The dramatic and sudden closing of all ITT Technical Institute campuses earlier this month left 40,000 students and 8,000 employees wondering what’s going to happen to them in the future.

The good news is debt incurred by ITT Tech students will likely be forgiven.

The bad news is that the credits they earned may not be transferable.

Plus, because of ITT’s reputation, it’s embarrassing for current students and even former graduates to list it on their resume.

What’s more is the closures could lead to a housing crisis for some veterans who were receiving housing allowances. The list of potential problems goes on and on.

As a for-profit school, ITT Tech was not accredited by the Higher Learning Commission, which requires certain standards from its schools.

ITT Tech had 130 campuses in 38 states. Thirty percent of ITT students nationwide are veterans.

The Higher Learning Commission will not allow regionally accredited schools to accept credits from for-profit schools that are not regionally accredited, like ITT, for example.

Why did this happen?

A week before ITT closed its doors, the government banned the school from enrolling new students receiving federal aid. ITT relies on federal grants and loans from students for the majority of its revenue. ITT pulled the plug on operations as a result.

However, the Department of Education has been worried about the college for several years.

ITT was facing lawsuits and federal/state investigations from the Consumer Financial Protection Bureau and the U.S. Securities Exchange Commission.

The last straw happened last month when the college’s accreditor (Accrediting Council for Independent Colleges and Schools) said that ITT was not in compliance and “unlikely to become in compliance” with its criteria.

Today’s postsecondary environment is in a constant state of flux and adapting to the changes is an opportunity for institutions to adapt to and succeed in the current climate, writes Jay Halfond, the former dean and professor at Boston University Metropolitan College.

Unfortunately, it isn’t happening on every level.

“For-profits pray for someone in the White House who will protect their federal source of funds and ignore their (own) accountability,” Halfond wrote.

In 2014, Time magazine ranked ITT Technical Institute No. 2 on its list of “The 5 Colleges That Leave the Most Students Crippled By Debt”.

Among ITT Tech graduates with loans due in 2011, 22% had defaulted by 2014.

The for-profit University of Phoenix had a lower default rate by percentage – 19% at Phoenix vs. ITT Tech’s 22%.

But the total number of students in default from Phoenix was much higher – 45,123 Phoenix students versus 11,260 ITT Tech students.

Now what?

The death of for-profit schools will likely continue which gives other institutions like online colleges with hearty programs the opportunity to absorb some of that business.

A prime example of a school that saved itself from closure is Regis College in Boston. Regis was once a small, private, all-women’s college. They opened their doors to men in 2002, which helped the school thrive. Another move that helped saved the brick and mortar school is when Regis expanded their nursing program into the online realm.

Online options could be a way for former ITT tech students to re-enroll in school without having to move.

A list of career colleges and trade schools that have formed agreements with ITT to make it easier for students to transfer credits can be found here.

There are two main options for the ITT students left in a lurch.

They can transfer credits to another school with a comparable program, but those students won’t be eligible for federal student loan forgiveness.

If they choose to cancel their loans instead, anyone enrolled at the time or withdrew within 120 days of the school’s closure has the legal right to have their federal loans forgiven under a “closed-school discharge” agreement.

The problem with that route is that students must start all over if they want to further their education.

U.S. Secretary of Education John B. King Jr. has warned students to steer clear of companies offering to help in exchange for money.

Applying for any form of loan forgiveness is free.

The future of for-profit colleges

Enrollment in for-profit colleges is declining.

DeVry University said the number of students taking classes is down 23% this year and the University of Phoenix is down 22%.

Harder government scrutiny is one of the reasons.

Other major players will start to shut their doors if they don’t change the way they do business, which is one of the reasons DeVry is trying to differentiate itself.

A few days ago, DeVry Education Group announced it will voluntarily limit the amount of federal revenue it receives back to the 1992-98 federal ratio.

Today the rule requires for-profits to receive at least 10% of their revenue from nonfederal sources, and DeVry plans to increase it to 15%.

Regulatory scrutiny is not going away. Here’s another interesting thing to follow: The Accrediting Council for Independent Colleges and Schools (ACICS) is the organization that accredited ITT Tech and said they were fed up with the school’s noncompliance issues.

But ACICS may be terminated real soon as recommended by a federal panel, according to Inside Higher Ed.

“When we see schools provide extremely poor outcomes for students – or even commit fraud – while maintaining accreditation, that is a black mark on the entire field,” said Ted Mitchell, the under-secretary of education in the Inside Higher Ed article.

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Cover Photo Credit: ITT Tech/ Facebook

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