Dive Brief:

• California has banned ITT from accepting new students at 15 campuses across the state, following the U.S. Department of Education's decision last week to prohibit the school from accepting students who require financial aid to finance their education. 
• The for-profit mainstay has to pay $152 million to cover potential claims from students who can prove that they were misled by the school's marketing efforts, in the event that the school formally closes. 
• ITT enrolled more than 450,000 students last year and grossed more than $850 million in revenue. 

Dive Insight:

ITT's downfall, and the pending collapse of most of the for-profit college industry, was not so much that it defrauded students or provided less-than-rigorous education to its students; it is that the marketplace refused to acknowledge the degrees and credentials as legitimate beyond a few industries. This is a factor that should draw more focus from college executives, who maintain programs which produce many graduates, but are not connecting those graduates to strong outcomes of graduate school admission or entry-level jobs. 

With this precedent, nothing prevents the federal government from other dramatic steps, such as refusing financial aid to programs which don't have professional accreditation, or which have low passage rates on professional licensing examinations, like nursing or law. When you consider this with the economic struggles of many cities surrounding colleges, particularly in the south, the feds' task of dramatically reducing federal aid disbursements appears to be getting easier by the day.