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WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Representative Maxine Waters (D-CA-43) today reintroduced bicameral legislation designed to strengthen students’ ability to hold colleges at for profit accountable to the courts for their misconduct. The Law on Legal Access to Courts and Student Support (CLASS) would strengthen the accountability of for-profit colleges and protect taxpayer dollars by prohibiting a higher education institution from receiving federal Title IV student aid funding if the school’s enrollment agreement requires a compulsory arbitration or otherwise restrict the ability of students to bring claims against the school in court.
The bill would also ensure that the Federal Arbitration Law, which governs the execution of arbitration proceedings, would not apply to student enrollment agreements. Since legitimate nonprofit colleges and universities do not include mandatory arbitration clauses in their enrollment agreements, this legislation squarely focuses on schools that might seek to take advantage of their students while hiding from it. liability in court.
“Using enrollment agreements to force students to give up their legal rights is a dirty trick long used by the for-profit college industry to evade liability at the expense of the students they defraud. ” said Durbin. “Students need to be able to hold for-profit colleges directly accountable in court. Today’s bill shows the Department of Education has strong congressional support to craft an administrative ban on these shady for-profit academic practices through its current rules. Hope they will use it.
“Any student who has been the victim of fraud by a school and finds themselves with insurmountable student debt should be allowed to directly hold that school to account in court. ” said MP Waters, chair of the financial services committee. “This law will ensure that students retain the right to sue any school that defrauds them by ending the use of mandatory arbitration clauses in enrollment agreements used by federally funded schools. As we have seen with Corinthian colleges and many others, the for-profit college industry is full of bad actors who lure potential students into some of the more expensive university programs, while knowingly and fraudulently distorting the quality and the success of these programs. These schools then use mandatory arbitration clauses and other tactics that prevent students from suing them, thus protecting themselves from being held accountable for any wrongdoing. I am proud to present the CLASS law, which will take bold steps to eliminate this type of clause and give students the right to their day in court.
Earlier this month, Durbin led his colleagues to urge the Education Department – through its current rules – to reinstate and expand the ban on compulsory arbitration upon registration. Obama’s 2016 Borrower Defense Rule instituted a ban that was overturned by DeVos Borrower Defense Rule.
In the Senate, Senators Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), Ed Markey (D- MA) and Jack Reed (D-RI) are co-sponsors of today’s Bill.
The bill is also supported by the American Association for Justice, Americans for Financial Reform, Center for Justice & Democracy, Center for Responsible Lending, Consumer Action, Consumers for Auto Reliability and Safety, Earthjustice, Googlers for Ending Forced Arbitration, The Institute for College Access and Success, Public Citizen, Public Justice, National Consumer Law Center (on behalf of its low-income clients), National Association for College Admission Counseling, National Association of Consumer Advocates, National Employment Lawyers Association, United States Public Interest Research Group , Veterans Education Success, Woodstock Institute and Young Invincibles.
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