The decision is a victory for the Trump administration's efforts to pressure schools to abandon affirmative action policies still allowed by the Supreme Court.
Supporters say it was wrong to force local schools to allow transgender students to choose which bathroom to use. Critics say rescinding that policy empowers those who harass transgender kids.
President-elect Trump's pick for education secretary faced tough questions during her Senate confirmation hearing. She maintained her strong support for school choice and free-market solutions.
The shutdown affects some 35,000 students and more than 8,000 employees in 38 states. ITT Technical Institutes blamed the Education Department, which recently imposed financial sanctions.
The draft plan indicates that such factors as access, affordability and student outcomes will be key to the system first announced by President Obama in 2013.
One of Florida's largest community colleges is trying to reduce the amount of debt its students take on. As part of a federal experiment, it has barred them from taking out any unsubsidized loans.