ITT closes all campuses; government offers students help
The announcement Tuesday that ITT Technical Institute would be closing its 137 campuses crushed Elgin student Kelly McLoughlin's hopes of earning her bachelor's degree in cybersecurity at the school's Arlington Heights site.
The school's parent, Carmel, Indiana-based ITT Educational Services Inc., informed McLoughlin - one of more than 35,000 students across the country - that the school would close immediately, marking the latest casualty of tighter government oversight in the for-profit college industry.
That news has serious repercussions for students like McLoughlin who have hefty school loans and no way to finish their degrees at ITT, which also had campuses in Oak Brook and Orland Park.
McLoughlin, about a year away from graduation, learned she might be on the hook for $29,000 in student loans. She, like other students, faces a tough choice from the U.S. Department of Education: She can pay off the ITT loan with a new loan and transfer her credits to a new school. Or she can have the ITT loan forgiven, but she would lose her credits and have to start over.
"I want to invest my money in a degree, not get stuck with another loan," said McLoughlin, 30, the mother of a 1-month-old son. "But I don't like the idea of starting over again either."
The Education Department has been monitoring ITT for about two years after allegations of fraud and deceptive marketing tactics. ITT locations in Oak Brook and Orland Park did not answer phones Tuesday, and doors were locked and lights off at the vacated Arlington Heights office. It was not immediately known how many local workers and students are affected.
The closings happened two weeks after the Education Department said ITT would no longer be allowed to enroll new students who rely on federal loans and grants.
In a statement, ITT said it had no choice but to close: "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."
ITT has no one to blame but itself, Sen. Dick Durbin said in a statement.
"For years, the company exploited students and fleeced American taxpayers," Durbin said. "Today, its predatory practices have finally caught up to it. As a result of its actions, ITT Tech has put the futures of tens of thousands of students across the country in jeopardy. I call on the Department of Education to swiftly make these students aware of their eligibility for closed school discharges of their student loan debts and other options."
Undersecretary of Education Ted Mitchell said that the department is reaching out to ITT students about their options. He said the department will host a series of webinars this week and hold on-site sessions to help students.
The shutdown of ITT campuses puts hundreds of millions of dollars in federal financial aid on the line because the government is obligated to forgive the federal loans of students affected by the closure. ITT reported almost $850 million in total revenue in 2015, roughly $580 million of which was sourced from federal aid, according to the department. If all ITT students were to request loan forgiveness, taxpayers would be on the hook for half a billion dollars. The $90 million that ITT posted with the department will cover some of the losses.
• Bloomberg News contributed to this report.