U.S. Senator Dick Durbin

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. 

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“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. 

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