ITT Educational Services to Close Most of its Colleges!

Dear Commons Community,

The saga of ITT Educational Services, the for-profit college company, may be coming to an end.  Yesterday, ITT announced that it was closing most of  its campuses.  As reported by the New York Times:

“The company cited the Education Department’s recent decision to bar its chain of colleges from using federal financial aid to enroll new students as the reason for the sudden shutdown. Except for a small school that operates under a different name, the move puts an end to an operation that has been accused of widespread fraud and abuse, leaving roughly 35,000 students and 8,000 employees in the lurch.

ITT Educational Services, whose recruitment, lending practices and educational quality have been under scrutiny by federal regulators and state prosecutors for years, said in a news release that it had “exhausted the exploration of alternatives, including transfer of the schools to a nonprofit or public institution.”

It denounced the Education Department’s decision to restrict the use of federal funds, calling it “inappropriate and unconstitutional” and “taken without proving a single allegation.” Nicole Elam, an ITT spokeswoman, declined to make any further comment.

Ted Mitchell, the under secretary for the Education Department, denied assertions that ITT was being targeted for political reasons, saying that the issues surrounding its educational programs and financial stability gave the federal government little choice.

“The risk presented by ITT to both students and taxpayers made it irresponsible for us to allow them to enroll new students and not have additional oversight,” Mr. Mitchell said. He also noted ITT’s independent accreditor had concluded that the schools were unlikely to be able to comply with the accreditor’s standards.”

ITT is a troubled company. The actions of the US Department of Education against ITT were warranted.




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