These Colleges Deny Students Their Legal Rights

Since the early days of the G.I. Bill, students have fallen victim to schemes designed to take unfair advantage of their eligibility for federal college aid. In recent years, predatory schools had required students to sign away their legal rights—denying justice and delaying public awareness of predatory schools

In 2016, our research found that for-profit schools, when they were taking federal aid, had an explicit strategy of preventing students from going to court over broken promises and demanding silence about any complaints or settlements. Also last year, the Obama Administration largely addressed this problem by adopting rules that essentially banned forced arbitration and similar strategies. The rules were scheduled to go into effect next month. Unfortunately, the U.S. Department of Education is now backing away from these important reforms. Today, the Department of Education announced it is delaying the implementation of the new rules, which will halt any protections to past, current, and future students from predatory schools using restrictive clauses to silence complaints.

We are now calling on all schools to agree not to restrict students’ rights.

There is currently no comprehensive list of colleges that do, or do not, use anti-consumer restrictive clauses in their enrollment contracts. Some states like Illinois and Arizona require institutions to re-submit the contracts they require students to sign each year, while schools in other states may only be required to submit enrollment contracts once, or on a multi-year basis. In our research we were able to analyze contracts from 271 schools, obtained largely from state agencies. We are now calling on all schools to agree not to restrict students’ rights. The list below shows the largest colleges that we found using one or more restrictive clauses, along with any updated policy announced publicly by the school.

The colleges above used one or more of four types of restrictive clauses incorporated into contracts students sign when they enroll:

• Forced arbitration clauses. These provisions require students and former students to file their complaints in a private, binding process to be heard by an “independent” arbitrator, hired by an arbitration association that has a working relationship with the school. Students and former students who have signed these clauses have signed away their rights to go to court to seek a resolution, all before any dispute has ever been recognized.
• Go-it-alone clauses. These provisions prohibit students and former students who have similar complaints as their peers from working together when expressing their complaints (such as through a group or class action). The result of this contractual provision means that each student must file their dispute on an individual basis.
• Gag clauses. These provisions silence students and former students from discussing the details of an ongoing or completed dispute resolution process. While these agreements are common practice in settlements of disputes, they are outliers and raise concerns when they appear in contracts and other documents that colleges require students to sign as a condition of enrollment, before a dispute even arises.
• Internal process requirements. These provisions mandate students and former students to complete the school’s internal process before they can ever raise their complaint in other dispute resolution processes. By prohibiting students from taking their complaints to other forums for resolution without first going through the school’s internal process, schools can draw out grievance processes and stop complaints from ever getting to the public.

Tags: for-profit colleges, predatory colleges, Arbitration, restrictive clauses