Higher-Ed Hustle: A Miami Herald investigation
The for-profit college chain ITT Technical Institute is shutting down all 130 of its U.S. campuses, including locations in Hialeah, Davie and Fort Lauderdale, saying Tuesday it can’t survive recent sanctions by the U.S. Department of Education.
In a letter to more than 35,000 students, the Indiana-based parent company ITT Educational Services announced that campuses won’t open for the fall term that was scheduled to begin next Monday — leaving students scrambling for last-minute options since many U.S. colleges already have started fall classes. ITT also cut more than 8,000 jobs immediately.
The chain was banned Aug. 25 from enrolling new students who used federal financial aid, because, Education Department officials said, the company had become a risk to students and taxpayers. The department also ordered ITT to pay $152 million within 30 days to help cover student refunds and other liabilities if the chain closed.
Days before those sanctions were announced, ITT’s accreditor reported the chain had failed to meet several basic standards and was unlikely to comply in the future. It had also been investigated by state and federal authorities who accused ITT of pushing students into risky loans and of misleading students about the quality of programs.
ITT Educational Services CEO Kevin Modany told reporters on a conference call Tuesday that ITT was the victim of a “regulatory assault” and never had the chance to defend itself.
Ted Mitchell, Department of Education undersecretary, said: “We just didn’t see that there was a path forward providing a quality education to the students of ITT Tech.”
A Miami Herald investigative series, Higher-Ed Hustle, detailed how some private, for-profit colleges, charging tuition much higher than public colleges, left students mired in debt and bereft of meaningful career prospects. The series found that a favorable regulatory climate — Florida’s oversight board, the Commission for Independent Education, received more than 2,200 complaints over its 14-year history but could cite no instance where a school was punished — helped for-profit colleges grab 18 percent of the market, significantly higher than other states.
We just didn’t see that there was a path forward providing a quality education to the students of ITT Tech.
Ted Mitchell, U.S. Department of Education undersecretary
The series focused in part on Dade Medical College and Florida Southernmost University, locally based schools that shut down in the wake of the series after the federal government slowed the flow of federal aid to the schools, headed by a high-school dropout named Ernesto Perez.
One of the biggest for-profit chains in the nation, ITT had been closely monitored by federal officials since 2014, when the chain was late to submit an annual report of its finances to the government.
About 200 ITT employees will help students obtain grade transcripts and apply to other schools, and the chain said it is seeking agreements with other schools that would help students transfer class credits. Education Department leaders are also urging community colleges to contact ITT students and welcome qualified students.
U.S. Sen. Bill Nelson, D-Fla., sent a letter to the Department of Education urging it to “work closely with the students enrolled at ITT Tech and keep them fully informed of the company's intentions to reimburse them and provide them access to their transcripts and records so that they can continue their education elsewhere.”
He also urged the department to inform students they have the option to refuse a planned “teach-out” — in which students are offered the opportunity to finish their ITT education at a designated alternate school — and instead seek forgiveness of their outstanding federal student loans through the Closed School Discharge program.