After years of struggling, ITT Tech has finally shut down. This is why.
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ITT Tech’s History
ITT Tech was founded in 1946 as Technical Training Corporation. It was a vocational school that trained soldiers returning from World War II in electronics and technical fields. The school was later renamed ITT Technical Institute and began offering associate’s and bachelor’s degree programs in the 1970s. The school grew quickly, opening up over 100 campuses across the united states However, ITT Tech shut down in 2016 due to declining enrollment and financial problems.
ITT Tech’s founding
ITT Tech was founded in 1946 by Harold Geneen and Uniquely American in its approach to technical education, ITT Tech offered courses that were specific to training students for particular careers. This was different from most other technical schools, which tended to focus on more generalized sciences and engineering. ITT Tech grew quickly, and by the early 1960s, it had campuses in 22 states.
ITT Tech’s growth
In the years following World War II, ITT Tech’s growth was spurred by the United States military’s training needs and the launch of the Space Race. The company expanded its reach into both the technological and commercial arenas, establishing a presence in fields as diverse as electronics and insurance.
However, by the early 21st century, ITT Tech’s fortunes had begun to decline. The company was beset by lawsuits, investigations, and other legal problems, and its enrollments dropped sharply. In 2016, ITT Tech announced that it was ceasing operations due to “the current regulatory environment.”
ITT Tech’s Demise
ITT Tech, once a for-profit college chain with more than 130 campuses across 38 states, abruptly closed all its schools in September 2016. The company faced many lawsuits and investigations in the years leading up to its closure, alleging that it preyed on low-income students and left them saddled with debt. Here’s a look at the chain’s history and the events that led to its downfall.
The Obama administration’s regulations
In the late 1990s and early 2000s, ITT Tech was one of the hottest for-profit colleges in America. The company aggressively recruited students, especially low-income and working-class adults, with the promise of a well-paying career in a rapidly growing industry.
But by 2016, ITT Tech was struggling to stay afloat. The Obama administration had implement regulations that cracked down on for-profit colleges that left ITT Tech with few options. In September of 2016, the Department of Education barred ITT Tech from enrolling any new students who use federal financial aid. This effectively cut off ITT Tech’s main source of revenue and led to the company’s demise.
ITT Tech’s accreditation problems
In recent years, ITT Tech had been embroiled in a number of controversies, including accusations of fraud and predatory lending. Perhaps the most serious issue facing the school, however, was its accreditation.
Accreditation is crucial for any college or university; without it, students would not be eligible for federal financial aid, and the school would not be able to award degrees. In 2016, ITT Tech’s accreditation was placed on probation by the Accrediting Council for Independent Colleges and Schools (ACICS), one of the main accrediting bodies for for-profit colleges.
This meant that the school was at risk of losing its accreditation entirely, which would have been a death blow. In an effort to avoid this outcome, ITT Tech agreed to a number of conditions set by the ACICS, including increasing its financial reserves and improving its overall governance.
Unfortunately, these measures were not enough to save the school. In September of 2016, the ACICS decided to revoke ITT Tech’s accreditation effective immediately. This left the school with no choice but to shut down.
ITT Tech’s financial problems
ITT Tech’s financial problems began long before the company shut down. In 2007, the company was fined $2.25 million by the SEC for “improper accounting practices.” Then, in 2010, ITT Tech was accused of fraud by the Department of Education. The allegations were that ITT Tech had falsified job placement data in order to get more federal aid money.
After an investigation, ITT Tech agreed to pay a $44 million fine to settle the allegations. However, that was just the beginning of the company’s financial troubles.
In 2011, ITT Tech was hit with a class-action lawsuit alleging that the company had lured students into taking out loans by giving them false information about job placement rates and career prospects. The suit also accused ITT Tech of using high-pressure tactics to get students to sign up for loans that they couldn’t afford to repay.
ITT Tech denied the allegations, but in 2014, the company agreed to pay $1.5 million to settle the lawsuit. By this time, it was clear that ITT Tech was in serious financial trouble.
The company’s woes continued in 2015 when it was banned from enrolling new students who were using federal financial aid. Then, in 2016, the Department of Education severed all ties with ITT Tech and barred it from accessing any federal aid money. Finally, in September of 2016, ITT Tech announced that it was shutting down all of its campuses for good.
The Aftermath of ITT Tech’s Shutdown
After years of being mired in lawsuits and allegations of fraud, ITT Tech finally shut down in 2016. The for-profit college left thousands of students without a degree and millions of dollars in debt. The closure of ITT Tech was a devastating blow to the students, employees, and investors involved. In this article, we’ll take a look at the events leading up to the shutdown and the aftermath of the closure.
The effect on ITT Tech’s employees
When ITT Tech shut down, many of its employees suddenly found themselves out of work. Some had spent their entire careers at the company, and many were left with few options for continuing their careers in the same field. The shutdown also left ITT Tech’s students in a difficult position, as they now had to find new schools to finish their degrees.
The shutdown of ITT Tech had a ripple effect on the economy, as well. The company was a major employer in many communities, and its closure led to job losses for vendors and suppliers who did business with the school. The loss of ITT Tech’s campuses also meant the loss of significant sources of tax revenue for local governments.
The effect on ITT Tech’s students
When ITT Tech closed its doors for good in September of 2016, it left thousands of students without a college to attend. Some students were able to transfer their credits to other schools, but many were not. The closure of ITT Tech caused a lot of financial hardship for its students, as well as emotional distress.
For many students, ITT Tech was their last hope for getting a college degree. They had already been working full-time jobs and raising families while attending school, and the shutdown left them with no way to finish their degrees. The closure also meant that they lost the money they had already spent on tuition and books. Some students were able to get their tuition refunded, but others were not so lucky.
The emotional effect of the shutdown was just as devastating as the financial one. For many students, ITT Tech was more than just a school; it was a community. They made friends and formed study groups, and the sudden loss of all of that was very hard to deal with. Many students felt like they had wasted years of their lives trying to get a degree from a school that no longer existed.
The shutdown of ITT Tech was a tragedy for its students, both financially and emotionally. It is hoped that the other schools that have been affected by recent closures will be able to avoid the same fate.