"I didn't know the Academy had a place like this here."
"It's supposedly a graveyard for Disciples who don't have a hometown to be sent to."
"It's sad they don't have a place to return to..."
"My Hometown was destroyed by a Nest. If I die, I'll be buried here too."
-Chlotz and Wake at the Hero's Graveyard.
The Hero's Graveyard, more commonly known as 'Hero's Grave', is a resting place for dead students, and later on, it is the home to the deceased Star Children that were unstable from Classmanting. It serves a similar purpose and appearance to a Morgue.
During the events of Chapter 1, Chlotz and God's Gift come across the Hero's graveyard. In this event, the player learns of the protagonists past and his reason for hating Dusk Spawners.
In later Chapters, the Hero's Graveyard is where a Standard Disciple is illegally selling the drug Trigger to other students in the Academy.