After 50 years in operation, for-profit college chain ITT Tech has shut down all of its campuses, the Los Angeles Times reports. The move comes after the accrediting agency for ITT threatened to withdraw its accreditation, leading the U.S. Education Department to ban ITT from enrolling students who use federal aid in August, the Indianapolis Star reports. Federal money for student aid was how ITT made a profit.
This comes as a devastating blow to approximately 8,000 employees and 35,000 students, who were told previously, when rumors of potential shutdowns and other problems with the institute first arose, that anyone already enrolled would be able to finish their degree.
Thankfully, students affected by the shutdown should be eligible for federal loans used for their time at ITT to be forgiven if they wish to start over at another school, and community colleges located near ITT campuses are being encouraged to allow ITT credits to transfer in. However, if students are able to transfer their credits, they can’t have their loans forgiven, Ted Mitchell, the undersecretary of education, told the LA Times.
According to NPR, the crackdown from the Education Department stems from concerns that span several years. About a dozen state attorney generals have been looking into allegations of the institute misleading students about their future job prospects and accepting students that were unqualified for their programs. The Indiana Star adds that ITT is also facing charges of fraud, and put itself in this difficult position due to years of bad choices and bad management.
A similar situation caused Corinthian Colleges to close last year, and could happen to even more for-profit colleges in the future.