ITT Tech shuts down schools, including 2 in W.Pa. |
Local Stories

ITT Tech shuts down schools, including 2 in W.Pa.

Eric Felack | Tribune-Review
U.S. Army veteran Joseph Myers of North Buffalo, stands outside the now-closed ITT Technical Instutute at the Pittsburgh Mills mall in Frazer on Tuesday, Sept. 6, 2016. Myers stopped to see if any staff was there following an e-mail telling him there would be no more classes.
Eric Felack | Tribune-Review
The Pittsburgh Mills mall sold for $100 at auction.
Eric Felack | Tribune-Review
Recreational walkers stride past the now-closed ITT Technical Institute in the Pittsburgh Mills mall in Frazer on Tuesday, Sept. 6, 2016.

ITT Educational Services Inc. abruptly shut down its eponymous for-profit technical schools, closing more than 130 campuses and leaving as many as 40,000 students stranded in one of the largest college closures in American history.

The company has seven campuses in Pennsylvania, including locations at the Pittsburgh Mills mall in Frazer and on Campbells Run Road in Robinson.

ITT said it terminated the “overwhelming majority” of its more than 8,000 employees.

“I got two quarters left to graduate. You’ve got to be kidding me,” said Joseph Myers, 32, of North Buffalo as he walked up to the locked doors at the Frazer location Tuesday morning. Myers, an Army veteran, said he was studying information technology at the school for about two years and was due to graduate in March.

Although the school was not accepting new students, Myers said, existing students like him were told that they would be able to finish their programs. He got an email saying classes would not begin as expected on Sept. 12.

In a statement, ITT blamed the Department of Education for its downfall. Last month, the feds demanded the company produce an additional $153 million in collateral — nearly double its $78 million in cash on hand — to cover possible losses that the government might incur if the company were to suddenly fail.

“We believe the government’s action was inappropriate and unconstitutional, however, with the ITT Technical Institutes ceasing operations, it will now likely rest on other parties to understand these reprehensible actions and to take action to attempt to prevent this from happening again,” the company said.

The exterior and interior doors to the Pittsburgh Mills school were locked. There were no signs indicating that it had closed.

The school’s closing will deal another blow to the beleaguered decade-old mall, which has suffered from declining occupancy and value. A recent analyst report stated its value had fallen to $11 million, and it was more than half empty.

Mall General Manager Jerry Crites said he was not permitted to comment.

The ITT campus at Pittsburgh Mills had 140 students enrolled and the one in Robinson had 145 students, according to the Department of Education. Tuition and fees for a full-time student were $18,048 for the 2015-16 academic year.

Closing up is a stunning fall for ITT, a company whose stock reached highs of nearly $129 per share in 2007 as investors bet that Americans would increasingly flock to for-profit colleges for credentials that would enable them to advance in the economy or gain a foothold in the jobs market. Key to that calculation was the assumption that the Education Department wouldn’t impede colleges’ access to federal student aid.

The for-profit college industry has struggled with declining enrollments and tightened oversight from the department. Regulators have investigated the industry’s recruiting practices and accused companies of saddling students with debt without training them for jobs that would allow them to pay it back.

Downtown-based Education Management Corp. has laid off more than 700 workers since June 2015 and moved to shutter 18 of its Art Institute campuses over the next few years. DeVry University last year closed its Pittsburgh campus and went online-only.

The government annually doles out more than $100 billion in loans and grants to students. Colleges rarely face any consequences if their students fail to graduate or subsequently default on their debt. But an increasing array of allegations that ITT misled students about its success at placing graduates in their fields while defrauding investors — the company faces pending lawsuits from the federal Consumer Financial Protection Bureau, Securities and Exchange Commission, and the Massachusetts attorney general — led the Education Department to restrict the company’s access to taxpayer funds. ITT has denied the allegations.

Students enrolled at the company’s schools have received close to $5 billion in federal aid since 2010, Education Department data show. About $3 billion of that was in the form of student loans. Most of that money went to the company.

Students enrolled at the company’s technical schools will be able to cancel any federal student debt they incurred for their education if they decide against transferring their credits elsewhere.

Other former students are pushing to have their debts canceled by alleging that the company defrauded them into taking out the debt by advertising false job placement rates.

Taxpayers will record a loss on the debt cancellations. It’s exactly the kind of situation that the feds tried to avoid by demanding that the company produce additional collateral.

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.