The U.S. Education Department has placed financial restrictions on ITT Educational Services Inc., citing the company’s failure to submit financial statements by a mandatory deadline, reported by The Chronicle of Higher Education’s The Ticker reports.
The for-profit education provider disclosed in a filing with the Securities and Exchange Commission on Thursday that the department had put it on “heightened cash monitoring” status, which restricts how it can receive student-aid funds. ITT warned investors in July that it might face financial restrictions over its failure to turn in a series of financial statements and audits from last year by a June 30 deadline.
The monitoring, referred to as HCM, is the same type of restriction that helped precipitate the dissolution of Corinthian Colleges Inc. this year. But in that case, the department imposed an additional restriction: a 21-day waiting period before Corinthian could gain access to financial-aid funds. The company responded at the time that it didn’t have enough cash to stay afloat during those three weeks.
ITT, which isn’t subject to such a waiting period, said financial-aid disbursements would not be affected. Its filing said the company had “implemented procedures to address the HCM requirements, and believes that compliance with those requirements will not impact the timing of its receipt of Title IV Program funds by more than one business day.”