ITT Technical Institute

ITT Technical Institute's 2016 closure after 50 years demonstrated how for-profit education could be destroyed by regulatory action when business practices crossed legal lines. The Department of Education banned ITT from enrolling students using federal financial aid after finding deceptive recruiting, poor outcomes, and predatory lending practices. Without federal student loans (90%+ of revenue), ITT couldn't survive. The mechanism failure was regulatory dependency without regulatory compliance. ITT's business model depended on federal student loans, but its practices violated the spirit and letter of the regulations that enabled those loans. When regulators finally acted, the company had no alternative revenue source. This is the biological equivalent of an organism dependent on a host that eventually develops immunity. ITT's closure left 35,000 students stranded and $500+ million in federal student loan discharges. The company became a symbol of for-profit education's problems—recruiting vulnerable students, loading them with debt, and providing credentials that didn't lead to promised careers. The closure triggered broader scrutiny of for-profit education that continues today.