Heald College is facing a lawsuit launched by the federal government along with its parent company, Corinthian Colleges, for predatory lending practices. The school was just one of many in the United States to be closed as part of an agreement with the Department of Education.
The Consumer Protection Bureau sued Health and parent company Corinthian for more than $500 million for students who fell victim to their predatory lending and enrollment practices. They claimed Heald misled its students with overblown job placement figures, starting salary projections, and went so far as to have students put in temporary placements after graduation just long enough to count them as successfully placed for their figures.
Tuition at the school was through the room and came in at $75,000 for a bachelor’s degree. Students at the school unknowingly signed up for high interest loans with 15% interest which is double that of federal student loans and other lenders. The loans were so difficult to pay that over 60% of Heald students were in default status on their loans within three years. Students were told not to worry about their loan amounts as soon they would be successfully placed in jobs with lucrative salaries. To top it off, the school forced students to make loan payments on these amounts while they were still in their study period. Students were forced to try to attend school full time and keep full time jobs in order to make their payments. Other loan programs like federal student loans only require students to begin making payments a full six months after they’ve finished their degrees to allow they time to stabilize and find full time work in their new fields.
An independent monitor was assigned to Corinthian and its schools after investigators were made aware of these lending practices. Regulations put into effect under the Obama administration have attempted to further regulate and dissuade for-profit schools from putting students in these positions. Schools found trying to circumvent these regulations find themselves in the hot seat and have their access to federal student loan payments removed. Many such schools still find ways around government policies leaving students at risk.
Corinthian was then forced to close over 85 campuses including many at Heald College, WyoTech, and Everest College leaving 74,000 students affected. Early in April of 2015, the government fined Corinthian $30 million and forced remaining campuses by Corinthian to close. The schools were working with graduating students to get them their diplomas and transcripts and the government is working with them and other schools for those who are left in the middle of their course of study. These students must be placed in other colleges and universities as part of the current regulations in place which protect students from being left unable to complete their degrees. These regulations are intended to prevent for-profit schools from being able to take malicious advantage of various federal financial aid, from high risk private student loans, and from obtaining worthless education they are unable to find employment with after their degrees.
If you have questions or comments, please chat in the comments below or on the ChallengeStudentDebt Twitter handle.
If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, take the free challenge debt review to find out what options you have regarding your student loans.