ITT Tech shuts down all its schools; one student says he's 'angry times 10 million'

ITT Tech student Nancy Valdez, 27, arrives at Torrance campus to find it closed. (Los Angeles Times)

Leon Wiggins II was looking forward to the start of classes next week as he closed in on a degree in ITT Technical Institute in Torrance and what he hoped would be a future in cybersecurity.

But on Tuesday, the 30-year-old from Long Beach and thousands of other students nationwide discovered that they would never receive an ITT diploma.

Advertisement

The company that operates the for-profit chain, one of the country's largest, announced that it was permanently closing all its campuses nationwide. It blamed the shutdown on the recent move by the U.S. Education Department to ban ITT from enrolling new students who use federal financial aid.

"Two quarters ago there were rumors about the school having problems, but they told us that anyone who was already a student would be allowed to finish," said Wiggins, who works as the assistant manager for a family-run auto parts business and went to ITT to open new opportunities.

"Am I angry?" he said. "I'm like angry times 10 million."

The shutdown will affect about 35,000 students who were preparing for the start of classes this month. It will also cost more than 8,000 employees their jobs.

Those students and others who left the school within the last 120 days would be eligible to have federal loans for their ITT education forgiven if they want to start over at another school, Education Department officials said.

And students in California could apply to for relief from private student loans and for refunds of cash they paid to ITT through the state's Student Tuition Recovery Fund.

Advertisement

The U.S. Education Department has begun reaching out to students as well as community colleges near ITT campuses, which are being encouraged to be flexible in allowing ITT students to transfer their credits.

The ITT Technical Institute campus in Orange. (Mark Boster / Los Angeles Times)

ITT Educational Services Inc. said it would focus on helping its students obtain their records and pursue their educations elsewhere.

"We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a nonprofit or public institution," ITT said in a statement.

The company has operated vocational schools on more than 130 campuses in 38 states, often under the ITT Technical Institute name. Last year, it enrolled 45,000 students and reported $850 million in revenue.

With the sudden closure of ITT Technical Institute, students are worried about their futures. (Ronald D. White)

But like many other for-profit college operators, ITT has faced federal and state investigations of its recruiting and accounting practices.

ITT's closure comes after Corinthian Colleges Inc. shut the doors of its schools and filed for bankruptcy last year. The Education Department agreed to forgive $171 million in loans owed by former students, most of them in California.

"Both Corinthian and ITT made the same bad decision, which was to guarantee third-party private loans" while pushing out more students into a weak jobs market after the Great Recession, said Trace Urdan, a Credit Suisse research analyst who follows the for-profit education sector.

Many smaller for-profit schools that focus on vocational education are feeling squeezed but aren't in danger of failing, he said.

Advertisement

The school’s decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk.


Share quote & link

The day after the U.S. Education Department's August decision, California imposed further restrictions on ITT. Citing concerns about the company's financial viability, the state Department of Consumer Affairs' Bureau for Private Postsecondary Education issued an emergency decision banning ITT from accepting new students at its 15 California locations.

The state also planned to seek to revoke ITT's approval to operate in California.

ITT blamed its closure on what it called unwarranted federal action.

"The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable," ITT said.

"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," the company said.

U.S. Education Secretary John B. King Jr. said Tuesday that his agency did not take its action lightly and that federal officials were committed to helping ITT's students.

"The school's decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk," King said in a blog post.

"We made a difficult choice to pursue additional oversight in order to protect you, other students and taxpayers from potentially worse educational and financial damage in the future if ITT was allowed to continue operating without increased oversight and assurances to better serve students," he said.

At ITT's campus on W. 190th Street in Torrance, a terse note taped to the main office door told anyone who might show up to refer to their email for more information. Students were angry and bewildered.

"It's starting to feel like maybe I wasted the last four years," said Nancy Valdez, 27, of Long Beach.

She hoped that her bachelor's degree in information systems and cybersecurity would help her protect hospitals and other important infrastructure from hackers.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

Advertisement

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

A cashier at Disneyland, Valdez lives with her parents to save money. She owes $10,000 in student loans.

Advertisement
Advertisement

You've reached your monthly free article limit.

Get Unlimited Digital Access

4 weeks for only 99¢
Subscribe Now

Cancel Anytime

Already have digital access? Log in

Log out

Print subscriber? Activate digital access