For-profit colleges often take away student's right to sue

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The latest controversy involving for-profit colleges is over a student's right to sue the institution. (WLS)

Several for-profit colleges are being accused of misleading students about job placement rates. Now the latest controversy is over a student's right to sue a for-profit college. Some may want their day in court if they think they didn't get what they paid for. Lawmakers want one large school to get rid of a requirement, which won't let students file a lawsuit.

Illinois Senator Dick Durbin has led the fight to help students with what he calls unscrupulous practices by for-profit colleges.

"They lure students into their programs with false promises about diplomas and jobs that will follow," Sen. Durbin said in September of 2015.

Durbin's latest mission is to stop for profit colleges from using "mandatory arbitration clauses" in their enrollment agreements. Those clauses prevent students from suing.

Four other senators have joined Durbin. They say, "These clauses reduce transparency and accountability ...and force students who have been victimized by fraudulent or abusive conduct into secret arbitration proceedings where the deck is stacked against the student."

The Department of Education is also looking into regulations to end forced arbitration, saying those clauses are buried and calling them "gotchas" in fine print.

Both the University of Phoenix and Chicago-based Devry, have abandoned the practice. Now the senators are asking ITT Educational Services to follow suit. ITT, one of the largest for-profit education companies, has three campuses in the Chicagoland area. The college told the I-Team, "No one is more concerned about our students than we are... but do not feel it's appropriate for us to respond via media."

The Consumer Financial Protection Bureau also sued ITT, alleging "predatory lending." That lawsuit is ongoing.

The Illinois Attorney General's office is also investigating the college.

ITT says, "There has not been a single finding of wrongdoing by a court of law to confirm allegations... the evidence does not support these claims and we will continue to defend ourselves vigorously." ITT also says it provides nontraditional students a quality career based education.

Senators have asked ITT Tech for an answer about ending mandatory arbitration practices, by the end of June.

For-profit colleges took another hit this week when a study by the National Bureau of Economic Research found that some graduates made $900 less per year than if they had never enrolled.
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