ITT Technical Institute shuts down, files Chapter 7 bankruptcy

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I know this news is at least a week old, but I didn't find out about this until earlier today when my mom told me, and I thought this would be a worthwhile story to share and start a discussion with.

The for-profit education industry has been facing increasing scrutiny under the Obama administration, primarily for leaving students deep in debt with worthless degrees, among several other issues. This is the second for-profit "technical institute" to collapse following last year's closure and sell-off of Corinthian Colleges (both institutions of which heavily advertised on daytime television over the years).

From https://www.indystar.com/story/money/2016/09/16/itt-files-bankruptcy/90523502/ :

ITT files for bankruptcy
James Briggs 9:31 p.m. EDT September 16, 2016

ITT Educational Services Inc. is unloading its assets after the shutdown of more than 130 campuses.

The Carmel-based company filed for Chapter 7 bankruptcy late Friday, initiating a trustee-guided liquidation process. It was the final move for the for-profit college operator, which last week announced it was shuttering its campuses and earlier this week disclosed it was ceasing all business functions.

ITT listed both its assets and liabilities at between $100 million and $500 million.

Jay Jaffe, an attorney for law firm Faegre Baker Daniels, who is representing ITT, did not respond to a request for comment. ITT this week laid off the remainder of its staff, including spokeswoman Nicole Elam.

ITT is the second major for-profit college operator to file for bankruptcy in the past two years amid a federal crackdown on the industry. Corinthian Colleges, which had nearly double ITT's number of students, went bankrupt in May 2015.

ITT has blamed its demise on overzealous government regulations. With ITT's accreditation already under review, the U.S. Department of Education in August issued several devastating sanctions, including a ban on enrolling new students who rely on federal aid.

But ITT's critics say the company created its own problems. ITT faced fraud charges from the Securities and Exchange Commission and investigations and lawsuits from about 20 state attorneys general. Government agencies have scrutinized the company over an alleged failure to disclose bad loans to investors, inflated job placement numbers and aggressive recruiting tactics.

As recently as the beginning of this month, ITT asserted in an SEC filing that it was trying to stay afloat by negotiating with the Education Department for terms that would let it stay in business. But ITT threw in the towel Sept. 6, announcing it would close all its campuses.

ITT on Wednesday disclosed that its senior lender, Cerberus Capital Management, seized the company's bank accounts. That move forced the company to cease operations Friday.

ITT's closure displaced more than 35,000 students and more than 8,000 employees, including at least 662 workers in Indiana. The company employed 275 people at its Carmel headquarters.

About 1,000 Indiana students were enrolled to start classes at ITT this month. Several colleges are offering incentives to former ITT students who want to continue their education. Colleges that are pitching themselves to ITT students include Ivy Tech Community College, Harrison College, Oakland City University, Indiana Wesleyan University, Western Governors University Indiana and the Indiana Institute of Technology.

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.

I will admit, despite the new problems that ITT's former students may be facing, after I've read numerous bad reviews of ITT (and Corinthian's schools including Everest Institute) over the years, that I think it's for the best that ITT got shut down.
Sidebar: I almost got suckered into enrolling in IT courses at ITT Tech back around 2008, when I was given information about relevant courses of study by my mental health caseworker, but (thankfully) I passed up on the opportunity, not least because it would have been a long drive for me just to attend classes.
I will also be glad that there will no longer be an endless stream of ITT ads during daytime television (unfortunately, though, this pretty much means more "bad drug" lawsuit ads and that).
I even wrote up a blog post about daytime television commercials which included commentary about the pitfalls of for-profit "technical institutes" such as the one discussed in this story a few years ago on the late Ever Grande City.