ITT Technical Institute
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
ITT Technical Institutes was one of the largest for-profit college chains in the United States, operated by ITT Educational Services of Carmel, Indiana. Tracing its roots to 1969, it ran more than 130 campuses in 38 states offering technical education — information technology, electronics, business, drafting and design — to roughly 40,000 students, employing about 8,000 staff. About 80% of its revenue came from federal student aid under Title IV.
02 / ITT Technical Institute FAILURE REASONS
Failure reasons
ITT's business model depended on federal student aid for roughly 80% of revenue, leaving it exposed when regulators acted. The US Department of Education had expressed significant concerns about ITT's organization and financial viability since 2014; state attorneys general investigated allegations it misled students about job prospects. In August 2016 the department found ITT out of compliance with accreditation criteria, barred it from enrolling new students with federal aid, and raised its surety requirement from $94 million to over $247 million. After failing to sell its campuses, the company concluded it could not continue operating and shut all campuses on September 6, 2016.
03 / EVENT HISTORY
Events in the structured record
- Founding
ITT Technical Institutes traces its roots to 1969, growing over five decades into one of the largest for-profit college chains in the US.
- Regulatory pressure builds
The US Department of Education expresses significant concerns about ITT's organization and financial viability; roughly a dozen state attorneys general investigate allegations that ITT misled students about job prospects and admitted unqualified students.
- Sanctions and shutdown
The Department of Education bars ITT from enrolling new students with federal aid and raises its surety requirement from $94 million to over $247 million; on September 6, 2016 ITT Educational Services ceases operations at all 130+ campuses, ending classes for ~40,000 students and laying off most of its 8,000 employees.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
In August 2016 the US Department of Education banned ITT from enrolling new students with federal financial aid and raised its surety requirement from $94 million to over $247 million, after finding it out of compliance with accreditation and financial standards.
- 02
On September 6, 2016 ITT Educational Services ceased operations at all 130+ ITT Tech campuses, ending classes for ~40,000 students and laying off most of its 8,000 employees.
- 03
The parent company filed for bankruptcy shortly after; the closure was among the largest college shutdowns in US history.