Published: March 2016

Dept. of Education should protect students–not the schools that bully them

The for-profit college industry should not be able to profit from federal tax dollars while defrauding its students and escaping liability by hampering the exercise of students’ legal rights through forced arbitration clauses. The coalition expressed serious concern about the impact of forced arbitration proceedings—including the secrecy surrounding them—on the department’s ability to identify and address fraud. Private arbitration shields critical information from public view and regulators and allows for-profit schools like Corinthian College to escape accountability for years.

In a letter to the Department of Education coalition advocates demand the agency issue a rule barring educational institutions from including pre-dispute arbitration clauses in enrollment or other agreements with students, as a condition of receiving Title IV assistance, which includes Stafford, PLUS and Perkins loans as well as Pell grants.

Few students are aware that these clauses are in their contracts or that the clauses preclude them from going to court or joining with other students in class-action suits to address misconduct by their schools. Even when they do know, many students feel compelled to sign, because refusing means forgoing the education they hope to receive.

The Department of Education continues to send federal student loan money to schools that rob students of the right to sue in court if their schools break the law–this practice needs to end immediately.

Lead Organization

Public Citizen

Other Organizations

Alliance for Justice | American Association for Justice | American Association of State Colleges and Universities | Americans for Financial Reform | Center for Justice & Democracy | Center for Responsible Lending | Consumer Action | Consumer Federation of American | Consumer Federation of California | Consumers Union | Demos | The Education Trust | Empire Justice Center | Generation Progress | Higher Ed, Not Debt | Home Owners for Better Building | Homeowners Against Deficient Dwellings | Housing and Economic Rights Advocates | Initiative to Protect Student Veterans | The Institute for College Access & Success | The Leadership Conference on Civil and Human Rights | League of United Latin American Citizens | Mississippi Center for Justice | NAACP | Project on Predatory Student Lending of the Legal Services Center of Harvard Law School Public Good Law Center | Public Counsel | Public Justice | Public Law Center | Robert Shireman, Senior Fellow, The Century Foundation | Student Debt Crisis | Student Veterans of America | University of San Diego School of Law Veterans Legal Clinic | Veterans Education Success | Veterans for Common Sense | Veterans' Student Loan Relief Fund | VetJobs | Woodstock Institute | Young Invincibles

More Information

To read the entire letter in full, please click here.

For more information, please visit Public Citizen's website.

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