The California State Approving Agency for Veteran Education (CSAAVE), a division of the state’s Department of Veterans Affairs, suspended ITT Educational Services ability to accept GI Bill benefits after the company failed to provide required financial filings with the Securities and Exchange Commission, Military.com reports.
The suspension, which covers all 15 ITT Technical campuses operating in the state, only stops new enrollments and re-enrollment of veterans and their dependents who use the GI Bill. The 1,400 currently enrolled ITT Tech students using the benefits to fund their education are not affected by the suspension.
“CalVet takes very seriously our duty to ensure our California Veterans receive the education and training they are paying for with their earned GI Bill benefits,” Keith Boylan, CalVet Deputy Secretary of Veteran Services, said in a statement. “CSAAVE suspended ITT because ITT does not meet the required accreditation standards for approval.”
CalVet says that the company’s inability to provide the SEC with audited financial statements provided enough evidence to support the suspension of fund eligibility.
ITT Educational Services has until July 13 to produce the required financial documents. If it fails to do so, CalVet has the authority to withdraw the company’s VA provider status in California. At that point all students currently enrolled at the campuses would no longer be able to use GI Bill benefits to pay for their education at ITT schools in the state.
The action in California is just the latest issue ITT Educational Services has faced with regard to its finances.
Last week, the SEC filed fraud charges against current and former executives with the company for their part in concealing problems with company-run student loan programs.
The charges against the company, former CEO Kevin Modany and current CFO Daniel Fitzpatrick stem from their alleged fraudulent concealment of the poor performance and looming negative financial impact of two student loan programs the company financially guaranteed to investors.
According to the SEC complaint, the loans performed so poorly by 2012 that the company’s guarantee obligations were triggered. However, instead of disclosing the issue to investors, the SEC alleges that ITT and the executives engaged in a fraudulent scheme and made a number of false and misleading statements to hide the magnitude of ITT’s guaranteed obligations to the loan programs.
In addition to its SEC issues, ITT Technical Institute also made an appearance on the Department of Education’s Heightened Cash Monitoring list.
Placing schools on the list is a step the Dept. of Education’s Federal Student Aid office can take to provide additional oversight for a number of financial or federal compliance issues – that could can put restrictions on the college’s ability to access federal aid.
California Suspends ITT Tech GI Bill Eligibility [Military.com]
by Ashlee Kieler via Consumerist
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