As students around the country start fall semester this week, ITT Technical Institutes is shutting down. It will stop classes at its 130 campuses nationwide, and let go most if its 8,000-member staff, the Wall Street Journal reported. The closure is among the largest in history and it will affect around 40,000 students.
"The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes, and we will not be offering our September quarter. We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution," ITT Educational Services, the Technical Institutes' parent company, said in a statement. "The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable."
ITT had been in talks about transferring ownership, the Journal reported, though there was some dispute between the Education Department and the company over how far those talks got or how realistic they were. The fate of ITT's brick-and-mortar school, Daniel Webster College, is still unclear, the Journal reported.
Enrollment in ITT and the for-profit college sector as a whole has dropped sharply as the government has made moves to more closely regulate the schools. For ITT, it seemed to be only a matter of time after the Department of Education issued new sanctions last month. The government said ITT couldn't recruit students with federal financial aid, the source of 80 percent of the company's revenue. The Education Department also told ITT to drastically increase its cash reserves, and the combination seemed to make continuing operations untenable.
"Basically they have to come up with about $153 million in 30 days," Ben Miller with the Center for American Progress said at the time. "And normally, if I was a for-profit college, I would find this money by enrolling and recruiting new students."
Listen to our full story about the sanctions below.
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