ITT is latest for-profit college closing Georgia campuses

Students enrolled at ITT Technical Institution, which is shutting its doors following a series of government sanctions, may be eligible to have their federal student loans forgiven, federal officials said Tuesday.

For-profit college operator ITT Education Services announced that it was closing all of its ITT Tech campuses, including four in metro Atlanta, and eliminating most of its 8,000 national staff members. The company has also cancelled its upcoming September quarter of classes.

ITT Tech is the latest of the for-profit colleges — many with local campuses — to close, after federal challenges and reports questioning some of the schools’ ethics and practices.

“With their federal loan debt wiped away, students can then decide whether to restart their education somewhere new,” Ted Mitchell, U.S. Under Secretary of Education said Tuesday in a call with reporters.

This is some reprieve for the roughly 40,000 students attending ITT Tech campuses across the country. The company did not identify how many of those were in Georgia.

The school had been hard hit by recent sanctions from the U.S. Department of Education, which last month barred it from enrolling any students who received federal financial aid and required ITT to notify students about its accreditation problems.

Under the sanctions, the Carmel, Ind.-based company was also required to increase its reserves to 40 percent of the federal financial aid received last year. The requirement would have meant increasing reserves from $94.4 million to $247.3 million, the Indianapolis Star reported at the time.

A statement from the company Tuesday blamed the federal sanctions for the schools’ closures, and called the actions “inappropriate and unconstitutional.

“The damage done to our students and employees, as well as to our stakeholders and the American taxpayers, is irrevocable,” read the statement. “… with (ITT Tech) ceasing operations, it will now likely rest on other parties to understand these reprehensible actions and to take action to attempt to prevent this from happening again.”

ITT operated 130 campuses in 38 states, serving 40,000 students, according to the company’s website. A spokeswoman declined to comment on the number of students enrolled at the Kennesaw, Duluth, Douglasville and Atlanta campuses.

Students currently enrolled or who have withdrawn from ITT within the last 120 days could apply to have their loans eliminated through the government’s closed-school loan program. Students can also continue their studies at another school by exploring transferring their credits. But, if the credits transfer to a similar program at another school, some of all of their ITT loans will no longer be eligible to be written off, according to information from federal officials.

The education department is contacting ITT Tech students about their options and plans to host a series of webinars to walk students through the options. Federal officials also plan to partner with states to host in-person transfer fairs at selected locations.

Consumer advocacy groups including the National Consumer Law Center applauded the government sanctions, but pressed for more help for students, including not requiring them to individually apply to have their loans discharged, and for help to allow former students to get relief from their loans.

ITT is the latest closure in a crackdown on for-profit college operators by the Obama administration, which has said the industry harms students by leaving them deep in debt and unable to find well-paying jobs. The administration, along with several state attorneys general, launched investigations or legal actions against for-profit providers over their recruitment practices, placement rates and costs.

The crackdown has had a big impact on the industry. In June, Education Management Corporation, the for-profit operator of Brown Mackie College, announced plans to close most of its 26 campuses, including its Atlanta location, over the next few years. The parent companies of Sanford-Brown, the Art Institutes and Le Cordon Bleu all announced closings or sold some of their campuses last year. Westwood College froze enrollment at all its campuses in December. The most notable for-profit sanctions led to Corinthian Colleges — which operated Everest, Heald and WyoTech campuses — to cease operations following state and federal legal challenges. Atlanta’s Everest campuses were sold and are now operated by another company.

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