College operator faces $30M fine over job placement claims
Los Angeles — – U.S. Department of Education dealt a $30 million fine last week to Santa Ana-based Corinthian Colleges Inc., a for-profit college operator that has been on the brink of collapse following a federal crackdown last year.
The Education Department said Corinthian misrepresented job placement rates to students in its Heald College system, which operates campuses in California, Hawaii and Oregon. Placement rates often play a key role in marketing and recruiting efforts, a benchmark that indicates the value of a degree in the marketplace.
The department found 947 cases of misstated placement rates, including instances where Heald College paid companies to create temporary positions for graduates to count them as “placed.” Some of the positions lasted as short as two days, according to the agency.
“Instead of providing clear and accurate information to help students choose which college to attend, Corinthian violated students’ and taxpayers’ trust,” U.S. Undersecretary of Education Ted Mitchell said in a statement. “Their substantial misrepresentations evidence a blatant disregard not just for professional standards, but for students’ futures.”
Heald College is no longer allowed to enroll students, and the Department said Corinthian must prepare to help current students finish their education or complete it elsewhere. Corinthian has 14 days to respond to the department’s letter outlining the fine.
A Corinthian spokesman, Joe Hixson, said in a statement that the company found out only last Monday about the allegations, which he called “highly questionable” and “unsubstantiated.”
“These unfounded, punitive actions do nothing to advance quality education in California,” the statement read, “but would certainly shatter the dreams and aspirations of Heald students and the careers of its employees.”
Corinthian, once one of the nation’s largest for-profit college operators, has been in the department’s sights since last year. In June, the Education Department said it was restricting federal student aid to Corinthian amid concerns the company had been falsifying job placement rates.
Faced with the prospect of losing the vast majority of its funding, Corinthian agreed to sell off or wind down operations at its schools. The company sold off the majority of its schools to a nonprofit student loan servicer in November, but its California schools — including Heald — are still owned by the company.