On April 14, the U.S. Department of Education informed Corinthian that it intended to fine the for-profit education company's Heald College subsidiary $29.66 million for misrepresenting its placement rates to current and prospective students and to its accreditors, and for failing to complete with federal regulations requiring the complete and accurate disclosure of its placement rates. Heald is a 13-campus subsidiary with schools primarily in California and other western states.
As noted by Inside Higher Ed, the regulation used to punish Corinthian and Heald is a a job-placement requirement adopted in 2010 that "has emerged as a possible tool to crack down on for-profits." The regulation requires colleges to disclose job-placement rates of graduates in programs that fall under "gainful employment."
With respect to Heald's violations of the accurate job-placement reporting requirements, the Education Department's findings were devastating.
The Huffington Post reported that the government had found that Heald’s "inaccurate job placement rates constituted a 'substantial misrepresentation,' a finding that allows the department to prohibit the school from accessing federal student aid such as Pell grants and loans that students would use to pay for tuition."
"For example, Heald allegedly misled prospective students by advertising false job placement rates that omitted the fact that many of its graduates simply weren’t counted. It also told prospective students that it confirmed graduates’ employment with the graduate or her employer. In reality, the Education Department said, the school in many cases simply relied on its own career services staff for confirmation."
"Heald also paid staffing agencies to hire its graduates, the Education Department said, and counted them as officially employed in their field. In one case, the department found a Heald graduate who only was employed for two days moving computers and organizing cables."