California Bars ITT Tech From Enrolling New Students

A day after federal regulators barred ITT Education Services from enrolling new students using financial aid at its ITT Technical campuses, a California regulator prohibited the education operator from enrolling all new students at its 15 schools in the state. 

The California Department of Consumer Affairs’ Bureau for Private Postsecondary Education issued an Emergency Decision [PDF] demanding that ITT Tech stop new enrollments at the locations starting Thursday.

The Bureau says it issued the order because the DOE’s action last week raised “grave concerns about the continued financial viability of ITT.”

“We took today’s action in the interest of protecting potential students who are considering enrolling in ITT,” BPPE chief Joanne Wenzel, said in a statement.

The Bureau will file an accusation to revoke the school’s approval to operate in California based on the charges and allegations that ITT is not financially viable to continue operating in the state within 10 days.

As part of the order, ITT has the right to ask for a hearing before the director of the Department of Consumer Affairs before the decision becomes effective. It was unclear if ITT would ask for such a hearing, if the company does, the hearing will be held Wednesday.

This isn’t the first time the BPPE has taken action against a for-profit education. The Bureau issued a similar Emergency Decision in 2015 barring Corinthian Colleges Inc. — the operator of Heald College, Everest University, and Wyotech — from enrolling new students in California.

That order came during the for-profit college operator’s collapse, which culminated with the closure or sale of all CCI schools.

The Bureau’s order came just a day after the Department of Education banned the company from enrolling new students who use federal financial aid.

According to the DOE, the ban was made after the Accrediting Council for Independent Colleges and Schools — which is facing its own issues — determined that ITT was “not in compliance” and is “unlikely to become in compliance” with accreditation criteria.

As part of the order, the education operator is also required to once again increase its existing letter of credit from $94.3 million to $247 million or 40% of all Title IV aid the school received in 2015 payable in full.

Action against the for-profit education company came amid increasingly heightened financial oversight measures put in place by the Department beginning in 2014 and continued and expanded over significant concerns about ITT’s administrative capacity, organizational integrity, financial viability and ability to serve students, the Department said in a statement.

ITT has been teetering on the edge of collapse for more than a year. It revealed in 2015 that it was the subject of a federal fraud investigation. The Dept. of Education then placed restrictions on ITT’s access to student aid after the school failed to account for millions in federal funds.

The educator has been sued by the Consumer Financial Protection Bureau over its loan practices, nursing students who say they were misled about the school, Massachusetts for allegedly harassing students, and by a whistleblower who alleges that the school deceived applicants about the education they would receive and their job prospects.

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