In recent years, ITT Educational Services, Inc. (ITT) has increasingly been the subject of state and federal investigations and this year it has twice been found out of compliance with its accreditor’s standards. Over time, ITT’s decisions have put its students and millions of dollars in taxpayer funded federal student aid at risk. In response, over the last couple of years, we at the Department of Education have increased our financial oversight over ITT and required the school to boost its cash reserves to cover potential damages to taxpayers and students.
These investigations are still ongoing and last week ITT still failed to address its accreditor’s concerns. In response, today we’re announcing further federal action: To protect prospective students and taxpayers, we’re no longer allowing ITT to enroll new students with federal aid. In addition, in case the school’s actions cause it to close, we’re increasing the amount of cash reserves it must send us and we’re ending its installment payment plan for the amount previously required. Finally, we’re slowing down when ITT receives student aid from the government to ensure that ITT is handling its finances properly.
As a current ITT student with federal loans, you have some options:
- You can continue your courses at ITT with your federal student aid. There’s no immediate change to your program.
- You can transfer your credits to a new school (if that school accepts them) and complete your education.
- You can pause your education and wait to see how this matter resolves itself in the coming months. If ITT closes before you finish your program and you don’t transfer your credits, you will likely be eligible to discharge your federal loans.
I imagine you have some questions. Let me try to answer a few of them for you.
I’m close to graduating. Can I finish my degree?
Yes, unless ITT chooses to close instead of continuing to teach students. If you’ve already started classes at ITT, you can continue using federal aid there as long as the school remains open. New students will not be able to use federal student aid for classes at ITT.
If ITT eventually closes, will I still have to repay my federal student loans?
If ITT closes you may be eligible for a closed school loan discharge. If we reach that point we’ll share information on that process as you consider your options through the Federal Student Aid’s announcement page.
I just recently enrolled at ITT, but I haven’t started classes yet. Can I still use federal aid?
No. If you are a new student who has never been enrolled at ITT in a previous semester, you cannot start classes at ITT in the fall semester of 2016 using federal student aid. I know this is probably a major disappointment and inconvenience, but it’s too risky. You should still pursue a higher education. You might want to use our College Scorecard to explore your options and find the program that’s right for you.
Will this impact my GI Bill benefits?
No. The U.S. Department of Veterans Affairs (VA) will notify affected GI Bill students that, at this point, the Department’s actions do not directly affect their GI Bill benefits. These actions, however, do raise significant concerns about ITT’s financial viability. Current GI Bill students at ITT should carefully consider the potential impact that the Department’s actions may have on their educational goals.
If you are a GI Bill student and have questions about your GI Bill benefits, please contact the VA’s Education Call Center at 1-888-442-4551 or visit the GI Bill website. If you are eligible for the GI Bill and want to explore your education options, you can use the GI Bill Comparison Tool to find the program that’s right for you.
I already completed my degree at ITT. Is it worthless?
No. You completed your degree at an operational and accredited institution. Nobody can take away your credentials or the skills you gained.
I already completed my ITT program but I feel like I was defrauded. Can I get my money back?
The actions we’re taking against ITT today are based on the operational and financial risk they pose to students and taxpayers, not on a finding that they defrauded students. There are, however, a number of open federal and state investigations into ITT campuses. If those investigations find evidence of fraud or other illegal behavior surrounding your specific program, you might be eligible for relief. You can also go to Federal Student Aid’s borrower defense page to learn more about how to file a claim if you believe the school misled you.
I’m nervous that ITT may close and I don’t want to start over. Should I transfer my credits?
That’s an option. It’s a choice that only you can make and one that you should consider carefully. Each student’s circumstances will be unique.
Here are a few key things to consider:
- Whether your credits transfer will be up to the new school. It’s likely to vary based on the type of program and school you’re considering.
- If you transfer your credits, you may not be eligible to have some or all of your federal loans discharged if ITT ultimately closes.
- Before you transfer, ask yourself: Is the type of program I’ve started still the right one for me? Will finishing it open up the career opportunities I want? You may want to check out our College Scorecard as you think about the answers to those questions.
Where can I go to get updates on what’s happening with my school? What’s the most reliable place for information?
Your school should update you directly. We’ll also post updates if there are major changes on Federal Student Aid’s announcement page.
Ted Mitchell is U.S. Under Secretary of Education.
The post Increased Oversight of ITT and the Impact on Students appeared first on ED.gov Blog.
Nine higher education organizations partnered to submit comments to the Department of Education regarding its proposed state authorization regulations for distance education. By working unison, we provided a strong and consistent single voice in making recommendations to the Department.The Partners
Contributing to the letter are six distance learning associations with total memberships of over 1,000 institutions:
- Instructional Technology Council
- Online Learning Consortium
- Presidents’ Forum
- UPCEA (University Professional Continuing Education Association)
- WCET (WICHE Cooperative for Educational Technologies)
- WCET State Authorization Network
We were pleased to be joined by the following partners who provided additional expertise and perspectives:
- EDUCAUSE (approximately 2,000 institutions)
- National Association of Student Financial Aid Professionals (with approximately 3,000 institutions).
The letter indicates support for many of the recommended regulations. All of the partners support increased information for students and improved consumer protections. Some of the proposed regulations need clarifications for institutions to understand how to comply. Other proposed rules simply fall short in meeting the Department’s own goals.
Our comments focused on:
- While the Department recognizes reciprocity as a means for an institution to obtain approval in a state, they want to assure that all state can still enforce their consumer protection laws. SARA allows states to enforce “general-purpose laws” that are applicable to “all entities doing business in the state, not just institutions of higher education.” The Department’s definition of “consumer protection” should mimic SARA’s or states could define it too broadly.
- State Complaint Processes. Institutions would be denied offering aid in states without a complaint process that meets Departmental requirements. Apparently, the expectation is that out-of-state institutions will: a) know which states are out-of-compliance, b) lobby those states to change their process, and c) hope that they are lobbying for change that meet the Department’s needs. While we support all students having a reliable route for complaints, this process simply will not work. We suggest alternatives
- Professional Licensure Notifications. The Department substantially underestimated the time for institutions to comply and the ability of state agencies to respond. A delay in enforcement time is needed
- “Adverse Actions” Notifications. Much clarification is needed as the types of actions differ greatly by accrediting and state agencies. We also recommend that institutions be required to report actions “taken” not actions “initiated.” The latter is often an investigation that does not result in negative consequences for the institution.
Thank you to all our partners who provide great advice and support throughout the process.WCET and SAN Comments
We also submitted a second set of comments that reflected the interests of the WCET State Authorization Network (SAN) members. We expressed support for the issues (listed above) that were raised in the joint letter. We also included several requests for clarification that were submitted by WCET SAN members. They had very good questions about the meaning of some terms or how they might be enforced.What’s Next?
The Department will consider the comments and has said that it will issue a final regulation by the end of the calendar year. If the final regulation is released before November 1, then the regulations become law on July 1, 2017. If they wait until November or December, then they become law on July 1, 2018. At its discretion, the Department may announce that it will delay enforcement of parts of the regulations until a later date.Bottom Line
If you are not in compliance as an institution or for your professional programs in a state in which you wish to enroll students, don’t hesitate to do so. Avoid the rush. You could get trampled.
The state regulators or licensing boards have no incentive to hurry your application to meet a federal requirement. They do all they can, but they often have minimal staffing.
WCET State Authorization
Director, Policy and Analysis
WCET – WICHE Cooperative for Educational Technologies
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