Students Getting Lives on Track Derailed by ITT Tech Closures

Photo courtesy of <a href="">Wikimedia Commons and Dwight Burdette</a> (<a href="">CC BY 3.0</a>)
Photo courtesy of Wikimedia Commons and Dwight Burdette (CC BY 3.0)


By Natalia Holliday, Staff Writer

Approaching 40, broken, and beat, our fictitious hero Tom realizes that his time as a landscape laborer must end soon. It is early 2014, his kids are getting older, he feels the looming onset of various medical issues, and his wife alone cannot financially support the family should his body aches win out.

At home, Tom acts as tech support for friends and family who are less than savvy. Knowing he must make a change, he considers his talent and researches programs that will allow him to develop it into an employable skill. Soon enough, he finds the website for ITT Technical Institute, a for-profit technical institute boasting tech-based degree programs.[1]

Weighing the worth of taking out federal loans for tuition and any necessary private loans, he pictures his potential future. With a steady, respectable salary, he and his wife could put money away for the kids and their retirement. Bills could be less of a strain on the family. They could, for once, enjoy the comfort of financial security.

He submits his application, applies for FAFSA, and gets admitted for the Spring 2015 quarter. By December 2016, he would earn his degree and take it to the bounty of employers newly open to him.

Tom’s story is quite typical of many students at ITT Tech. Scores of the roughly 40,000 students across the country[2] were described as “older and balancing family obligations with underemployment.”[3] And, like Tom, they did not have time on their side.

So when the Institute sent a correspondence to students on Sept. 6, 2016, informing them that all campuses were officially closed, and the new quarter — to begin only six days later — was cancelled,[4] those like Tom had reason to panic.

According to the letter sent by ITT Tech, the Institute was forced close after Aug. 25, 2016, when the United States Department of Education imposed “a series of new requirements and conditions . . . on [ITT Tech’s] continued participation in the federal student financial aid programs” administered by the Department of Education.[5] Although the school proposed alternatives to the new standards, they were rejected, and an analysis of the impact of the standards led ITT Tech to determine that continued operations were not feasible.[6]

[pullquote]ITT’s own Important Consumer Information section of its website notes that ‘[c]redits earned are unlikely to transfer.’[/pullquote]

The requirements set forth by the Department of Education included a freeze on Pell grants and student loans dispersed to ITT Tech students, prohibition of the school enrolling any new student who required federal grants or loans, and a line of credit or cash deposit to the Department of Education of $250 million.[7]

Is the federal government just being a jerk, or is there more to it?

The new impositions may have largely been reactionary. In 2014, the Consumer Financial Protection Bureau sued ITT Tech for misrepresenting post-graduation student employment prospects and salaries, then pushing students to take out high-interest private loans on which they frequently defaulted.[8]

The Obama administration has likewise scrutinized the for-profit school for its questionable financial integrity and ability to serve students.[9] The most recent lawsuit came from the U.S. Securities and Exchange Commission in 2015, brought on grounds of fraud against ITT and two executives for allegedly “concealing major losses in two student loan programs.”[10] Both suits are pending in Indianapolis federal court.[11]

This August, ITT’s accrediting agency, the Accrediting Council for Independent Colleges and Schools, raised concerns that the school was not meeting standards of its accreditation, nor was it likely to.[12] The federal government followed with the new requirements, and now Tom feels as though he has no hope.

In fact, it could be the case that Tom has no hope at all.

Options for these students are limited. While universities and colleges are opening doors to former ITT Tech students,[13] ITT’s own Important Consumer Information section of its website notes that “[c]redits earned are unlikely to transfer.”[14] Should Tom choose to start back at square one with a comparable program, none of the federal loan debt he accrued during his time at ITT Tech would be discharged.[15]

The next best option? Quit. The stipulation noted above gives an option to either keep trying and hold onto wasted federal loan debt, or quit and possibly have it discharged.[16]

Now, Tom is pretty ticked off. But to whom should he direct his anger? The school was an alleged fraud, and the government merely reacted to that, but the government’s reaction sent Tom’s dreams crashing into a ditch. Should he blame the school for deceitfully getting his hopes up? Or, maybe, he simply ought to blame himself for failing to do more research.

In any case, the former students of ITT Technical Institute are in a frightening bind. With few options and mountains of debt and frustrations, the course of this tale will be one to watch with hands over our eyes.



[1] ITT Technical Institute, Wikipedia, (last visited Oct. 9, 2016).

[2] (last visited Oct. 9, 2016).

[3] ITT Technical Institute Freezes Tuition for Sixth Straight Year, PR Newswire, (last visited Oct. 9, 2016).

[4] (last visited Oct. 9, 2016).

[5] Id.

[6] Student Communication Announcement, ITT Technical Institute, (last visited Oct. 9, 2016).

[7] Id.

[8] ITT Educational Services Files for Bankruptcy After Shutdown, Bloomberg Markets, (last visited Oct. 9, 2016).

[9] Id.

[10] Id.

[11] Id.

[12] This might really be the end of ITT, The Washington Post, (last visited Oct. 9, 2016).

[13] Education Options, ITT Technical Institute, (last visited Oct. 9, 2016).

[14] Important Consumer Information, ITT Technical Institute, (last visited Oct. 9, 2016).

[15] – criteria (last visited Oct. 9, 2016).

[16] Id.

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