Feds Cut Off Money to New ITT Students, Say It’s ‘Too Risky’

New students won’t be able to use federal student loans and grants to enroll at nearly all schools owned by giant for-profit college chain ITT Educational Services Inc., as part of a crackdown announced on Thursday by the U.S. Department of Education that threatens the cash-strapped company’s survival. “It’s too risky,” the department said.

ITT is one of the nation’s biggest for-profit college companies. Its 137 ITT Technical Institute and Daniel Webster College campuses and online programs collectively enroll some 40,000 students across at least 39 states, according to its most recent quarterly filing with the U.S. Securities and Exchange Commission. The Education Department’s attempt to penalize the company follows fraud lawsuits filed by the SEC and the Consumer Financial Protection Bureau. Other government agencies are also investigating ITT, according to the Education Department.