Dive Brief:
- U.S. Rep. Maxine Waters and Sen. Dick Durbin have introduced legislation strengthening students’ legal rights against their colleges and universities.
- The legislation prohibits schools getting federal financial aid dollars from including clauses in enrollment documents that restrict students’ ability to take legal action against them.
- Corinthian Colleges included such a clause in its enrollment paperwork, as does ECMC, the company that bought 56 former Corinthian locations, according to Waters’ press release.
Dive Insight:
According to the press release, the clauses in question require binding, mandatory arbitration or prohibit students from seeking a jury trial or bringing a class action lawsuit. The clause is almost certainly protecting Corinthian Colleges Inc. from further legal trouble, especially as 16,000 students are left to figure out where to continue their education following the abrupt closure of Corinthian’s last 28 colleges. If all 16,000 students take advantage of their right to discharge student loan debt accrued to attend the now-closed colleges, the federal government will be on the hook for more than $200 million dollars.
