ITT Technical Institutes Shutting Down After Federal Sanctions

SACRAMENTO (CBS13/AP) — ITT Technical Institutes will shut down its operations, the company announced on Tuesday.

The company says it has faced financial difficulty after federal sanctions. The company announced it is eliminating the majority of its more than 8,000 employees.

Last month, the U.S. Department of Education banned the for-profit college from enrolling new students who use financial aid.

Among the measures, ITT was ordered to pay $152 million to the department within 30 days to cover student refunds and other liabilities in case the company closes. The chain, based in Indiana, is still paying another $44 million demanded by the department in June for the same reason.

The education department also has prohibited ITT from awarding its executives any pay raises or bonuses, and it must develop "teach-out" plans that would help current students finish their programs at other colleges if the chain shuts down.

Education Secretary John King said the government is taking action to protect students and taxpayers following "troubling" findings about the company. Last month, a group that accredits ITT found that the chain failed to meet several basic standards and was unlikely to comply in the future.

According to the Bureau of Postsecondary and Private Education, affected students can try and transfer their credit to another school. If they can't, they should apply to have their federal loans discharged. As a last resort, the students can apply for California's tuition reimbursement program. It's a fund students pay into as part of their tuition. The state says there is currently $28 million in that fund.

The state says it will hold workshops in the coming weeks to help students with the process. The state also says ITT Tech has agreed to give students their transcripts.

RELATED: Full statement from the school | Getting help from the state | Getting help from the Feds | Federal information on ITT