ITT Technical Institute shut down on Tuesday, closing its 130 campuses nationwide.
The closure affected about 40,000 students in 38 states. It follows other failures in the for-profit college industry as the federal government has cut off the flow of student aid funds.
U.S. Secretary of Education John B. King Jr. said current or recently enrolled ITT students may be eligible to have their federal student loans discharged and restart their education somewhere new. The amount of student loans that could be discharged totals about $500 million.
Read King’s statement here.
Whitney Barkley, an attorney with the Center for Responsible Lending said, “Although ITT Tech blamed its closures on August 25 Department of Education supervisory actions, the institution was facing multiple state investigations as well as other serious signs of approaching failure.
“The first danger signal came when the Accrediting Council for Independent Colleges and Schools found that ITT Tech was “not in compliance, and is unlikely to become in compliance” with accreditation standards,” Barkley said.
“ITT Tech had a spigot problem and was overly-dependent upon taxpayer dollars. The Education Department decided to turn off the spigot of funding,” Barkley said. “Now, they should take an additional step – protecting all ITT Tech students and holding them harmless for federal loans incurred during their studies. No one should become a victim of education fraud.”
National Consumer Law Center attorney Abby Shafroth said, “In light of ITT’s closure announcement, we reiterate our call that the Department act to protect currently enrolled and former ITT students, including by discharging the federal student loans of students who were unable to complete their program at ITT due to the closure–without requiring individual applications for discharge–and by fully investigating ITT’s recruitment and enrollment practices to help ensure that former ITT students harmed by misconduct get relief from their federal loans through the borrower defense process or other remedies available.”