In April, ITT's accrediting agency said ITT Technical Institute hadn't shown itself to be in compliance with all its standards.
Last week, the Department of Education announced it was no longer allowing ITT to enroll students receiving financial aid. This week ITT announced it would be shutting down, saying, "The actions of and sanctions from the U.S. Department of Education have forced us to cease operations ... and we will not be offering our September quarter."
Students in a bind
Anthony Carrube, a 30-year-old former Coast Guard petty officer was one semester short of graduating from ITT Tech with an associate's degree in computer networking when he got the news.
He's worried about whether any schools will take his 12 credit hours for his classes which he took three nights a week at ITT's location in Wilmington, Massachusetts. Classes were on the second floor of a rented office building in converted meeting rooms. He paid for them using the GI Bill.
"It was stuff you could have done by yourself at home," he said of the classroom experience. "You go to class, bring your books, and they tell you to do your work out of the books."
Teachers, he said, were largely there to "babysit" and answer the occasional question. Sometimes the classes were "overbooked," he said, and there would be a second class of 30 students and their teacher sharing the same space.
"I'm scrambling to find something to do with these credits," Carrube told NBC News by phone. "I don't want to waste two years of school."
The Department of Education published a blog post detailing options for former ITT Tech students and a landing page at studentaid.gov/ITT for forthcoming information.
"The school's decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk," it read. "One possible outcome of oversight actions is that a school may choose to close rather than take corrective actions, which can cause disruption and disappointment for current students."
The post outlined the two options students have: Apply for a discharge and possibly get some of your money back, or transfer your credits to another "comparable" school.
A tough lesson
But there's a catch.
If you transfer your credits, you're not eligible for a discharge. And it's not clear how many credits a reputable school will accept, if any.
Advocates say students should just try to cash out and start over or otherwise move on with their lives.
"It's best for folks to cut their losses," Alexis Goldstein, a senior policy analyst at Americans for Financial Reform, told NBC News in a phone interview. She said students have had a lot of problems getting good schools to accept ITT credits.
"Get that debt canceled and get that weight lifted," said Goldstein. "Otherwise you might not be able to transfer that many credits — and still have to pay tens of thousands of dollars in loans to a school that no longer exists."
A selection of a blank student loan discharge form.
Source: Department of Education