The for-profit college chain ITT Technical Institute is shutting down all 130 of its U.S. campuses, saying Tuesday it can’t survive recent sanctions by the U.S. Department of Education.
In a letter to more than 35,000 students, the Indiana-based parent company ITT Educational Services announced that campuses won’t open for the fall term that was scheduled to begin Monday — leaving students scrambling for last-minute options since many U.S. colleges already have started fall classes.
ITT also cut more than 8,000 jobs immediately in what is believed to be one of the largest college closures in American history.
The chain was banned Aug. 25 from enrolling new students who used federal financial aid, because, Education Department officials said, the company had become a risk to students and taxpayers. The department also ordered ITT to pay $152 million within 30 days to help cover student refunds and other liabilities if the chain closed.
Days before those sanctions were announced, ITT’s accreditor reported the chain had failed to meet several basic standards and was unlikely to comply in the future. It had also been investigated by state and federal authorities who accused ITT of pushing students into risky loans and of misleading students about the quality of programs.
LOCAL CAMPUSES CLOSE
The company’s two Nevada locations, in Henderson and North Las Vegas, both closed abruptly Tuesday.
According to the National Center for Education Statistics, the Henderson campus had 345 students and the North Las Vegas campus had 449 students. The North Las Vegas campus had 43 full- and part-time faculty and the Henderson campus had 35 full- and part-time employees, according to the Center.
On Tuesday afternoon, the North Las Vegas location off West Cheyenne Avenue and Simmons Street had the lights shut off and blinds drawn up.
Several cars were seen driving slowly through the mostly vacant parking lot. A delivery worker was seen wheeling out water equipment.
Shalonda Hughes, real estate associate with CBRE Las Vegas, declined to talk about the company’s lease there but said the shopping center was 80 percent occupied, including the ITT Technical Institute space.
Jason Kilgore, 20, arrived at the North Las Vegas location with his father Bryant Kilgore, 48, Tuesday, in an attempt to get a copy of his transcripts.
Kilgore had studied software development there for a year and would have graduated in the spring. Kilgore said his family found out about the school’s closure Tuesday morning through social media and the news.
“Hopefully my credits can transfer to other schools that I look at,” said Kilgore.
After finding the building closed, Kilgore and his father headed off to the Art Institute of Las Vegas to see if the school would accept his ITT Technical Institute credits.
“Honestly, I just feel like I don’t know exactly what to do and where to go from here,” said Kilgore.
Keyonna Summers, a spokeswoman for UNLV, said that the university does not accept ITT Technical Institute credits because the school lacks regional accreditation.
”We transfer in and post credits from any regionally accredited institution. If it is not a regionally accredited institution, we would consider granting the student nontraditional education credit on a case-by-case basis,” said Richard Lake, a spokesman for the College of Southern Nevada, in a statement.
In a statement, Ellen Guerra, spokeswoman for Nevada State College, said, “All transfer students and their existing credits are evaluated on a case-by-case basis. We will do our best to work with ITT students to find them an education solution that allows them to obtain their degree.”
ITT Educational Services CEO Kevin Modany told reporters on a conference call Tuesday that ITT was the victim of a “regulatory assault” and never had the chance to defend itself.
“For what appears to be political reasons, there seemed to be an outcome in mind that was going to be forced here,” Modany said.
Other education companies had made overtures to buy the chain’s schools over the past year, Modany added, and ITT had offered to “wind down” its operations gradually if federal officials eased some of the sanctions against it, but he said federal officials rejected those options.
Department Undersecretary Ted Mitchell, however, said ITT never made a formal proposal, and that the department’s “informal conversations” with potential buyers had failed.
“We just didn’t see that there was a path forward providing a quality education to the students of ITT Tech,” Mitchell said.
One of the biggest for-profit chains in the nation, ITT had been closely monitored by federal officials since 2014, when the chain was late to submit an annual report of its finances to the government.
About 200 ITT employees will help students obtain grade transcripts and apply to other schools, and the chain said it is seeking agreements with other schools that would help students transfer class credits. Education Department leaders are also urging community colleges to contact ITT students and welcome qualified students.
Students who were enrolled at ITT within the last 120 days can apply to have their federal student loans erased by the Education Department. That’s an estimated $500 million worth of loans, a cost that would be covered by taxpayers and $90 million in insurance that ITT previously paid the department.
Under President Barack Obama, the Education Department has led a crackdown on for-profit colleges that have misled students or failed to deliver the results they promise. The now-defunct Corinthian College chain agreed to sell or close more than 90 U.S. colleges in 2014 amid a fraud investigation over advertising practices. The department is also deciding whether to cut ties with the Accrediting Council for Independent Colleges and Schools, the group that accredited ITT and Corinthian.
Review-Journal writer Alexander S. Corey contributed to this report.