The U.S. Department of Education will no longer allow ITT Educational Services Inc., the managing company of ITT Technical Institute, to enroll new students who use federal financial aid, the Associated Press reported.
The latest restriction the department has levied on troubled ITT Educational Services Inc. might be a fatal one, forcing the for-profit college chain to close its doors. According to Fortune, the ban cuts off what amounted to nearly 70 percent of ITT’s total revenue.
The measure is one in a series of moves the department has taken to rein in ITT’s practices. The company has come under scrutiny for concerns about its financial stability, administrative capacity, and graduation and job placement rates. According to U.S. News & World Report, ITT has been under federal oversight since 2014.
In addition to the ban, ITT has been ordered to pay the department $152 million within 30 days to cover liabilities in the event the schools do close. ITT enrolls roughly 40,000 students across more than 130 campuses in 39 states and online.
Since the Aug. 25 announcement of the ban, many media and expert voices have said the future of ITT looks bleak — Fortune reported the company’s stock dropped more than 60 percent following the news. At the time of publication, a visit to the school’s website revealed a barren homepage, the statement “We are not enrolling new students,” running as the page’s most prominent element.
Piper Jaffray analyst Peter Appert told Fortune that the investment bank saw little chance ITT could survive the Department of Education’s edict upon the company, and that the latest measure has “effectively put the company out of business.”
At press time, ITT listed no statement on its website regarding this latest news. The company was not immediately available for comment.
Bravetta Hassell is a Chief Learning Officer associate editor. Comment below or email editor@CLOmedia.com.