LOUISVILLE, Ky. (WDRB) -- ITT Educational Services has permanently ceased operations, according to a news release from the school.
The move comes after state and federal investigations focusing on the Carmel, Indiana-based, for-profit college chain's recruiting and accounting practices -- investigations resulting in actions the school calls, "inappropriate and unconstitutional."
The Associated Press reported last week that ITT had already stopped enrolling students, after being ordered to pay $152 million to the Department of Education within 30 days to cover student refunds and other liabilities in the event the school closed. The school had already been required to pay $44 million to the department in June.
The school system has campuses in Louisville, at 4420 Dixie Highway, and in Lexington, at 3000 Old Topps Road.
On Tuesday, the school released a statement announcing the closure:
It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service. With what we believe is a complete disregard by the U.S. Department of Education for due process to the company, hundreds of thousands of current students and alumni and more than 8,000 employees will be negatively affected."
The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes, and we will not be offering our September quarter. We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution.
Effective today, the company has eliminated the positions of the overwhelming majority of our more than 8,000 employees. Our focus and priority with our remaining staff is on helping the tens of thousands of unexpectedly displaced students with their records and future educational options.
This action of our federal regulator to increase our surety requirement to 40 percent of our Title IV federal funding and place our schools under "Heightened Cash Monitoring Level 2," forced us to conclude that we can no longer continue to operate our ITT Tech campuses and provide our students with the quality education they expect and deserve.
For more than half a century, ITT Tech has helped hundreds of thousands of non-traditional and underserved students improve their lives through career-focused technical education. Thousands of employers have relied on our institutions for skilled workers in high-demand fields. We have been a mainstay in more than 130 communities that we served nationwide, as well as an engine of economic activity and a positive innovator in the higher-education sector.
This federal action will also disrupt the lives of thousands of hardworking ITT Tech employees and their families. More than 8,000 ITT Tech employees are now without a job – employees who exhibited the utmost dedication in serving our students.
We have always carefully managed expenses to align with our enrollments. We had no intention prior to the receipt of the most recent sanctions of closing down despite the challenging regulatory environment that now threatens all proprietary higher education. We have also always worked tirelessly to ensure compliance with all applicable laws and regulations, and to uphold our ethic of continuous improvement. When we have received inquiries from regulators, we have always been responsive and cooperative. Despite our ongoing service to this nation's employers, local communities and underserved students, these federal actions will result in the closure of the ITT Technical Institutes without any opportunity to pursue our right to due process.
These unwarranted actions, taken without proving a single allegation, are a "lawless execution," as noted by a recent editorial in The Wall Street Journal. We were not provided with a hearing or an appeal. Alternatives that we strongly believe would have better served students, employees, and taxpayers were rejected. The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable.
We believe the government's action was inappropriate and unconstitutional, however, with the ITT Technical Institutes 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.
On Tuesday afternoon, Kentucky Attorney General Andy Beshear's office released a statement.
"Based on our concerns for Kentucky students, my office is closely monitoring the situation," Beshear said. "In fact, the Kentucky Attorney General is part of a 19-state coalition investigating ITT Tech. While it is our policy not to comment on investigations, I would encourage students to review information about ITT Tech on the U.S. Department of Education’s Website and continue to monitor that site over the next several days for updates on the issue."
The news comes as a shock to people like Misty Killinder, a nursing student and mother of two who thought she'd return for the fall semester next Monday at the ITT Tech campus on Dixie Highway.
"Honestly, we're all kind of numb and devastated," she said. "Our lives are being put on hold."
"It was kind of like you were on the edge of your seat not knowing the changes they were going to make," she added.
Instead, she's rocked like the nearly 60,000 other students who received the news.
ITT Tech stands as one of the largest private vocational schools in the country. The school says 14,000 companies have hired its graduates, from computer science to criminal justice.
But increasing complaints from students with high debt and no jobs led the government to take a closer look.
"They did not care if everything was together or if I was in class," said Kayla Blandford, a former ITT Tech student. "They just wanted the money to come through."
Blandford is one of seven former ITT Tech students in Louisville who filed a fraud lawsuit against the school. It may have played a part in the sanctions.
"The attorneys for the Federal Consumer Financial Protection Bureau reached out to me and wanted to watch this hearing, and flew out to watch this hearing," said attorney Jim Ballinger.
The U.S. Department of Education says ITT Tech students may be able to transfer credits to other schools or have their federal loans forgiven.
For Killinder, it's a small bit of hope, in an unsure time.
"I wish I knew what was next," she said. "I'm just praying and hoping."
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