Dive Brief:

• The U.S. Department of Education has announced new restrictions on ITT Tech’s access to federal student aid dollars.
• The Chronicle of Higher Education reports the for-profit career college chain will only be able to disburse federal student loans and grants after the start of an academic term, once it has confirmed student aid eligibility and provided written proof of it to the department.
• ITT Tech leaders have said they do not expect the additional demands from the department to negatively affect cash flow or create a significant delay on financial aid disbursement for students.

Dive Insight:

The Securities and Exchange Commission charged ITT Tech with fraud in May, along with its CEO and CFO. Compared to the restrictions placed on Corinthian Colleges before its ultimate collapse, the new requirements of ITT Tech are less severe, creating less of a danger they will directly cause the chain to close schools.

Illinois Sen. Dick Durbin has called on the department to go even further. He says the its conclusion that the company is financially irresponsible is enough to stop financial aid eligibility altogether. Investigations into fraudulent activity are not the same as convictions, however, and with settlements allowing institutions to claim no wrongdoing, the department has been hesitant to cut off funding entirely.