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(x-posted from GD) ITT Tech faces sanctions that could put it out of business within weeks
GD thread: ITT Tech could close down within weeks
Source: Indianapolis Star
ITT Tech faces sanctions that could put it out of business within weeks
By James Briggs
Indianapolis Star
AUGUST 26, 2016, 10:31 AM
The federal government has issued what analysts are calling a death sentence for ITT Technical Institute, while offering assurances that the for-profit college chain's students will be taken care of.
The Education Department on Thursday handed down a series of devastating restrictions that could put Carmel, Ind.-based ITT Educational Services Inc. out of business within weeks. The government banned ITT from enrolling new students who depend on federal aid, the source of most of the company's revenue, and required it to warn current students that its accreditation is in jeopardy.
Even more onerous, though, is a requirement that ITT must increase its reserves from $94.4 million to $247.3 million, or 40 percent of federal student aid the company received in 2015. ITT has been ordered to provide a letter of credit for the beefed-up surety, which is meant to support students in case the company closes, within 30 days.
The Education Department's announcement sent shares of ITT plummeting 35 percent to $1.40. The actions come amid a federal crackdown on for-profit colleges that already has caused Corinthian Colleges to close last year and Brown Mackie College to close all but four locations.
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By James Briggs
Indianapolis Star
AUGUST 26, 2016, 10:31 AM
The federal government has issued what analysts are calling a death sentence for ITT Technical Institute, while offering assurances that the for-profit college chain's students will be taken care of.
The Education Department on Thursday handed down a series of devastating restrictions that could put Carmel, Ind.-based ITT Educational Services Inc. out of business within weeks. The government banned ITT from enrolling new students who depend on federal aid, the source of most of the company's revenue, and required it to warn current students that its accreditation is in jeopardy.
Even more onerous, though, is a requirement that ITT must increase its reserves from $94.4 million to $247.3 million, or 40 percent of federal student aid the company received in 2015. ITT has been ordered to provide a letter of credit for the beefed-up surety, which is meant to support students in case the company closes, within 30 days.
The Education Department's announcement sent shares of ITT plummeting 35 percent to $1.40. The actions come amid a federal crackdown on for-profit colleges that already has caused Corinthian Colleges to close last year and Brown Mackie College to close all but four locations.
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Read more: http://www.chicagotribune.com/business/ct-itt-tech-sanctions-20160826-story.html
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