ITT Tech Shutters All Campuses, Including 2 In Mass., After Federal Aid Sanctions

ITT Educational Services headquarters in Carmel, Indiana, is shown on Tuesday. (Michael Conroy/AP)
ITT Educational Services headquarters in Carmel, Indiana, is shown on Tuesday. (Michael Conroy/AP)

The for-profit college chain ITT Technical Institute is shutting down all 130 of its U.S. campuses, including in Massachusetts in Norwood and Wilmington, 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 Sept. 12 -- 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.

The chain was banned on 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.

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.

Massachusetts Attorney General Maura Healey, who in April sued ITT Tech for allegedly deceiving students, blasted the school on Tuesday.

"If you're depending solely on federal funds to keep you afloat and, by the way, turning around and using 80 percent of those dollars to simply fund your marketing and advertising activities to recruit more students into your programs, that's not sustainable," Healey said.

Nationally, 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.

Massachusetts officials say they will try to help the more than 500 students here affected by the institute's shutdown.

Healey said those affected should do three things immediately: "Cancel all payments to the school, save your documentation, [and] contact our office so that you can apply for a discharge of all your federal loans," she said. "That's what we're asking students to do."

Carlos Santiago, Massachusetts' commissioner of higher education, said in a statement he's "consulting the leadership of our public colleges and universities to see if we can offer information and referrals for ITT students who wish to continue their education."

With reporting by The Associated Press' Collin Binkley and WBUR's Fred Thys


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