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Press Center

Press Release

AAJ Statement on Department of Education Rule to Ban the Use of Forced Arbitration Against Scammed For-Profit College Students

October 28,2016

Washington, DC— The following is a statement from American Association for Justice President Julie Braman Kane on a final rule released today by the U.S. Department of Education that prohibits the use of forced arbitration and class action waivers by schools receiving federal funds under Title IV of the Higher Education Act of 1965. A recent study by The Century Foundation revealed that 98 percent of for-profit colleges that receive federal funds subject students to forced arbitration, which prevents students from holding educational institutions accountable in court.

“The American Association for Justice commends the Department of Education for taking this important step to restore accountability to predatory for-profit colleges. For too long, these institutions have used forced arbitration to keep defrauded students out of court while siphoning billions of taxpayer dollars. The final rule released today is well within the Department’s legal authority and will empower students to challenge unscrupulous practices that seem to pervade the industry, including allegations of fraud and misrepresentation of the quality of educational programs.

“The American Association for Justice strongly supports efforts to fully restore students’ access to justice, and we look forward to working with the Department of Education to implement this rule.”