After operating for nearly 50 years, ITT Technical Institute announced Tuesday it was permanently closing its doors. The immediate closure will displace approximately 40,000 students and leave over 8,000 employees without a job. This announcement comes after numerous other for-profit educational institutions have either been closing campuses across the country or shutting down altogether.
ITT Tech had been under investigation by the government for years, and faced its final blow over a week ago when the Department of Education banned the company from enrolling new students using federal student aid. This, along with a requirement to increase surety of Title IX aid, pushed them to the brink. Their parent company, ITT Educational Services, called the new regulations “unwarranted actions” and objected to a lack of a hearing or opportunity for appeal.
They close their doors a year after another for-profit college giant, Corinthian Colleges, became defunct after an onslaught of new federal regulations. This has been a trend as critics in the Obama administration have targeted the for-profit college industry in what some have called a “witch hunt.” DeVry and other well-known for-profit institutions have been taking hits as the new regulations and lawsuits keep rolling in.
Despite blossoming in the early 2000’s under what Obama officials claim were loopholes under the Bush administration, for-profit colleges have now faced lawsuits from various government entities, including the Justice Department and Department of Education. ITT Tech alone is being investigated by at least 18 state attorney generals.
Critics claim for-profit colleges lure unsuspecting students into programs that are costly and do not lead to careers. This criticism has some statistical proof for back-up: their institutions only enroll 11 percent of all students in the U.S., but account for 44 percent of all student loan defaults.
However, for-profit institutions counter that they offer opportunities for students who would otherwise not receive an education and are already at risk of defaulting on debt. They provide educational services to students who tend to have lower incomes, are first generation, and much older in age.
Will the industry be able to adjust to the growing federal regulations? That is yet to be known.