ITT Technical Institute shut down all institutions nationwide on Tuesday, Sept. 13.
This included 130 campuses in 38 states, leaving roughly 43,000 students unable to continue their education at their institution and 8,000 faculty members out of jobs.
ITT Tech blames the closing of its buildings to the ban put in place by the U.S. Department of Education, deeming it as unwarranted federal action.
The school got its name from the international telephone and telegraph company, which owned the chain of schools prior to 1994 when the institution changed hands and became an independently operated and privately run business dedicated to higher education.
This privatization of higher education came at a time when private education was supported by liberals and conservatives alike.
Last month, the United States Department of Education banned ITT Tech from enrolling any new students who would be using federal financial aid.
ITT Tech was one of the major for-profit college industries in America, bringing in about $850 million in revenue last year.
ITT Tech has been under investigation by the Securities and Exchange Commission as well as other federal and state authorities.
They are being accused of “financial mismanagement and questionable recruiting tactics.”
“We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a nonprofit or public institution,” said authorities at ITT Tech.
The Obama administration has been cracking down on the for-profit college industry because of their use of “deceptive marketing to enroll vulnerable students who go thousands of dollars in debt for low quality educations,” The Wall Street Journal reports.
Last summer, the for-profit institution Corinthian Colleges, Inc. closed its doors for similar reasons as ITT Tech.
This closing could lead to a major tab for U.S. taxpayers to handle.
The government could forgive hundreds of millions of dollars (up to $500 million) in federal student loans for those who attended ITT before it’s closing.
In addition, forgiving loans of defrauded students could end up costing up to $43 billion.
Taxpayers will be affected because most of the student loans are government-backed.
Kevin Modeny, Chief Executive of ITT Technical Institute, stated, “The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable.”
Education officials claim that any students who left the school within the past 120 days will be eligible to transfer their federal loans to another school if they chose to continue their education elsewhere.
ITT Educational Services, Inc. has been in talks with other community colleges to encourage them to allow students to transfer credits from their ITT Tech educations.
They are also working diligently to give students their records so they are able to continue their education if they chose to do so, the LA Times reports.
Editor’s Note: Information from The Wall Street Journal and the LA Times was used in this report.