ITT Technical Institute announced Monday it is shutting down all of its campuses effective immediately after the Obama administration cut off access to federal student loans.
The shutdown means over 40,000 students suddenly have no school to attend, while almost all of the company’s 8,000 employees have lost their jobs.
While abrupt, the shutdown isn’t a huge surprise. ITT has been on the ropes since late August, when the Department of Education blocked any new students at the school from receiving student loans. Just a few days later, California regulators ordered the school to stop all new enrollments at its California locations. ITT was dependent on a steady flow of federal cash through student loans to stay in operation, so the cutoff caused a crisis that rapidly led to collapse.
The loan cutoff was the culmination of years of investigations targeting ITT, which has been accused of defrauding both prospective students and the federal government.
In a statement, ITT claimed it is the victim of a “lawless execution” at the hands of the Obama administration. (RELATED: Feds Drop A-Bomb On For-Profit Colleges)
“We were not provided with a hearing or an appeal,” the statement says. “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.”
Meanwhile, Democratic Sen. Dick Durbin of Illinois, one of the Senate’s top critics of for-profit schools, celebrated ITT’s demise.
“ITT Tech’s predatory practices have finally caught up to it,” Durbin said on Twitter. “Closure will end its exploitation of students & fleecing of taxpayers.”
ITT is just the latest former powerhouse of for-profit education to fall apart. Corinthian Colleges closed down in 2015 after a similar cutoff of student loans. Other major players, like the University of Phoenix, are still alive, but have seen huge enrollment declines.
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