Perhaps the best-known name in the world of the for-profit career college, ITT Technical Institute, has been handed what appears to be a death sentence from the feds, in the form of new restrictions and requirements that make it virtually possible the college chain will be able to continue in operation.
The move comes as the federal government continues its crackdown on for-profit colleges, with particular emphasis on so-called “career colleges” that are designed to prepare graduates for specific career fields…but have a much less-than-stellar record in doing so. Career colleges tend to blur the line that divides “vocational school” and “college,” but their status as colleges allow for the use of federal student aid to defray costs, and that has proven to be at the root of the government’s animus toward many of them. Career colleges have built an unsavory reputation for producing graduates unable to secure meaningful jobs in the career fields for which they were ostensibly trained, and so not only have grads found themselves with degrees that are, for all intents and purposes, useless, but, adding insult to injury, they are also on the hook to repay tens of thousands…in many cases, even hundreds of thousands…in loan obligations precisely for a career-based education that has yielded no employment.
In the case of ITT, the U.S. Department of Education took on Thursday what many are calling unprecedented action, given that the requirements handed to the school look to be a specific attempt to shut it down. Not only did the feds ban ITT Tech from accepting any new students intending to use federal aid to pay for school, but they ordered ITT to inform all current students that the school’s accreditation was not secure; ITT is nationally accredited by the Accrediting Council for Independent Colleges and Schools (ACICS), and that accrediting body is defending itself against a formal DoED recommendation that its accreditation authority be withdrawn.
Perhaps most devastating of all, however, for the college chain’s future, is the requirement that, in order to continue, ITT must raise reserves from $94.4 million to $247.3 million, which represents 40 percent of the federal student aid money received by the school in 2015. If the school is unable to provide a letter of credit that verifies the new reserve amount within 30 days from the date the requirement was issued, it has to shut down. No one believes there’s any chance of ITT successfully meeting that requirement.
As a matter of fact, at the time this article was written, the homepage of the official website for ITT Tech reflects the following message: “We are not enrolling new students.” In truth, ITT Tech is likely a thing of the past.
By Robert G. Yetman, Jr. Editor At Large