VA warns GI Bill users about ITT Tech problems | MilitaryTimes

The company that runs ITT Technical Institute -- one of the country's most popular schools for users of the Post-9/11 GI Bill -- has stopped enrolling all new students a week after the federal government banned the for-profit school from enrolling students who use federal loans to pay for classes.

ITT Educational Services Inc. officials haven't publicly responded to the U.S. Department of Education's moves except for a Securities and Exchange Commission filing in which the company said it was evaluating the new rules and exploring its options.

Company officials didn't respond to the Indianapolis Star's request for comment.

Although the majority of ITT Technical Institute students receive federal aid, the college chain could've accepted new students outside of the government's Title IV program.

In fiscal 2015, the school enrolled 11,223 Post-9/11 GI Bill students at a cost of $151.2 million, making it the seventh largest GI Bill school in the country, a Military Times review of Veterans Affairs Department data indicates. A total of 36 students used military tuition assistance to attend the school, at a cost of a little more than $80,000, over the same time period, analysis of Defense Department and Coast Guard data shows. The Army accounted for the largest share of those students, with 19.

VA officials said GI Bill users are not prohibited from using the benefit at ITT, but the department has sent warnings to students through social media, direct mail and the GI Bill Comparison Tool.

"The Department of Education’s announced actions do not directly limit the use of GI Bill benefits at affected institutions," VA spokeswoman Nancy Hogan said in an email.

A VA Facebook post says the department "is actively monitoring this situation," and also warns that other schools may refuse to accept transfer credit from ITT.

"Bottom line, while [the Education Department's] actions do not directly affect your ability to use you GI Bill benefits at ITT at this time, you should carefully consider the potential impact that [the Education Department's] actions may have on whether you can achieve your educational goals by continuing to attend ITT," the Facebook post says. "Please keep in mind that we cannot restore your GI Bill benefits used at ITT if for some reason ITT closes its doors before you achieve your educational goals there."

Defense Department regulations prohibit any school that is not eligible for Title IV funding from enrolling TA students.

Trace Urdan, a Credit Suisse analyst who follows ITT, said the company's decision doesn't necessarily offer any clues about its next steps.

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

In addition to the Education Department's sanctions, California banned new enrollment at the company's 15 campuses there, and Wisconsin blocked enrollment at the institute's two campuses in that state.

At the end of June, there were 137 campuses across 39 states, according to the company's most recent quarterly earnings filing.