For-profit college chain ceases enrollment
INDIANAPOLIS The Indiana company that runs ITT Technical Institute has stopped enrolling new students.
The move, prominently announced on ITT’s website, goes beyond the U.S. Department of Education’s decision last week to ban ITT from enrolling new students who depended on federal loans to pay for classes. Although the majority of ITT’s students receive federal aid, the for-profit college chain could have continued accepting new students outside of the government’s Title IV program.
ITT Educational Services, based in Carmel, Ind., did not respond to a request for comment. Company executives had yet to publicly respond to the Education Department’s moves, aside from a Securities and Exchange Commission filing in which ITT said it was “evaluating these additional sanctions and requirements, as well as all options available to it.”
Trace Urdan, a Credit Suisse analyst who follows ITT, said the company’s decision to stop accepting new students doesn’t necessarily offer clues about ITT’s next move.
“The market for students that enroll without Title IV is essentially non-existent,” Ur- dan wrote in an email. “The expense of processing applications only to have them cancel once they learn (they are) Title IV ineligible is not worthwhile.”
ITT’s future has been in question since the Education Department announced its sanctions amid an Obama administration crackdown on forprofit colleges. The SEC, Consumer Financial Protection Bureau and more than a dozen states are investigating ITT over its financial performance, marketing, recruiting and job placement numbers.
In addition to the Education Department’s sanctions, two states had moved to block students from enrolling at ITT. California banned new enrollment at ITT’s 15 campuses there, and Wisconsin blocked enrollment at the company’s two campuses in that state. ITT had 137 campuses across 39 states at the end of June, according to its most recent quarterly earnings filing.
Analysts have said that federal sanctions, especially a new requirement that ITT increase its reserves from $94.4 million to $247.3 million, will probably force the company to close.