California tells for-profit chain to stop enrolling veterans

The California Department of Veterans Affairs is ordering a for-profit college company with 15 campuses in the state to stop enrolling new or returning students who plan to fund their educations with GI Bill benefits.

An agency within the department that sanctions training programs to serve veterans issued a suspension notice on Friday to ITT Educational Services, which operates schools in 39 states under the names ITT Technical Institute and Daniel Webster College.

The Security and Exchange Commission filed a fraud complaint against the Indiana-based company this week over an alleged scheme to cover up losses from student loans ITT had guaranteed to its investors.

Department of Veterans Affairs spokesman Paul Sullivan says about 1,400 California veterans are attending ITT schools on the GI Bill.

ITT did not immediately respond to a request for comment.