James Briggs

james.briggs@indystar.com

The Carmel-based company that runs ITT Technical Institute has stopped enrolling new students.

The move, prominently announced on ITT's website, goes beyond the U.S. Department of Education's decision last week to ban ITT from enrolling new students who depended on federal loans to pay for classes. Although the majority of ITT's students receive federal aid, the for-profit college chain could have continued accepting new students outside of the government's Title IV program.

ITT Educational Services Inc. did not respond to a request for comment. Company officials have yet to publicly respond to the Education Department's moves aside from a Securities and Exchange Commission filing in which ITT said it was "evaluating these additional sanctions and requirements, as well as all options available to it."

Trace Urdan, a Credit Suisse analyst who follows ITT, said the company's decision to stop accepting new students doesn't necessarily offer any clues about ITT's next move.

"The market for students that enroll without Title IV is essentially non-existent," Urdan wrote in an email. "The expense of processing applications only to have them cancel once they learn (they are) Title IV ineligible is not worthwhile."

ITT's future has been in question since the Education Department announced its sanctions amid an Obama administration crackdown on for-profit colleges. The SEC, Consumer Financial Protection Bureau and more than a dozen states are investigating ITT over its financial performance, marketing, recruiting and job placement numbers.

ITT Tech's collapse could help former students wipe out their loans

In addition to the Education Department's sanctions, two states had moved to block students from enrolling at ITT. California banned new enrollment at ITT's 15 campuses there and Wisconsin blocked enrollment at the company's two campuses in that state. ITT had 137 campuses across 39 states at the end of June, according to its most recent quarterly earnings filing.

Several analysts have told IndyStar that federal sanctions, especially a new requirement that ITT increase its reserves from $94.4 million to $247.3 million, are likely to force the company to close.

ITT has more than 40,000 students who remain eligible for federal aid. Should ITT close, the Education Department has suggested it will forgive the federal loans of existing students.

Former ITT students who have graduated or dropped out also might be able to get their loans discharged, the Education Department has said.

ITT's stock price continued to plunge Monday, dropping 19 percent to 44 cents per share. ITT shares traded at more than $2 before the Education Department's announcement Thursday.

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.

ITT Tech ceases all student enrollment

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