ITT Tech Fallout Felt in Texas

AP Photo

When the feds shut down all 130 ITT Technical Institutes nationwide Tuesday, they impacted students across 38 states, including in Texas where 10 campuses operated.

The Indiana-based chain was the nation’s fifth-largest “for profit” college. Last year, they enrolled 45,000 students across the country. Nearly 7,000 were U.S. military veterans, according to Military Times. In Texas, the three Houston campuses accounted for 1,638 students, according to the Houston Chronicle. Dallas locations in Arlington, Richardson, and DeSoto netted roughly 1,475 students. showed one of the two San Antonio venues enrolled 539 students, while Austin served 506, and Waco, 225.

Upset students stood outside the locked and empty ITT Tech building at the Richardson campus Tuesday. One student, only 12 weeks away from receiving her nursing degree, told WFAA she paid $50,000 to come to the college and now has “nowhere to go.” Others expressed shock over the closures. Some said they were aware of the college’s accreditation and standards issues, but had been reassured these matters were being worked out. They thought they would be able to complete their studies and graduate.

A student at one of the Houston campuses showed up to locked doors and news crews. He spoke to KHOU, sharing he was unsure of what he will do next. Another student, Philip Dean, 24, at the Gessner campus told the Houston Chronicle: “I would have expected in an emergency like this someone would be here.” Dean moved his family from Huntsville last March to attend ITT. This fall, he would have started his third quarter studying electrical engineering towards a degree he said would have “opened up so many doors.”

In San Antonio, ITT student Shawn Miller told KSAT he was a few months away from graduating with a cybersecurity degree.

ITT Educational Services blamed the closure on sanctions placed on them by the U.S. Department of Education (USED) in late August, including barring the technical college chain from enrolling new students paying for school with federal student loans, which forced them to “cease operations.”

College officials touted the technical college’s contribution in helping “hundreds of thousands of non-traditional and underserved students” for more than half a century, while breaking the shutdown news in a press release:

 “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 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 release cited the Wall Street Journal, describing the actions taken against them as “lawless execution” by the Obama administration’s war on for-profit colleges.

The feds accused ITT of improper recruiting and accounting practices and the chain is embroiled a litany of allegations in a multi-state probe. However, they have not been convicted of any wrongdoing, to date. ITT described the government as enforcing “unwarranted actions taken without proving a single allegation” in the release, also stating: “We believe the government’s action was inappropriate and unconstitutional.

On August 25, USED ordered ITT to pay back $152 million within 30 days to cover student refunds and other liabilities in case the company closed. They were already repaying $44 million the government previously demanded for similar obligations. USED prohibited ITT from awarding their executives raises or bonuses, made them inform existing students that its accreditor was not in compliance, and create “teach-out” agreements to provide students other college options to complete their studies if the schools closed.

In 2015, ITT reported $850 million in revenue. USED cited an issue, saying around $580 million came from federal financial aid funds. They alleged ITT failed to adequately train students for the workplace.

In the release, ITT maintained they “carefully managed to align with our enrollments…,” “worked tirelessly to ensure compliance with all applicable laws and regulations” and remained “responsive and cooperative” when they received regulator inquiries.

Tuesday, Education Department Undersecretary Ted Mitchell offered students enrolled at an ITT campus in the last 120 days one of two options — apply for a closed school loan discharge and erase their financial aid debt, or transfer the credits to another college. Mitchell encouraged community colleges to take these transfer students. The second option did not necessarily forgive any loan debt.

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