Education Dept. Cuts Off Federal Aid to New Students at For-Profit ITT

The U.S. Department of Education is barring ITT Educational Services Inc. from enrolling new students with federal financial aid, the department announced in a news release on Thursday. The department is also increasing the amount of cash ITT must send the department from just under $100 million to roughly $250 million, among other things.

The department’s move may be its most substantial action against an individual for-profit educator since its heightened scrutiny of Corinthian Colleges caused that company to fold. And it follows many investigations into ITT’s practices.

“ITT’s decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk,” the under secretary of education, Ted Mitchell, said in a blog post.

ITT did not immediately respond to an emailed request for comment.

In July a corporate filing indicated ITT expected its enrollment could drop by 45 to 60 percent in the coming months.

Earlier this year, ITT’s accreditor — itself under fire for what critics called lax oversight — asked the institution to show why it should keep its accreditation.

According to the department’s release, the accreditor — the Accrediting Council for Independent Colleges and Schools — had determined that ITT “is not in compliance, and is unlikely to become in compliance with [Acics’] Accreditation Criteria.”