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ITT Closes All Campuses

Following the most recent federal sanction, for-profit college chain ITT Educational Services Inc. will close doors at all of its more than 130 locations.

Officials at ITT Educational Services Inc. said the for-profit college chain is stopping operations at all of its ITT Technical Institute locations. The Sept. 6 announcement comes barely a week after the U.S. Department of Education told the for-profit educator it could no longer enroll students who received federal financial aid.

“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. 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 Education Department’s latest restriction, announced Aug. 25, was one in a series of sanctions intended to rein in some of ITT’s dubious practices. According to CNN, the Securities and Exchange Commission, the Consumer Financial Protection Bureau and more than a dozen states were investigating ITT for a number of reasons including its financial stability and job placement rates. In tandem with the department’s enrollment restriction, it also told ITT it had to increase its cash reserves by $152 million in 30 days to cover liabilities in the event the schools closed.

“Our responsibility is first and foremost to protect students and taxpayers,” said Secretary of Education John B. King Jr. in an official statement released late last month. “Looking at all of the risk factors, it’s clear that we need increased financial protection and that 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 student aid funds.”

When asked whether his department’s actions were meant to force ITT’s closure, King deflected the question, The Indianapolis Star reported.

Nevertheless, increasing federal oversight for ITT became part of a larger narrative in which the government took the for-profit college industry to task for allegations of deceptive marketing practices and its focus on recruiting low income students. Fortune reported the crackdown led to the closure of Corinthian Colleges last year and the closure of all but a few of Education Management Corp.’s more than 25 Brown Mackie College locations.

ITT officials said in its statement that effective immediately, positions for a majority of its workforce would be eliminated. Those remaining would help displaced students with records issues and identifying future education options.

As of June 30, the school system, which enrolled roughly 40,000 students across more than 130 campuses, offered in-person and online courses in information technology, electronics technology, drafting and design, business and nursing and health services.

In the statement, ITT officials said thousands of employers relied on its schools for skilled workers in high-demand fields, and that ITT had always worked to ensure compliance with applicable laws and regulations and upheld its ethic of continuous improvement.

“We have always carefully managed expenses to align with our enrollments. We had no intention prior to the receipt of the most recent sanctions of closing down despite the challenging regulatory environment that now threatens all proprietary higher education,” the statement read. “When we have received inquiries from regulators, we have always been responsive and cooperative. Despite our ongoing service to this nation’s employers, local communities and underserved students, these federal actions will result in the closure of the ITT Technical Institutes without any opportunity to pursue our right to due process.”

Calling the government’s actions “inappropriate” and “unconstitutional,” ITT officials said after closing down its operations, “it will now likely rest on other parties to understand these reprehensible actions and to take action to attempt to prevent this from happening again.”

This story originally appeared in Workforce‘s sister publication, Chief Learning Officer. Bravetta Hassell is a Workforce associate editor. Comment below or email editor@CLOmedia.com.

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