Students have been deceived about cost, transferability of credits, and odds of obtaining a job after graduation cannot sue the school due to past Supreme Court decisions. Recently, nine U.S. Senators asked “If a for-profit college deceives students about cost, transferability of credits, program quality, job placement, salary after graduation, or other claims, these students should have the right to hold them accountable.  We ask that you use your authority under the Higher Education Act to ensure that this is the case.”

The Higher Education Act is the federal law that governs the administration of federal student aid programs. The nine U.S. Senators fight for students rights in which they denied federal funding to colleges and universities that included forced arbitration clauses or any other court access in this student enrollment agreements.

“The vast majority of non-profit institutions of higher education do not include forced arbitration clauses or other barriers to court access in their enrollment agreements,” the Senators wrote. “These non-profit schools do not hide from accountability to their students.  For-profit colleges that benefit from taxpayers dollars must also be accountable to their students.  If a for-profit college deceives students about cost, transferability of credits, program quality, job placement, salary after graduation, or other claims, these students should have the right to hold them accountable.”

Evidence has shown that 27 percent enrollment agreements produced to the committee by for-profit education companies, 21 percent contained a clause that required students to go through a process of mandatory binding arbitration. Forced arbitration not only hurts the student but also prompts them to seek relief from the Department of Education through taxpayers.

In detail, the letter the Senators asked to deny federal Title IV funding to institutions that include forced arbitration clauses. The Higher Education Act’s program participation agreement provisions could be used to require a ban on forced arbitration as a condition for accessing federal funds.  Department of Education regulations states that an institution of higher education may participate in a Title IV program “only if the institution enters into a written program participation agreement with the Secretary, in a form approved by the Secretary.”

Senators Deny Federal Funding

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