ITT Technical Institutes closing after ban on federal financial aid

Students across the country are scrambling to find new schools this fall semester after ITT Technical Institute abruptly shuts down.

ITT Educational Services says it is ceasing operations of all its ITT Technical Institutes permanently, Washington locations included.

ITT has campuses in Seattle, Everett and Spokane.

The company says the closures are due to an investigation and sanctions by the U.S. Department of Education.

"It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service," the company stated Tuesday. "Effective today, the company has eliminated the positions of the overwhelming majority of our more than 8,000 employees."


Last week the Associated Press reported the U.S. Department of Education banned the for-profit college chain from enrolling new students who use federal financial aid.

The company was the subject of state and federal investigations focusing on its recruiting and accounting practices. 

Among the measures, ITT was been ordered to pay $152 million to the department within 30 days to cover student refunds and other liabilities in case the company closes. The chain, based in Indiana, is still paying another $44 million demanded by the department in June for the same reason.

The education department also has prohibited ITT from awarding its executives any pay raises or bonuses, and it must develop "teach-out" plans that would help current students finish their programs at other colleges if the chain shuts down.

Under the new measures, current students can continue receiving federal grants and loans.

Education Secretary John King said the government is taking action to protect students and taxpayers following "troubling" findings about the company. This month, a group that accredits ITT found that the chain failed to meet several basic standards and was unlikely to comply in the future.

"It simply would not be responsible or in the best interest of students to allow ITT to continue enrolling new students who rely on federal financial aid," King said during a telephone conference with reporters.

The news, however, leaves local students concerned about graduating, losing thousands of dollars and worried about their futures.

Brian Lindsay goes to the Everett campus and only had a few more classes to graduate. He says he spent about 60 hours a week dedicated to his schooling and has more than $27,000 in student loans.

He feels even more terrible because he convinced his brother to go to ITT last year.

"He's pretty upset, we don't know what to do right now," says Lindsay. "We're like, 'what do we do?'"

In a Google Hangout, Lindsay was visibly upset about the news. He says the school informed students about six months ago about an audit but school officials reassured students there was nothing to worry about.

"I was pretty upset because I spent a lot of time and energy to get where I thought I was going to be," says Lindsay. 

He has also started calling area community colleges to see if they will accept his hours.

"It's a lot to take in," he says, "because it happened so quick."

When asked if students who attended ITT would be able to transfer credits to Seattle Colleges, spokesman David Sandler shared:

Seattle Central, along with the other colleges in the Seattle Colleges District (North Seattle, South Seattle), can award "Prior Learning Credit" to ITT students and others. Our credential evaluator reviews students' transcripts and course catalog information from the institution in question to make a determination. This credit can also be awarded for work experience. If necessary, placement tests can be administered to gauge students' knowledge. We are here to work with students in any way possible to ensure they are given credit for the courses on which they have spent so much time and money completing. 
 
Also, Seattle Central has space available in its IT courses this fall, including a new Bachelor of Applied Science in IT Networking that is beginning for the first time. 

A spokesperson for Everett Community College also said they are willing to work with students:

During this challenging time, EvCC is happy to assist students who want to continue their education. ITT Tech students are undoubtedly in various stages of their education, from just starting out to one term away from graduation. Interested transfer students should submit official transcripts to EvCC and meet with a program adviser in their area of study to determine the best course of action. Classes for fall quarter begin on Sept.19. Winter quarter begins on Jan. 9. We are planning information sessions specifically for these students. Please check our website later this week for details.  For more information on the transfer process, students can call Enrollment Services at 425-388-9219 or visit us online at www.everettcc.edu.

The U.S. Department of Education is also posting updates on ITT Technical Institutes and how students can apply for closed school loan discharges.


 

KING 5's MIchelle Li, Ted Land and KHOU contributed to this report.

 


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