As part of a broad statement on corporate regulation, the presidential campaign of Democrat Hillary Clinton on Monday criticized the use of mandatory arbitration agreements in higher education. Some colleges, primarily in the for-profit sector, require newly enrolling students to agree to settle any disputes through arbitration rather than through a legal challenge. Consumer groups and some congressional Democrats, including Senator Elizabeth Warren, have said the companies' approach to arbitration often is unfair to students.
The Obama administration recently sought to ban mandatory arbitration agreements for all federal-aid-eligible colleges, as part of a proposed set of rules aimed at clarifying and expanding students' options for applying to have their federal loans forgiven. Clinton appears to support that move, saying mandatory arbitration clauses too often tilt the playing field to corporations.
"When the for-profit Corinthian Colleges collapsed, leaving thousands of students saddled with student loan debt, students were generally unable to sue because they had unknowingly signed away their right to take the school to court," the campaign said.
Some major for-profits, including DeVry Education Group and the Apollo Education Group, which owns the University of Phoenix, in recent months have voluntarily ended their use of the arbitration agreements.
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