Schools with career-oriented programs that fail to comply with a new rule announced Thursday by the Obama administration stand to lose access to federal student-aid programs.
Investors warmed to news that student enrollment during the spring and summer fell less than expected and that ITT has the cash on hand to get through recent troubles caused by student loan losses.
ITT Educational Services Inc. dodged a bullet from the U.S. Department of Education, according to a securities filing issued Friday morning, but now faces a new threat: a potential enforcement action from the U.S. Securities & Exchange Commission.
For-profit college ITT Educational Services Inc., already under pressure from the U.S. Education Department, is facing stricter terms from lenders that could put its operations at risk.
Carmel-based ITT Educational Services no longer has a margin of error, as it tries to dig out from a scuttled real estate deal, tightened rules from lenders and the feds, and its CEO’s pending resignation.
Carmel-based ITT Educational Services Inc. announced late Monday afternoon that CEO Kevin Modany planned to resign within six months. The struggling for-profit education firm has drawn scrutiny from government officials for its marketing and lending practices.
The real estate deal would have brought as much as $119.1 million for the struggling, Carmel-based education firm.
The so-called “90/10 rule” limits a for-profit college to getting no more than 90 percent of its revenue from the government. However, veterans’ and military tuition programs are excluded from the cap, and the colleges have aggressively recruited from the military.
Corinthian Colleges Inc., which competes against Carmel-based ITT Educational Services Inc., said Tuesday that a campus in Indiana is on its closure list.
Carmel-based ITT Educational Services Inc. said the U.S. Education Department may limit its access to student-loan funds because the company is unable to provide audited financial statements.
Corinthian Colleges is a competitor of Carmel-based ITT Educational Services Inc. Firms in that field have seen enrollment drop amid heightened government scrutiny.
ITT Educational Services Inc. stock plunged more than 31 percent Thursday after it announced that it spent an extra $43.7 million in the first quarter to cover mounting losses on private student-loan programs.
Net income growth among nine big credit unions serving the metro area moderated in 2013 after record earnings for the industry locally and largely across the nation in 2012.
But in an interview with IBJ, ITT Educational Services CEO Kevin Modany asserted that for-profit colleges are a good deal, that they produce better results than community colleges, and that they are critical for the state and nation to close the skills gap among workers.
ITT Educational stock fell Friday after the Obama administration said it has revised its regulatory package for for-profit colleges, rewriting a proposal that the education industry blocked in court almost two years ago.
The shoppers, who were hired by the Carmel-based operator of for-profit colleges, generated the bulk of the material cited in the Consumer Financial Protection Bureau’s complaint.
Carmel-based ITT Educational Inc. said it’s unable to file its 2013 annual report because of a federal investigation into its accounting practices.
ITT Educational Services took it on the chin in the fourth quarter as big payments stemming from a 2009 student-loan arrangement forced an $11.6 million loss. Adding to the woes is another probe by the federal government.
For-profit colleges, bruised by years of investigations and rule-making, may face additional financial pressure from a new wave of state probes by attorneys general and the U.S. Consumer Financial Protection Bureau.