Now that the Department of Education has barred ITT Technical Institutes from enrolling new students who receive federal financial aid, the future is decidedly not bright for the for-profit college chain. With a potential shutdown looming, what are the options available to current ITT students?
Unlike last year’s sudden collapse of Corinthian Colleges Inc. — operator of Everest University, Heald College, and Wyotech — we know a bit more about students’ options when it comes to their future at ITT and what would happen if the schools close.
The DOE today released a guide of sorts for students currently enrolled at the for-profit educator, providing some needed information.
Will schools close? We’re not sure, and neither is the DOE. However, it is possible that history will repeat itself.
If you’ll remember, Corinthian Colleges began faltering after the DOE cut off its federal student aid in July 2014. The school and the DOE entered into an agreement to sell or close a majority of its campuses. Prior to the agreement CCI enrolled 72,000 students and received $1.4 billion in federal student aid.
The issues with ITT are a little different. For one, the Department has barred the school from enrolling new students; that wasn’t the case for CCI.
Additionally, ITT Tech is now required to increase its surety to $247 million, or 40% of all Title IV aid the school received in 2015. Surety funds are held by in a Federal Holding Account and are used to reimburse the DOE for liabilities related to the investigations, including student refunds, student loan cancellations and other expenses if ITT closes campuses.
Current ITT students with federal loans have some options:
• You can continue your courses at ITT with your federal student aid. There’s no immediate change to your program.
• You can transfer your credits to a new school (if that school accepts them) and complete your education.
• You can pause your education and wait to see how this matter resolves itself in the coming months. If ITT closes before you finish your program and you don’t transfer your credits, you will likely be eligible to discharge your federal loans.
For students close to graduating, the DOE says they should be able to finish their degrees undisturbed as long the schools don’t close.
If that does happen, ITT is required to provide teach-out options. As part of Thursday’s action, ITT must develop teach-out agreements with other colleges that provide students with opportunities to complete their studies.
Teach-out agreements are developed in the event an institution, or an institutional location, ceases operations before all enrolled students have completed their program of study.
Students who are concerned about their future with ITT are welcome to look at other schools where the can transfer credits, the DOE reports.
The DOE urges the student to consider these factors when looking to transfer:
• Whether your credits transfer will be up to the new school. It’s likely to vary based on the type of program and school you’re considering.
• If you transfer your credits, you may not be eligible to have some or all of your federal loans discharged if ITT ultimately closes.
• Before you transfer, ask yourself: Is the type of program I’ve started still the right one for me? Will finishing it open up the career opportunities I want? You may want to check out our College Scorecard as you think about the answers to those questions.
by Ashlee Kieler via Consumerist
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