ITT Educational Services and Education Finance and Education Business and Student loans and Education & Workforce Development

ITT Educational says access to student-loan funds in danger

July 2, 2014

Carmel-based ITT Educational Services Inc., an operator of for-profit colleges, said the U.S. Department of Education may limit its access to student-loan funds because the company is unable to provide audited financial statements.

ITT wasn’t able to provide audited consolidated statements for 2013 or a compliance audit to the agency by June 30, according to a regulatory filing made Wednesday.

Company spokeswoman Nicole Elam said the reason for the financial-statement delay is that ITT is awaiting accounting guidance from the Securities and Exchange Commission, which it requested in March. She noted that prior company filings had disclosed the possibility that the request would cause ITT not to meet the deadline.

ITT and other for-profit educators have struggled recently while under heavy scrutiny from the federal government over lending practices.

The U.S. Consumer Financial Protection Bureau focused on the student loan programs in a February lawsuit it filed against ITT, accusing the company of predatory lending practices. ITT has sharply criticized the claims in the lawsuit and asked a federal judge to dismiss it.

That unresolved issue has delayed an audit of ITT's 2013 financial results and caused the company not to report complete first-quarter earnings information in May.

ITT’s stock drooped more than 2 percent in early-morning trading Tuesday before rebounding. Shares were up 2 cents, to $16.88 each, late in the morning. The stock has lost more than 50 percent of its value since the beginning of the year.

 ITT has more than 140 campuses in 35 states, including six in Indiana.
 

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