College students aren’t generally known for their reticence, but some schools have found an efficient way to hush them up, by forcing them to sign along a dotted line.
New research by The Century Foundation (TCF) and Public Citizen reveals that for-profit schools have used deceptive enrollment contracts to erect a legal firewall, perhaps completely unbeknownst to the student, to preempt access to justice. According to TCF’s research, among higher-education institutions, these clauses are almost exclusively used by for-profit educational institutions.
College-enrollment contracts should, in theory, outline students’ rights and responsibilities, but the main purpose behind the restrictive clauses has nothing to do with education, it’s simply “protecting the financial interests of the school by limiting a student’s legal rights, should something go wrong.” And it has often gone awfully wrong. Massive private college chains like the now-bankrupt Corinthian have become notorious nationwide for operating as fly-by-night scams, delivering subpar courses or incompetent programming.
In one instance reported in The New York Times, a group of former students of Lamson College in Illinois went through the painstaking process of preparing a legal case against their institution for cheating them and failing to fulfill its academic obligations, only to realize too late that an obscure restrictive clause that prevented class-action lawsuits meant their case would never make it into court. Many contracts impose such “go it alone” clauses, TCF says, to preempt individuals who share grievances from banding together to sue on behalf of a larger group of victims. Preventing collective legal action presents a potentially devastating barrier for former students of the large for-profit school groups with many campuses nationwide, all with similarly shady financial schemes. (Federal rule changes recently proposed by the Consumer Financial Protection Bureau might amend arbitration procedures to allow financial consumers to file lawsuits in some cases, but would specifically exclude for-profit colleges.)
On top of blockading full-fledged lawsuits, contracts often impose a binding arbitration process through so-called “internal process requirements.” These quasi-legal proceedings are often heavily skewed in favor of the corporation, yet corporations often bill arbitration as a supposedly efficient way to resolve a dispute. In reality, argues TCF researcher Tariq Habash, although “these schools are forcing students into this ‘faster, cheaper process,’ they are requiring them to go through mandatory internal processes that can take months to complete, making it anything but expedited.”