Durbin Calls on Department of Education to Stand Up for Students by Banning Mandatory Arbitration Clauses

[WASHINGTON, D.C.] – U.S. Senator Dick Durbin (D-IL) today took to the floor of the Senate to call on the Department of Education to ban mandatory arbitration clauses from higher education enrollment contracts.  Mandatory arbitration clauses are a hallmark of the for-profit college industry – used by nearly all the major companies including DeVry, University of Phoenix, and ITT Tech.  The clauses were also used by Corinthian Colleges, Inc., a bankrupt for-profit college system which, for years, lied to students and the federal government about job placement rates and other data.  In a call earlier today, Durbin relayed the need to ban mandatory arbitration clauses to Cecilia Munoz, the Director of the White House Domestic Policy Council.

Video of Durbin’s remarks can be accessed at the following link: https://www.youtube.com/watch?v=6TbFkmZTybU&feature=youtu.be.

“Mandatory arbitration clauses are not used by legitimate nonprofit colleges and universities – both public and private,” said Durbin.  “Countless veterans groups, consumer advocates, legal aid lawyers and student organizations support a full ban on these clauses.  I hope the Department of Education has the resolve and the political will to support that position.  It’s sad when students end up with a good diploma and a ton of debt.  It’s unforgivable for us to stand by while students are misled into worthless diplomas, a ton of debt and no recourse.”

The Department of Education is working on new federal regulations to provide students with relief when a school engages in unfair, deceptive, or abusive conduct.  The Department had set up a negotiated rulemaking session, but because the negotiations with outside stakeholders did not reach consensus, the Department will now draft a rule that is expected to be released for public comment by June.  The consideration of mandatory arbitration clauses was part of the negotiated rulemaking session.