The California Student Aid Commission has halted funding for Heald College after the for-profit chain failed to provide required documents demonstrating that it is financially stable.
The decision affects 4,497 students at Heald’s 10 campuses in Northern California and the Central Valley who receive Cal Grant scholarship awards, according to commission spokeswoman Patti Colston. About $1 million in payments submitted last week by Heald were suspended, and as much as $14 million in Cal Grant awards reserved through the end of June could ultimately be affected.
Colston said the student aid commission requested Heald’s audited financial statements on Jan. 22 and was told on Feb. 5 that the school could not provide them. Colleges that receive financial aid from California must submit an audit every four years demonstrating their financial and administrative stability.
The commission has put Heald on “at-risk reimbursement status,” Colston said, and will decide how to proceed with the college during a public hearing scheduled for next Friday.
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Corinthian Colleges, Heald’s parent company, has been under severe financial distress since last summer when the federal government held back financial aid payments amid concerns that the company was falsifying student job placement figures. It is now in the process of selling off Heald College, which operates campuses in Rancho Cordova and Roseville, and its other schools.
In a statement, Corinthian said it was “surprised and disappointed by CSAC’s actions” and intended to “vigorously oppose” the decision.
The company added that it had acquired a new independent accountant at the end of January, and that the suspension of financial aid payments could undermine efforts to sell Heald and “provide a smooth transition for Heald’s students, faculty and staff.”
Call The Bee’s Alexei Koseff, (916) 321-5236. Follow him on Twitter @akoseff.