ITT Educational's (ESI) Daniel Webster College Receives Letter from NEASC Regarding Standards
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ITT Educational Services (NYSE: ESI) disclosed the following in a U.S. SEC filing on Friday:
Item 7.01. Regulation FD Disclosure.
On September 1, 2016, Daniel Webster College (“DWC”), a postsecondary institution operated by ITT Educational Services, Inc. (the “Company”), received a letter (the “NEASC Letter”) from DWC’s accrediting commission, the Commission on Institutions of Higher Education of the New England Association of Schools and Colleges (“NEASC”). The NEASC letter informs DWC that NEASC has reason to believe that DWC may not meet NEASC standards on Organization and Governance and Institutional Resources. As a result, DWC must attend NEASC’s September 22, 2016 meeting to show cause why DWC’s accreditation should not be withdrawn. As part of this process, NEASC has required DWC to submit a show-cause report by September 14, 2016, and specifies the information required to be included in the report.
The NEASC letter states NEASC has reason to believe that DWC may no longer meet the specified standards because of the extraordinary demands made by the U.S. Department of Education (the “ED”) of the Company, as outlined in the August 25, 2016 letter from the ED to the Company (the “ED Letter”) as described further in a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on August 26, 2016. The NEASC Letter acknowledges that the ED Letter was clear that the Title IV restriction for newly enrolled students does not apply to students at DWC, but that NEASC’s Executive Committee is concerned that if the Company cannot meet the ED’s requirements for surety, or is otherwise destabilized by not being able to award Title IV funds to new students, the result may put the finances and the continuation of DWC at risk.
DWC plans to comply with the NEASC request for a show-cause report and believes that it has met the NEASC accreditation standards.
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