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Durbin, Brown, Franken & Blumenthal urge for-profit college to follow lead of DeVry and the University of Phoenix who have abandoned the unfair practice

[WASHINGTON, D.C.] – U.S. Senators Dick Durbin (D-IL), Sherrod Brown (D-OH), Al Franken (D-MN) and Richard Blumenthal (D-CT) today called on ITT Educational Services, Inc. (ITT Tech) to follow the lead of the University of Phoenix and DeVry and halt the use of mandatory arbitration clauses in college enrollment agreements. 

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In a letter to the CEO, the Senators wrote:

“ITT Tech, under your leadership, has long been an advocate in the for-profit college industry for the continued use of mandatory arbitration clauses.  In light of the actions by University of Phoenix and DeVry, the spotlight is now on ITT Tech and the burden is now on you to explain to your students why ITT Tech continues to deny them their day in court when your fellow institutions have chosen a different path.”

The four Senators were also joined by U.S. Senator Elizabeth Warren (D-MA) in calling on the Secretary of Education to ban the use of mandatory arbitration in college enrollment agreements.  In a letter, the Senators wrote:

“Given the broad opposition amongst student, consumer, veteran, and legal advocates to mandatory arbitration, and now positive action by two of the major players in the for-profit college industry, the way is clear for the Department to act decisively to end the practice once and for all.  We urge you to do what’s best for students: ban the use of mandatory arbitration in student enrollment agreements by all institutions of higher education.”

Mandatory arbitration clauses are common in for-profit college enrollment contracts but are almost never used by not-for-profit schools.  These clauses reduce transparency and accountability for for-profit colleges and force students who have been victimized by fraudulent or abusive conduct into secret arbitration proceedings where the deck is stacked against the student.  An investigation by the Senate Committee on Health, Education, Labor, and Pensions found that of the twenty-seven enrollment agreements produced to the committee by for-profit education companies, twenty-one contained a clause that required students to go through a process of mandatory binding arbitration. Not only does forced arbitration hurt individual students who cannot obtain meaningful recourse directly from wrongdoers, but it also prompts those students to seek relief from the Department of Education through taxpayer dollars.

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