Durbin, Waters Introduce CLASS Act to Give Student Defrauded by For-Profit Colleges Their Day in Court

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 for-profit colleges accountable in court for their misconduct.  The Court Legal Access and Student Support (CLASS) Act would enhance accountability for for-profit colleges and safeguard taxpayer dollars by prohibiting an institution of higher education from receiving Title IV federal student aid if the school’s enrollment agreement requires mandatory arbitration or otherwise restricts students’ ability to pursue claims against the school in court.

The bill also would ensure that the Federal Arbitration Act, which governs the enforcement of arbitration proceedings, would not apply to student enrollment agreements. Because legitimate non-profit colleges and universities do not include mandatory arbitration clauses in their enrollment agreements, this legislation is squarely focused on those schools that might seek to profit off students while hiding from accountability incourt.

“Using the small print in student enrollment agreements to force students to give up their rights to go to court is a dirty trick long used by the for-profit college industry to evade accountability at the expense of the students they defraud,” said Durbin.  “Students must be able to directly hold for-profit colleges accountable in court, or these predatory schools should not be allowed to rake in taxpayer dollars.  That’s why I’m reintroducing the CLASS Act with Congresswoman Waters, which would end the for-profit college industry’s use of this shady practice.”

“The for-profit college industry often uses mandatory arbitration clauses to avoid accountability for defrauding vulnerable students and leaving them with insurmountable debt. Today, along with Senator Durbin, I am proud to introduce the CLASS Act, which will give students a fair chance at recouping their losses in court and not under mandatory arbitration proceedings that typically favor the powerful,” said Waters.

In the Senate, U.S. Senators Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), Cory Booker (D-NJ), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), Ed Markey (D-MA), Jack Reed (D-RI), and John Fetterman (D-PA) are cosponsors of today’s bill.

The bill is also supported by American Association for Justice; Americans for Financial Reform; Center for Democracy and Justice; Consumer Action; Earthjustice; National Association for College Admission Counseling; National Association of Consumer Advocates; National Consumer Law Center (on behalf of its low-income clients); National Consumers League; Public Citizen; Public Justice; The Institute for College Access and Success; The National Employment Lawyers Association; United States Public Interest Research Group; Veterans Education Success; and Woodstock, Institute.