The ITT Technical Institute campuses in Overland Park and Kansas City have closed permanently along with all other ITT schools, putting an end to one of the nation’s largest for-profit educational companies.
The closure represents another casualty of the for-profit college industry, which nationally has been accused of widespread fraud, deception and abuse.
ITT Educational Services Inc., the Indiana-based parent company, said a recent federal ruling triggered its closings, and it complained that the action came without an ability to appeal or request a hearing. The company had stopped accepting students earlier.
The company said Tuesday it had no choice but to cease operations after 50 years in business. It said it had “exhausted the exploration of alternatives, including transfer of the schools to a nonprofit or public institution.”
In August, the U.S. Department of Education banned ITT Educational Services from enrolling any students that relied on federal financial aid. It said the action reflected concerns about the company’s “administrative capacity, organizational integrity, financial viability and ability to serve students.”
Ted Mitchell, undersecretary for the Department of Education, dismissed assertions that ITT was the target of a political agenda. In an interview with The New York Times, Mitchell said Tuesday the issues surrounding ITT’s educational quality and financial stability were long-standing and fundamental.
“Over time, the risk was just too high,” for both students and taxpayers, Mitchell said.
A notice from ITT on Tuesday said the closings would be permanent and idle most of its approximately 8,000 employees. A few remaining staff will focus on helping “the tens of thousands of unexpectedly displaced students with their records” and other educational choices, the statement said.
Kansas Board of Regents officials said on Tuesday they are in the process of claiming from ITT the records for about 400 Kansas students who attended ITT campuses or were enrolled online.
In Missouri, about 700 students are expected to hear soon from the state Department of Higher Education about where and how to access student records.
Students enrolled in ITT technical schools might qualify to have those federal student loans forgiven, U.S. Secretary of Education John B. King Jr. said in a statement. He also said transferring to a different school, perhaps to complete graduation requirements, could limit the ability to dismiss federal loans.
King said in his statement that “in recent years, ITT has increasingly been the subject of numerous state and federal investigations.” In August, the department’s accrediting agency, the Accrediting Council for Independent Colleges and Schools, determined that ITT was not in compliance with accreditation criteria.
The company’s website said ITT offered dozens of programs in six schools of study, including business, information technology, criminal justice and electronics technology.
Its career-based programs had attracted 40,000 students at 137 campuses in 39 states as of midyear, the company said in recent federal securities filings.
For-profit colleges across the country have faced mounting state and federal scrutiny and have come under fire in recent years from consumer advocates who labeled them predatory institutions. Some companies have been accused of deceptive practices for targeting low-income students and students who were academically unprepared to succeed in college.
California-based Corinthian Colleges, another of the large for-profit educational companies, closed under a Chapter 11 bankruptcy last year after a lawsuit claimed it falsely advertised future jobs, duping students into getting federal loans to pay for school.
In June the U.S. Department of Education said it would forgive more than $100 million in student debt burdening former Corinthian students.
In April Overland Park-based Wright Career College, a nonprofit accused of operating similarly to for-profit schools, declared bankruptcy and abruptly closed its doors. The school had campuses, here and in Wichita, Oklahoma City, Tulsa and Omaha
Wright is the subject of a lawsuit joined by hundreds of students and graduates accusing the school of “a systematic, deceptive marketing scheme” to lure students into enrolling and applying for student loans they can’t repay.