Carmel-based ITT Educational Services Inc. says it will officially "cease all operations" Friday. The announcement follows the company’s closure of all of its campuses nationwide, affecting more than 8,000 employees and approximately 40,000 students.
In a document filed with the U.S. Securities and Exchange Commission, ITT says its senior secured lender has declared the company in default and must immediately repay its outstanding loan, totaling $34.5 million. Per its agreement with the lender, ITT says "the lender was exercising its control over the Company’s bank accounts and instructed the financial institutions to transfer all of the Company’s cash balances to accounts controlled by the lender."
ITT says the default was the result of the U.S. Department of Education’s requirement that the company increase the size of its surety by more than $150 million. "The cumulative effects of the events over the last several weeks have led the Company to plan to cease all operations as of September 16, 2016," the company said in the document.
ITT’s closure affected more than 1,000 students and 662 employees in Indiana. On Wednesday, Indiana higher education officials said they are working to assist those affected by the closure.