ITT Educational Services Inc. (ESI), a for-profit college that focuses on technology, tumbled as much as 14 percent after disclosing that U.S. regulators subpoenaed documents related to private loan programs for its students.
The Securities and Exchange Commission demanded documents relating to “actions and accounting” for the programs, which helped students pay for education costs that weren’t covered by state, federal and other funding sources, Carmel, Indiana-based ITT said Feb. 22 in a filing.
ITT fell 13 percent to $16.17 at 10:59 a.m. in New York trading. Earlier the shares slid as low as $16.05, the most in almost four weeks. The stock had lost three-quarters of its value in the past year before today.
Congress, along with state and federal investigators, has been probing for-profit colleges’ recruitment practices and students’ debt loads after leaving school. The SEC’s subpoena asked for documents related to agreements ITT made with outside entities to loan funds to students, according to the filing.
ITT Educational said in the filing that it’s cooperating with the SEC. Lauren Littlefield, a spokeswoman, didn’t immediately return a call seeking comment.
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