Senators: Education Dept Should Cut Off Aid to Colleges That Deny Students Their Day in Court
Source: Huffington Post
"In their letter to Under Secretary of Education Ted Mitchell, the senators note that many for-profit colleges, and almost no non-profit colleges, use enrollment agreements containing mandatory arbitration clauses — fine print provisions that require students to pursue any legal claims against their schools before a private arbitrator, rather than in a courtroom.
The Senators argue that the Higher Education Act’s provisions requiring schools to enter into program participation agreements with the Department can be used to require a ban on mandatory arbitration as a condition for schools receiving federal funds.
“If a for-profit college deceives students about cost, transferability of credits, program quality, job placement, salary after graduation, or other claims,” the Senators wrote to Mitchell, “these students should have the right to hold them accountable.”
Mandatory arbitration requirements tend to favor the corporations that impose them, rather than individual consumers or students, because the parties must often pay high fees to the arbitrator, and arbitrators can have incentives to rule for the corporation in hopes of getting repeat business. These fine print provisions often also bar students from joining class action lawsuits or otherwise combining their claims with other students, thus making it harder to find a lawyer with enough financial incentive to take a case. If wronged students can’t recover from their schools, they may be more likely to seek forgiveness of their federal loans, increasing the burden on taxpayers. To make matters worse, arbitration agreements are conducted behind closed doors, so the public, including other students, don’t learn about any wrongdoing. Denying individuals the option of filing a lawsuit thus reduces the deterrence that encourages corporations to comply with the law and treat individuals fairly."
Read more: http://www.huffingtonpost.com/davidhalperin/senators-education-dept-s_b_9213618.html
Here are some additional resources:
Education Department May Ban Mandatory Arbitration: (Inside Higher Education)
https://www.insidehighered.com/quicktakes/2016/03/14/education-department-may-ban-mandatory-arbitration
Coalition Letter to Dept. of Ed.:
http://www.citizen.org/documents/coalition-letter-to-ED-title-iv-arbitration-mar.4.2016.pdf
Recent petition on Forced Arbitration Issue:
http://www.citizen.org/documents/DeptofEdPetitionSigners_3.16.16.pdf
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