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ITT Tech Shuts Enrollment After For-Profit College Disqualified from Federal Aid

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A troubled for-profit college has stopped accepting new applicants, after the Department of Education ruled last week that its students would be ineligible for federally-funded aid.

ITT Tech notes simply on its website that it is “not enrolling new students.”

Those currently taking courses at ITT can transfer or finish their education, Under Secretary of Education Ted Mitchell said Thursday, in a blog post.

If enrollees fail to do that before the school shuts down, Mitchell noted, students “will likely be eligible to discharge” their federal loan obligations.

The Debt Collective–a grassroots group that has organized protests against department rules on discharges from for-profit college debt–told ITT students to withdraw immediately.

“Do not take a ‘teachout,'” it said in a statement, posted over the weekend. “Do not agree to transfer your credits to another sham school.”

“Transferring credits could mean you will not get the discharge that you could get if ITT closes before you completed your program,” it added.

The enforcement action, as Mitchell noted, was brought against the company “based on the operational and financial risk they pose to students and taxpayers, not on a finding that they defrauded students.”

“There are, however, a number of open federal and state investigations into ITT campuses,” he said.

Both the Securities and Exchange Commission and the Consumer Federal Protection Bureau are currently probing ITT for deceptive practices. There are also “more than a dozen state attorneys general” investigations into the company, as The Washington Post remarked.

Last October, the Department of Education limited ITT Tech students’ eligibility for federal assistance, after it lost track of millions of dollars in aid throughout the previous half-decade.

The Post described the CFPB investigation into ITT as akin to the agency’s probe of Corinthian Colleges. In 2015, the company went bankrupt amid numerous government inquiries and lawsuits.

Sen. Elizabeth Warren (D-Mass.), a critic of the for-profit college industry, cheered the Department’s ruling against ITT.

The company’s “free ride is finally over,” she said Thursday, on Twitter, and “the message is clear: We won’t stand by & allow these shady schools to cheat students & taxpayers.”

For-profit colleges are heavily subsidized by the US government. Regulations cap the share of taxpayer-financed revenue that for-profit schools are allowed to receive at a whopping 90 percent of overall income, and still the rule has been systemically violated in the recent past. In 2014, the Department of Education reported that 27 different schools were breaking the 90 percent threshold.

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Since 2010, Sam Knight's work has appeared in Truthout, Washington Monthly, Salon, Mondoweiss, Alternet, In These Times, The Reykjavik Grapevine and The Nation. In 2012, he worked as a producer for The Alyona Show on RT. He has written extensively about political movements that emerged in Iceland after the 2008 financial collapse, and is currently working on a book about the subject.

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