Corinthian’s Heald College Fined $30 Million Over Job Placement Claims


For-profit Corinthian Colleges has been fined $30 million by the US Department of Education for falsifying job placement rates of their graduates.

The fine only applies to the Heald College system, which has 12 locations in California, Hawaii and Oregon.

The department found that the San Francisco-based company inflated employment numbers for their graduates to both prospective students as well as to the federal government.

“Instead of providing clear and accurate information to help students choose which college to attend, Corinthian violated students’ and taxpayers’ trust,” said DOE Under Secretary Ted Mitchell in a statement.  “Their substantial misrepresentations evidence a blatant disregard not just for professional standards, but for students’ futures.”

According to an investigation, temp agencies were paid by Heald College to hire its graduates to work on its own campuses for as little as two days in order to be able to write that those students were employed.  While this was going on, the Department of Education argues that Heald did not release information showing that placement rates included these students.

In addition, the department said the company was inaccurately accounting for graduates who they said had found a job in their field of study, reports Tamar Lewin for The New York Times.  One example saw a 2011 accounting graduate counted as “employed in the field” due to a food service job she held at Taco Bell.  The college also considered business administration graduates in the numbers who were found positions in retail jobs at Safeway and Macy’s.

The department found a total of 947 cases of falsified placement at the Heald schools, reports Chris Kirkham for The LA Times.

Supporters say the findings show the need to hold for-profit schools accountable for such misrepresentations.

“Placement rates are a critical indicator of whether a career education program is actually doing what it’s supposed to,” said Lauren Asher, president of the Institute for College Access & Success, an Oakland nonprofit that focuses on student debt issues. “For a program to inflate its job placement rates means they’re selling students a bill of goods.”

Meanwhile, a spokeswoman for Corinthian referred to the allegations as “highly questionable” and “unsubstantiated.”  He went on to say that the company was not given an appropriate length of time to respond to the allegations and that the company plans to appeal the decision.

“Heald has a well-documented track record of providing quality education and significant value to its students for more than 150 years—and should be allowed to continue to do so,” he said.

Purchased by Corinthian in 2010, the college currently enrolls 9,000 students and employs 1,000 faculty and staff.

The for-profit colleges once boasted over 100 locations across the country, but the government has forced the closure or sale of those locations after receiving allegations of high-interest loans and falsified information.  While most of the campuses have been sold to the nonprofit Zenith Education Group, that sale did not include Heald.