With the beginning of a new fall semester, ITT Technical Institutes across 38 states will not be accepting any more students, cancelling all classes and shutting down permanently. In a press release published on Aug. 6, the Indiana-based parent company, ITT Educational Services, announced that they will be closing more than 130 locations, including the two in Massachusetts in Norwood and Wilmington.
This sudden announcement comes a mere two weeks after the U.S. Department of Education decided to impose financial sanctions against the schools, and banned them from enrolling students who rely on federal financial aid. The reasoning behind this decision was, according to the Education Department, that the operations run by ITT Educational Services had become a financial risk for not only the students, but taxpayers outside of the school.
Furthermore, the school was accused of failing to meet basic academic standards. On Aug. 25, the U.S. Department of Education ordered the for-profit school to pay $152 million within the next 30 days in order to refund the students for at least part of the investments they had made in their education.
In the official statement, the 50-year-old company described this decision as a “lawless execution,” claiming that alternative solutions were rejected. “We believe the government’s action was inappropriate and unconstitutional,” the press release states.
The sudden closing does not only negatively affect over 40,000 students. It will also bring massive layoffs. In total, around 8,000 employees are now left without jobs. According to their website, ITT Technical Institutes have “agreements with several partner schools” in an effort to transfer their students to other institutions to finish their degrees there.
According to the Department of Education, students who do not want to continue their studies at a different institution will have their outstanding student loans forgiven.
For the 500 students affected by the closings of the campuses in Massachusetts, officials will also try to provide help. Earlier this year, Massachusetts Attorney General Maura Healey filed a lawsuit against the for-profit school, accusing it of misleading students about the quality of classes and the graduate employment rate presented.
Furthermore, Healey stated that ITT Technical Institutes had been applying pressure on potential students to have them apply for a program and classes. In a press release from April, Healy described how ITT students were advised to take out private loans, which are much more expensive than federal loans, leaving students even more in debt. In the statement, she also emphasized that the Attorney General’s Office had already taken steps and filed suits against other “predatory” for-profit schools in Massachusetts in the past. The schools in question include Kaplan Career Institute, Lincoln Tech, Sullivan & Cogliano and Salter College. The General’s Office will continue to take these steps in the future to prevent colleges from taking advantage of their students.
In the upcoming months, we will see if ITT students will be able to transfer to other colleges, keep their earned credits, and get reimbursed.