Here's what's in store for the 40,000 students left without a school now that ITT Tech has closed

ITT Technical Educational Services Inc. abruptly announced on Tuesday that it will cease operations at all campuses.

The college's closure, which affects 40,000 students and 8,000 employees, is one of the largest in US history.

The Department of Education held a press conference to discuss next steps for affected students, urging them to consider the two options currently available: discharge their federal loans or transfer to another school.

Current students and those actively enrolled in past 120 days who made the decision to leave are eligible to have 100% of their federal loans discharged. These students are also free to start their programs of study at another school but can't use credits from ITT Tech if they want a full discharge of their loans.

If students decide to fully discharge, however, they'd essentially need to start their postsecondary education over from scratch, a particularly unattractive choice for students close to graduating. Transferring, however, is no easy task, especially if students are looking for a quality school.

Under Secretary of Education Ted Mitchell directed students to call their loan servicers to start the process of a loan discharge and to visit studentaid.gov/ITT - a website specifically dedicated to assisting ITT Tech students through the discharge process - or call 1-800-433-3243.

Alternately, students who want to continue their education and current programs of study should look to see where their credits may transfer. Mitchell indicated that the ED was working to have community colleges around ITT Tech campuses reach out to students.

If the transferring school accepts the ITT Tech credits, the student is no longer eligible for a full federal student loan discharge.

As is the case for any students, the department also said it would accept claims under a "borrower defense to repayment" on an individual basis. Under the law, that claim provides loan forgiveness to students if their school committed fraud or broke laws.

Secretary Mitchell noted that the department estimated about $500 million in federal loan discharge money if every student sought a closed school discharge. ITT Tech has posted about $90 million of that cost to the ED, which will defray the additional amount that taxpayer money will cover.

The announcement that ITT Tech will close comes a week and a half after the department imposed sanctions on ITT Education Services that banned the school from enrolling students who use federal financial aid and required ITT post a $153 million letter of credit on top of the $94 million reserve requirements it must already meet.

Shortly after, ITT announced it wouldn't accept new enrollments at all. The department's sanctions struck such a blow to ITT Tech because, like most for-profit colleges, it's highly dependent on federal aid.

The department's move to sanction ITT "was the right decision," Mitchell said at the press conference. "It's important to remember that when we took our action we took it in the face of growing evidence that ITT was a risk to students and taxpayers," he continued.