxpayers — once they left ITT Tech.
One question remains: will these students be forgiven for the debt they incurred while attending ITT Technical Institute? The fact that the federal government loaned the students money to attend ITT Tech was their way of endorsing the school. Now that the federal government has admitted that students shouldn’t be allowed to borrow money from the federal government to attend ITT Tech, can they expect students to repay loans that the federal government gave them to attend an institution wrought with fraud and a history of deceptive marketing practices?
[Photo by Rob Stothard/Getty Images]