Lone Star College steps up to help former ITT Tech students

Institute closes after feds yank financial aid

By Aaron Barker - Senior Web Editor , Lea Wilson - Digital News Editor

CARMEL, Ind. - ITT Technical Institute ceased academic operations at its campuses on Tuesday after the U.S. Department of Education yanked its ability last month to use federal financial aid for its students.

According to a news release from ITT Educational Services, the company eliminated the positions of the majority of its 8,000 employees. The remaining staff will focus on helping students with their records and future educational options.

After the for-profit education provider came under federal scrutiny last month for its use of financial aid, the Education Department ordered the company to increase its surety requirement to 40 percent of its federal funding. The sanctions also prohibited the company from receiving any financial aid for tuition.

The schools stopped enrolling students last week.

Discharging debt

If you are currently or were enrolled at ITT, you might be eligible to have your federal loans discharged.

Click here to read more about closed school loan discharge.

You do have to meet certain eligibility requirements, and should continue to make payments on your loan while your application is processing.

Click here for the application to discharge loans.

You have to contact your loan servicer to have your federal loans discharged.

If you received a loan through a private lender, you must contact that lender to see what your options are.

Transferring credits

If you want to continue your education, the US Department of Education advises that you may be able to transfer your credits.

You must contact a prospective college to see if they will accept ITT credits.

It is important to note that if you transfer credits, you may not be able to discharge federal loans.

The company on Tuesday sent the following letter to students from U.S. Education Secretary John B. King Jr., confirming the closing of campuses and its commitment to helping students in their next steps:

"Today, ITT Educational Services Inc. (ITT) announced that it is closing all of its ITT Technical Institute campuses. For most of the world, that news will be covered as a business story or a political one, but I know that for you it is deeply personal. You are probably wondering what this means for your future; how it is going to affect your finances and your ability to continue your education.

"In recent years, ITT has increasingly been the subject of numerous state and federal investigations. In August, ITT’s accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS), determined that ITT 'is not in compliance, and is unlikely to become in compliance with (ACICS) accreditation criteria.' This came amid increasingly heightened financial oversight measures put in place by the department over the past two years due to significant concerns about ITT’s administrative capacity, organizational integrity, financial viability and ability to serve students.

"The school’s decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk. Last week, the Department of Education took oversight actions to prevent ITT from continuing to add to that risk. When we made that decision, we did not take it lightly. One possible outcome of oversight actions is that a school may choose to close rather than take corrective actions, which can cause disruption and disappointment for current students.

"Ultimately, 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.

"We are committed to helping you as you consider next steps. Most immediately, you have two basic options to choose between:

"1. If you are currently or were recently enrolled at ITT, you may be eligible to have your federal student loans for your program at ITT discharged. Your federal loan debt will be wiped away and you will have the option of restarting your education somewhere new. We will post and update information about how to receive a discharge at our ITT announcements page.

"2. If you wish to continue and complete your program at a different school – especially if you are close to graduating – you may be able to transfer your credits. It is important to note that transferring your credits may limit your ability to have your federal loans discharged. Closed school discharge may be an option if you enroll in a different program that does not accept your ITT credits.

"Both of these options have pros and cons, depending on your unique circumstances, so it is important that you consider your specific situation carefully. You can find some information to start with at our ITT announcements page. The department’s Office of Federal Student Aid is ready to support you with resources and information, including through this website, and will be updating you with more information in the coming days and weeks.

"Whatever you choose to do, do not give up on your education. Higher education remains the clearest path to economic opportunity and security. Restarting or continuing your education at a high-quality, reputable institution may feel like a setback today, but odds are it will pay off in the long run. There are people and tools – like our College Scorecard – out there to help you pick a program that gives you a real shot at success.

"I am proud of your hard work and dedication, and we will do all we can to continue to provide information to you on your options.

The company said that it was forced to conclude that it can no longer operate its ITT Tech campuses. In the statement, the company called the government’s action unwarranted and lawless.

"We believe the government's action was inappropriate and unconstitutional," the statement said. "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 it had no intention of closing down until the actions by the federal government.

According to the Education Department, ITT Tech received an estimated $580 million in federal money last year.

The company's full statement follows:

"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.

"The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes, and we will not be offering our September quarter. We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution.

"Effective today, the company has eliminated the positions of the overwhelming majority of our more than 8,000 employees. Our focus and priority with our remaining staff is on helping the tens of thousands of unexpectedly displaced students with their records and future educational options.

"This action of our federal regulator to increase our surety requirement to 40 percent of our Title IV federal funding and place our schools under "Heightened Cash Monitoring Level 2" forced us to conclude that we can no longer continue to operate our ITT Tech campuses and provide our students with the quality education they expect and deserve."

"For more than half a century, ITT Tech has helped hundreds of thousands of non-traditional and underserved students improve their lives through career-focused technical education. Thousands of employers have relied on our institutions for skilled workers in high-demand fields. We have been a mainstay in more than 130 communities that we served nationwide, as well as an engine of economic activity and a positive innovator in the higher-education sector.

"This federal action will also disrupt the lives of thousands of hardworking ITT Tech employees and their families. More than 8,000 ITT Tech employees are now without a job – employees who exhibited the utmost dedication in serving our students.

"We have always carefully managed expenses to align with our enrollments. We had no intention prior to the receipt of the most recent sanctions of closing down despite the challenging regulatory environment that now threatens all proprietary higher education. We have also always worked tirelessly to ensure compliance with all applicable laws and regulations, and to uphold our ethic of continuous improvement. When we have received inquiries from regulators, we have always been responsive and cooperative. Despite our ongoing service to this nation's employers, local communities and underserved students, these federal actions will result in the closure of the ITT Technical Institutes without any opportunity to pursue our right to due process.

"These unwarranted actions, taken without proving a single allegation, are a "lawless execution," as noted by a recent editorial in The Wall Street Journal. We were not provided with a hearing or an appeal. 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.

"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."

Lone Star College released a statement announcing it is ready to assist students affected by ITT's decision.

The statement is below.

Lone Star College announced that it is mobilizing to assist local students in the wake of today’s announcement by ITT Technical Institute that it is closing all of its campuses nationwide, including ITT North and ITT West in the Houston area.

Current and recent ITT students should go to LoneStar.edu/ITTHelp for more information.

On Wednesday, Sept. 7, special Lone Star College advisors will be available at 9 a.m. to answer questions and assist ITT students. Advisors can be reached by email at ITThelp@LoneStar.edu or by calling 281-362-7827.

ITT students may also view a list of Lone Star College’s current Programs of Study here.

ITT Technical Institute had two Houston locations, 15651 North Fwy, Houston, TX 77090, and 2950 S Gessner Rd, Houston, TX 77063. The U.S. Department of Education has posted information at ITT announcements page regarding the closure of ITT locations and eligibility for ITT students to have their federal students loans discharged.

Known for its leadership, innovation and steadfast commitment to student success, Lone Star College provides high-quality academic transfer and workforce education / career training programs to more than 83,000 credit students each semester, and a total enrollment of 95,000 students. LSC is training tomorrow’s workforce today and redefining the community college experience to promote student success and economic prosperity. Stephen C. Head, Ph.D., is the chancellor of LSC, the largest institution of higher education in the Houston area, which consists of six colleges, eight centers, two university centers, Lone Star Corporate College and LSC-Online. To learn more visit LoneStar.edu.

FOR MORE INFORMATION:

Bill Van Rysdam
832-813-6206, desk
Bill.VanRysdam@LoneStar.edu

Jed T. Young
832-813-6521, desk
281-974-6878, cell
Jed.T.Young@LoneStar.edu

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