ITT Tech Shutdown: Credit Transfer Options For Students Limited After For-Profit College Chain Closes

For-profit college company ITT Educational Services, Inc., announced Tuesday it was ceasing operations at all of its ITT Technical Institute schools after a number of state investigations and a battle with the United States Education Department. The news was welcomed by disgruntled alumni and critics of the controversial for-profit education system, but it left about 40,000 current students in the lurch.

What happens to them?

Students who were enrolled at ITT Tech on Tuesday or withdrew from ITT Tech after May 9 have essentially two options, as outlined on the Education Department's Federal Student Aid website: request a closed school loan discharge or attempt to transfer their class credits to another school.

But continuing a program of study at another institution isn't as easy as it might sound. Even before ITT Tech closed down, it included a warning note — in bold and italics — on its frequently asked questions page. "It is unlikely that any credits earned at the school will be transferable to or accepted by any institution other than an ITT Technical Institute," it read. There was also a lawsuit over the issue reportedly filed in 2007.

Because most for-profit colleges are accredited nationally, not regionally, credits don't typically transfer from one school to another, Academe reported in 2011. And even if they do, the prospects don't look good.

"The colleges most likely to grant credit are, unfortunately, the ones most likely to have low standards and therefore not be a good option for the students," Robert Shireman, a senior fellow at the Century Foundation, told the Washington Post.

Students raised this issue last year, as well, when Corinthian Colleges, Inc., suddenly shuttered all of its schools. The Education Department had to edit a list of viable transfer options it had posted after a public condemnation from Sen. Dick Durbin, D-Ill., and 12 attorneys general for recommending some colleges that were themselves under investigation, for-profit college critic David Halperin wrote on Republic Report.

To avoid trouble, ITT students hoping to transfer should use resources like the College Scorecard to evaluate alternative schools, according to Higher Ed Not Debt.

They still should be careful: If they manage to find a school that takes their credits, and they start a comparable program of study at the new institution, they could hurt their chances of getting their debt discharged.

Despite all of this, Education Secretary John King wrote in a blog post Tuesday that students shouldn't be discouraged. "Whatever you choose to do, do not give up on your education," he said. "Higher education remains the clearest path to economic opportunity and security. Restarting or continuing your education at a high-quality, reputable institution may feel like a setback today, but odds are it will pay off in the long run."