Apollo Eliminates Mandatory Arbitration Clauses

May 20, 2016

Apollo Education Group, the parent company of the University of Phoenix and Western International University, announced Thursday that it would eliminate the use of mandatory arbitration clauses in students' enrollment agreements.

"We have worked hard to further improve the student experience at all of our institutions and it's clear that eliminating mandatory arbitration is the right choice for all of our students," said Greg Cappelli, chief executive officer of Apollo, in a written statement. "This decision joins a host of efforts already underway to improve student outcomes, align all of our U.S.-based colleges under a standard student practice, and comes with the full support of our prospective new owners."

Earlier this month Apollo shareholders approved a deal for the company to be purchased by a consortium of investors. The sale remains subject to review by the U.S. Education Department and the Higher Learning Commission, Phoenix's regional accreditor, but is expected to be completed by the end of the year.

The Obama administration has been considering banning mandatory arbitration agreements at institutions that receive federal funding. These agreements, which many for-profits have in place, prevent students from filing lawsuits against their colleges, requiring them to instead settle disputes through arbitration. Critics of arbitration agreements have argued that the proceedings often are conducted in secret and grant students fewer rights than do traditional courts.

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