ITT Technical Institute in Tucson is facing a bleak future after the federal government banned the for-profit college chain from providing federal financial aid to new students.
The U.S. Education Department announced the action Thursday, citing “significant concerns about ITT’s administrative capacity, organizational integrity, financial viability and ability to serve students.”
About 70 percent of the national chain’s $850 million in total revenue came from federal aid last year, so the inability to offer aid to new students effectively cuts off the company from its biggest source of potential customers.
Parent firm ITT Educational Services Inc. operates more than 130 campuses in 38 states including four in Arizona.
Education Secretary John B. King said in a statement that “it simply would not be responsible or in the best of interests of students to allow ITT to continue enrolling new students who rely on federal student aid funds.”
Current ITT students can continue receiving federal aid to attend the college under the new measures.
The Tucson ITT location at 1455 W. River Road had 342 students last fall with three full-time faculty and 32 part-timers, federal data show. The average annual cost for tuition and fees is around $18,000, the data show.
Company officials couldn’t be reached for comment Thursday.
Since January, three other local for-profit colleges — Brown Mackie, the Art Institute of Tucson and Tucson College — have announced plans to shut down, citing declining enrollment.
The for-profit education industry as a whole has been under federal scrutiny in recent years amid concerns that students are amassing big federal loan debts for high-priced degrees that often don’t improve employment prospects.
Current ITT students can stay and finish, transfer out or take a break from school “and wait to see how this matter resolves itself,” said Undersecretary of Education Ted Mitchell.
If ITT closes, students who didn’t finish their programs will likely be eligible to have their student loans forgiven, he said.
