Federal Government Hits Corinthian Colleges With Enormous Fine

Federal Government Hits Corinthian Colleges With Enormous Fine
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    For-profit colleges and universities remain under the watchful eye of the U.S. Department of Education, a federal entity established in 1979 under President Jimmy Carter.


This cabinet-level department of the federal government has found that Corinthian Colleges misrepresented job placement rates to current and prospective students of Corinthian’s Heald College system. As such, the ED has levied a fine of $29.6 million against the school.

Heald College

The ED found that Heald College inaccurately or incompletely disclosed information to students by overstating the employment outlook for 947 people. The department found that the information may have led these students to enroll in Heald College programs with the expectation of finding jobs related to their career path. The same information Heald provided to prospective and enrolled students was offered to the ED and its accreditors as well.

Besides the enormous fine, the ED announced that it had told Corinthian that it will deny the school’s pending applications to continue to engage in its federal student aid programs in two of its locations. Those venues are in Stockton and Heald Salinas, both in California.

The department’s penalty also shuts down Heald College. Specifically, the school may not enroll students and must help its current students finish their education or transfer to another college.

Predatory Colleges

The Obama Administration has called programs such as those managed by for-profit Corinthian Colleges “predatory” and has been cracking down on those that have misrepresented what they do. Not all for-profits institutions are affected, but the administration’s initiative has sent a warning shot out to all such schools to avoid practices that are misleading.

“This should be a wake-up call for consumers across the country about the abuses that can exist within the for-profit college sector,” U.S. Secretary of Education Arne Duncan said of the Department’s enforcement action against Corinthian. “We will continue to hold the career college industry accountable and demand reform for the good of students and taxpayers. And we will need Congress to join us in that effort.”

Under Secretary Ted Mitchell added that such schools, particularly Corinthian College, “violated students’ and taxpayers’ trust.” He called that “substantial misrepresentation” a “blatant disregard” for student futures and professional standards, and said that the ED’s move is holding them accountable.

Heald College’s practices reveal a pattern of deceit that included a number of measures the ED found unacceptable. For instance, the college worked with temporary agencies to hire its graduates to work temporary jobs on its own campuses. The school then counted these graduates as “placed” in employment. The school also counted jobs that some students held while still in school or were obtained after graduation, but had nothing to do with their career path.

“We have kept students at the heart of every decision we have made about Corinthian, and we will continue to do so as we move forward,” Under Secretary Mitchell said. “When our borrowers bring claims to us that their school committed fraud or other violations of state law against them, we will give them the relief that they are entitled to under federal law and regulations.”

Closing Corinthian Colleges

Ultimately, the ED plans to wind down Corinthian Colleges, which also owns WyoTech and Everest campuses scattered across the United States. Formed in 1995, the school is a publicly traded institution on NASDAQ.

See Also — Corinthian Colleges Hatches Deal With US to Stay Open


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