ITT Tech Closes All Campuses, Affecting Nearly 7,000 Veterans

Veterans enrolled at ITT in California will no longer have tuition covered or receive a monthly housing allowance for classes, according to VA.
Veterans enrolled at ITT in California will no longer have tuition covered or receive a monthly housing allowance for classes, according to VA.

The Department of Education will be holding live online information and Q&A sessions regarding the closure of ITT Tech through September 20. See their website for more information.

ITT Technical Institute has shut the doors on all of its 130 locations in 38 states -- a move that affects thousands of military veterans or their dependents attending the for-profit school on the GI Bill.

The shuttering comes two weeks after the Department of Education banned the school from enrolling new students who used federal financial aid such as student loans or Pell Grants amid multiple investigations into its lending practices.

Shortly thereafter, the state of California imposed a separate statewide ban affecting all new enrollments at ITT Tech, including students paying with GI Bill funds or with cash. In 2015, more than two-thirds of all ITT Tech students utilized federal student aid.

The school also faced losing its accreditation based on a number of actions, including its administrative capacity, organizational integrity, financial viability and ability to serve students in a manner that complied with accepted standards.

The Carmel, Indiana-based technical institute for five decades was staple in for-profit education, with career-focused degree programs in specialties mainly centered on technical fields, such as electronics technology, nursing, criminal justice and information technology.

Overall enrollment at the school was 40,015 students as of June -- a decrease of 16.4 percent from the same period a year ago, according to the company's filings.

In 2015, some 12,500 vets attended the school. A total of 6,842 GI Bill recipients -- veterans or their dependents -- attend ITT Tech or planned to do so during an upcoming term, according to a recent email from Terry Jemison, a spokesperson for the VA's Veterans Benefits Administration, which oversees the educational program.

Revenue at the school has been dropping in recent years amid multiple government investigations into its parent company, ITT Educational Services Inc.

The company is being investigated by more than a dozen state agencies, and two federal agencies for various charges ranging from recruiting fraud to steering students to predatory in-house student loans. In 2015, the cost of obtaining a degree at an ITT Tech campus ranged from nearly $40,000 to more than $90,000.

The Department of Education has said that students who were recently enrolled at ITT may have their federal student loans for ITT classes forgiven. Their federal loan debt will be wiped away, and they will have the option of restarting their education somewhere new. The department also said that students -- especially those who are close to graduating -- who wish to continue and complete their program at a different school may be able to transfer their credits.

It is important to note that transferring credits may limit the ability to have federal loans discharged. See the Department of Education's website for more details.

If every eligible student applied for loan forgiveness, it would cost taxpayers more than $500 million, according to some estimates.

Students who were using GI Bill benefits to attend ITT Tech may not be so lucky.

Current law makes no exception for restoring GI Bill benefits paid to a school that goes out of business. So, if students were using the GI Bill to attend ITT Tech and can't transfer the credits to another school, they might be out of luck. All of the GI Bill benefits used for training at ITT Tech would be unavailable to use at another school. Congress would have to pass a law to provide financial relief to veterans affected by this closure.

Rep. Mark Takano, a Democrat from California and the most senior member of his party on the House Veterans Affairs Committee, on Tuesday renewed his call for legislation to aid student veterans who are hurt when a college closes. "The sudden shuttering of ITT Tech will hurt thousands of veterans who enrolled in search of a promising career but will receive an uncertain future instead," he said in a statement. "It is our duty to provide them the relief and support they need." Takano first called for such a legislative fix last year after the collapse of Corinthian Colleges, another for-profit school that was recently ordered to pay a nearly $1.2 billion fine for false advertising and misleading lending practices. His bill would restore Post-9/11 GI Bill benefits and training time to veterans who are affected by a school closure. It would also allow the Veterans Affairs Department to continue paying student veterans a monthly housing stipend.

Takano said student veterans often are targets of aggressive and even deceptive recruiting practices by for-profit education companies. He noted that Corinthian Colleges and ITT Tech together received a total of $1 billion in GI Bill money between 2009 and 2015.

-- Jim Absher can be reached at Jim.Absher@Monster.com.

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