ITT Technical Institute Closes All Campuses After Government Cuts Off Funding

LOS ANGELES (CBSLA.com) — ITT Technical Institute campuses will be shut down permanently after the federal government banned the for-profit school from enrolling new students who receive federal financial aid.

The announcement, made Tuesday morning by ITT Educational Services, Inc., said the corporation will shut down all of its 140 campuses across more than 35 states.

The company has 14 campuses in California, seven of them in the Greater L.A. area.

The move will impact 45,000 students, including Edward Campiani, and more than 8,000 employees nationwide.

Campiani said rumors started flying a few months ago that the government might shut the school down. "During our finals, what shocked me that one of the representatives came in and told us: 'I don't know if you heard the news. But there are some issues going.'"

Campiani said he was planning to get his associate and bachelor's degrees in network systems administration. "In the end, I was going to pay over $46,000. The whole program is $80,000."

The U.S. Department of Education announced on Aug. 25 that it would ban the schools from enrolling new students using federal financial funds and step up financial oversight of the for-profit educational provider after the school's accreditor had determined it was "not in compliance, and is unlikely to become in compliance with Accreditation Criteria."

"They were promising to find people jobs. And that was a fallacy," Campiani added. "My goal is to get an education. I don't know what avenue I will take right now."

ITT Tech released this statement: "We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution. We were not provided with a hearing or an appeal. The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable."

The Department of Education said students who were attending ITT Tech or had withdrawn in the last four months can apply for a closed school loan discharge to possibly have their loans forgiven. They can also transfer credits to another institution. Click here for more information.

For-profit colleges have come under increased scrutiny over the years from state officials, the Federal Trade Commission and the Department of Education, who have received thousands of complaints that students were duped into taking on hundreds of thousands of dollars in student loans by false job placement rates.

ITT Tech's demise comes on the heels of Corinthian College's closure last year. DeVry College was also accused of lying about student job prospects.