U.S. Urged to Deny Aid to For-Profits That Force Arbitration

February 24, 2016

Public Citizen, a consumer advocacy group, filed a petition today with the U.S. Department of Education to demand that for-profit institutions that require students to sign predispute arbitration clauses not be allowed to receive federal funding.

"Taxpayers should not have to subsidize predatory schools that deny their students a day in court," said Julie Murray, an attorney with Public Citizen and author of the petition, in a news release. "The Department of Education should work quickly to protect students and their families from predatory schools trying to immunize themselves from accountability for their wrongdoing."

The petition also urges the department to bar institutions from including arbitration clauses in enrollment or other agreements with students as a condition of receiving federal aid.

Critics of for-profits have argued for years that students who are forced to sign arbitration agreements as part of enrollment are left without much legal recourse when they're defrauded by the institutions.

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