NEW YORK -- Another for-profit college has gone bust, leaving tens of thousands of students in the lurch.
ITT Educational Services announced on Tuesday that it is shutting down immediately, accusing the federal government of unfairly stripping it of eligibility for student aid.
The company, which was established nearly 50 ago, operates ITT Technical Institutes. It has around 40,000 students taking classes on campuses and online throughout the United States.
The school said it will now focus on helping students get their class records and figure out their next steps.
ITT said it eliminated the jobs of the "overwhelming majority" of more than 8,000 employees on Tuesday.
ITT Tech stopped enrolling new students on August 29, just a few days after it was cut off from a significant amount of federal funding by the government.
The Department of Education told the company on August 25 that it couldn't enroll new students who use federal financial aid.
The school accused federal officials of forcing the closure and denying it due process.
The company has been the subject of state and federal probes for various reasons, including its recruitment tactics, lending practices and job placement figures.
In order to have access to federal student loans, schools need to be accredited by a government-recognized accrediting agency. ITT Educational Services was found to be out of compliance with its accreditor's standards twice this year, according to the Department of Education.
For-profit schools tend to rely heavily on federal student aid.
The Accrediting Council for Independent Colleges and Schools recently asked the company for proof of why its accreditation should not be withdrawn or suspended.
Enrollment has been slipping for a while. In July, the company reported its new student enrollment dropped almost 22% from the same period the year before.
When a school closes its doors, it can leave its students stuck without a degree and massive student loans.
Corinthian Colleges filed for Chapter 11 bankruptcy protection in May of 2015 in the wake of alleged predatory lending practices and accusations of inflated job placement numbers, leaving about 16,000 students stuck without a degree, and thousands more with huge debts. Some students were eventually able to receive debt relief.
The Department of Education has said that ITT Educational Services' students could be eligible for a closed school loan discharge.
Enrollment in for-profit schools increased in the years following the recession when job growth was weak and people were looking to hone their skills or switch to more in-demand careers.
Below is copy of a letter sent by ITT to a student answering questions about the shutdown:
Important Information for You Going Forward
Please be assured that we are committed to keeping you informed about the impact on you of the closure of your school.
To that end, below is some key information to answer, what we imagine are, some of your immediate questions:
How do I see my grades?
You may access your academic record via the Student Portal by clicking this link. Please use your student email and network password to login. We expect to have all grades for the June 2016 quarter updated by Friday, September 9th.
How do I obtain a copy of my official transcript?
You may request a copy of your official transcript via the Student Portal by clicking this link. Please use your student email and network password to login. Graduates may also request an official transcript via the Alumni website by clicking this link.
Will my credits transfer to another institution?
As always, the decision to accept transfer credits is up to the receiving institution. You may view a list of other schools that have entered into articulation agreements with the ITT Technical Institutes at http://www.itt-tech.edu/articulation. Additionally, we have compiled a list of schools in your area that offer similar programs of study, as well as some institutions offering similar programs online, which you may want to contact. See the following question for a list of schools.
Are there any schools in my area with similar programs of study?
Click here to download a list of schools in your area with programs of study similar to those offered by your school, as well as some institutions offering similar programs online.
When is the last day my campus will be open?
While your campus will be closing immediately at the end of the June quarter, we will continue to provide resources to assist you in obtaining your transcript and other records. Please check the Student Portal by clicking this link for updated information from us about the issues covered in this notice and other important matters. In the near term, you may also email StudentQuestions@itt-tech.edu with questions.
In the future, after the Student Portal is no longer accessible, how do I obtain a copy of my records?
After your campus has closed and the Student Portal is no longer accessible, you will be able to obtain your records and other key contact information at www.itt-tech.edu. This site will house links to request your transcript, education verification, and other information.
Will I have to repay my student loans?
It may be possible for you to discharge your federal student loans and not have to repay them under certain circumstances. For more information about this, please click here.
Please know we are extremely disappointed to have to discontinue our operations after more than 50 years of serving students.
We want to thank all of the men and women who have diligently served you throughout your studies at ITT Technical Institute. We, and they, apologize for this unexpected disruption to your education and we sincerely wish you the best as you move forward.