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ITT Tech Shutting Down All its Schools

ITT Tech will officially shut down all its schools after last month the government banned it from enrolling students receiving federal financial aid.
The campus of ITT Technical Institute in Anaheim, Ca
The campus of ITT Technical Institute in Anaheim, Calif.SUSAN GOLDMAN / SUSAN GOLDMAN
/ Source: Reuters

ITT Educational Services Inc said it would discontinue operations at its ITT Technical Institutes, in line with the U.S. Department of Education's directive, affecting more than 8,000 employees.

The for-profit education provider said on Tuesday that the move would also affect hundreds of thousands of students and alumni.

"We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution," ITT said.

The company has been under investigation by government authorities for allegations of fraud and deceptive marketing tactics.

In August, the U.S. Department of Education banned the company from enrolling students who get federal aid.

ITT's accrediting agency said in April that ITT Technical Institutes - which provide career-oriented education programs - had not demonstrated compliance with certain accreditation standards.

The for-profit education sector has been struggling with falling enrollment, poor job placement records and regulatory scrutiny.

ITT's shares were halted in premarket trading.