Dear ITT Tech Family,
On August 25, the U.S. Department of Education imposed a series of new requirements and conditions on the ITT Technical Institutes, including imposing conditions on our institutions’ continued participation in the federal student financial aid programs that the Department of Education administers. We proposed alternatives to the Department of Education, but they were rejected. Therefore, after evaluating the impact of these new requirements on our institutions, we have made the very difficult decision to discontinue our operations effective immediately at the end of the June 2016 quarter and to cancel the upcoming fall 2016 quarter that was scheduled to begin Monday, September 12.
At this time, we expect all students to be able to complete their current June 2016 quarter, including those students attending the Baton Rouge campus.
Please know we worked diligently to identify alternatives that would have allowed us to continue our operations. But the Department of Education’s actions have forced us to cease operations at the ITT Technical Institutes. We are truly sorry to have to make this decision.
A recent editorial by The Wall Street Journal described the federal government’s action as a “lawless execution.” With what we believe is a complete disregard by the U.S. Department of Education for due process to the company, hundreds of thousands of current students and alumni and more than 8,000 employees will be negatively affected.
Background
The Department of Education’s August 25 letter imposed a combination of requirements on ITT Educational Services, Inc. (ITT) that we believe are unprecedented in the history of the Department of Education. They required us to post a letter of credit or other cash deposit with the Department of Education of nearly $250 million, they imposed a freeze on our receipt of Pell Grants and student loans for all our students, and they prohibited us from enrolling any new students who needed any federal grants or loans to finance their education. We proposed alternatives to the Department, including giving us time to sell our schools to another company so that students could continue their education or conducting an orderly closure of our schools over the course of the September term. Days ago, the Department of Education told us they were rejecting our proposals, and standing by their new requirements.
The Department of Education has told us that the most recent event that caused the Department to place these additional restrictions on ITT was the action by our schools’ accrediting agency, the Accrediting Council for Independent Colleges and Schools (ACICS), to continue the “show cause” directive that ACICS had issued to ITT earlier this year, identifying areas of the ACICS accreditation standards that our schools were not fully in compliance with. ITT has been in extended discussions with ACICS about those issues, and ACICS recently told us that they were satisfied by our responses to some of those issues but that more remained to be done concerning other issues.
The Department of Education has instructed us to inform all students about these ACICS actions and to tell students that the ACICS accreditation standards concerning a “show cause” order state that the “Council determines that [the] institution is not in compliance with the Accreditation Criteria, and is unlikely to become in compliance.” ITT respectfully disagrees with these conclusions and has been working with ACICS to confirm that our ITT Technical Institutes remain worthy of continued accreditation.
ACICS recently informed ITT that we should submit additional information on the open issues and appear before ACICS at its next regular meeting in December to further discuss the schools’ ongoing accreditation. Despite the fact that our schools’ accreditation remains in place and ACICS has not made any final decision about our schools’ ongoing accreditation status, the Department’s actions, as described above, have made it impossible for the ITT Technical Institutes to continue to operate. Otherwise, ITT has been financially sound, had no intention of closing down, and has been responsive to all of the requests of the various regulatory agencies that oversee our schools.
Important Information for You Going Forward
Today is a sad day for our students, alumni, staff, and the entire ITT Tech family. For more than 50 years, we have remained committed to serving our students with quality, compliance, and customer service as our guiding principles.
As you move forward, know that we have honestly and diligently served our students. Because of this, we can all hold our heads high.
Please be assured that we are communicating with students. Our staff and employees are likewise top of mind during this difficult time. Because your transition is important to us, we will contact you about how this affects you. As such, we ask that you check your email for updates.
To access your Outlook email when not in the office, click on the following link: https://login.microsoftonline.com/. Please use your ITT Tech or ESI email address as the user name and your network password to login.
To access today’s press release, click on the following link: http://www.ittesi.com/. You can read our full statement under the Recent News section on the homepage of the Company’s website.
We thank you all for your unwavering commitment to your work and for your dedication to helping people (and their families) improve their lives through the pursuit of high-quality, career-based education.
Best,
Kevin M. Modany
Chief Executive Officer
ITT Educational Services, Inc.