James Hoyer partner Jesse Hoyer provided insight on the closing of for-profit college ITT Tech, during an interview with ABC Action News in Tampa. Hoyer has extensive experience investigating and bringing suit against for-profit colleges for questionable practices.
ITT suddenly closed its doors Tuesday impacting 35,000 students and 8,000 employees. The school blamed the shutdown on recent action by the U.S. Education Department to ban ITT from enrolling new students who use federal financial aid, but Hoyer pointed out the DOE did so with good reason.
“It’s not the government that shut them down. They shut themselves down. If they were offering a viable, legitimate business, they would be able to get financial funding from other sources.” Hoyer explained.
ITT, like many for-profit colleges, depends heavily on taxpayer funding for students. In fact, some 80-percent of ITT’s tuition was paid through federal financial aid dollars. With that money source cut off, the school anticipated that it could no longer attract students to pay for its courses.
ITT was being investigated for several problems prior to the closing. In August, a group that accredits ITT found that the chain failed to meet several basic standards and was unlikely to comply in the future.
ITT’s closure comes after Corinthian Colleges Inc. shut the doors of its schools and filed for bankruptcy last year. The Education Department agreed to forgive $171 million in loans owed by former students, most of them in California.
Click on the video above to see the ITT Tech closing story by ABC Action News.