Heald College Fined For Misleading Students About Job Prospects

Heald College, the jewel of a once-thriving chain of for-profit colleges owned by Corinthian Colleges Inc., misled students and accreditation agencies about graduates’ employment rates and showed a “blatant disregard” for the federal student loan program, the U.S. Department of Education alleged Tuesday.

The Education Department said it had found 947 false job placement rates dating back to at least 2010, and slapped Heald with a $29.7 million fine and a ban on enrolling new students. Heald must prepare plans for its thousands of students -- enrolled in health care, business, technology and legal programs across its online school and 12 campuses in California, Hawaii and Oregon -- to either graduate or transfer to a new school.

The finding, an effective death knell for Heald, bolsters claims by current and former students to get their federal student loans forgiven on the grounds that the false job placement rates led them to enroll. A spate of lawsuits last year by several state attorneys general and the Consumer Financial Protection Bureau alleged that Corinthian’s schools systematically misrepresented their job placement and graduation rates.

“Current and prospective graduates of Heald could reasonably have been expected to rely to their detriment upon the information in Heald's placement rate disclosures,” the Education Department said.

The Education Department's move is perhaps the Obama administration’s toughest action against a large for-profit college alleged to have cheated students.