THE ARBITRATION FAIRNESS FOR STUDENTS ACT OF 2012 Senator Al Franken and Senator Tom Harkin

If a college or university misleads students in marketing materials or during recruitment, those students should have access to a jury of their peers. However, the growing use of forced arbitration provisions in enrollment contracts has eroded this essential right. Forced arbitration provisions thwart the ability of students to hold schools accountable for wrongdoing and keep them honest. Background In a 5-4 decision last year, the Supreme Court ruled in AT&T v. Concepcion that corporations could use arbitration clauses in contracts to prevent a class action lawsuit. This ruling continued a trend over the past several years, in which the Supreme Court has slowly broadened the reach of the Federal Arbitration Act, ignoring evidence that the FAA was never intended to apply to contracts between big companies and consumers (or students). A month after the Supreme Court ruling, a federal judge in Colorado denied class action status for students who were suing their former college for misrepresenting its tuition, accreditation, and job placement rates. Because of the deference the Supreme Court has granted to the FAA, lower courts are forced to honor arbitration clauses, even when the claims would otherwise go forward. What the Arbitration Fairness for Students Act Does The Arbitration Fairness for Students Act amends the Higher Education Act of 1965 to prohibit colleges and universities that receive federal student aid from including mandatory arbitration agreements in enrollment contracts. It restores the rights of students to seek justice in our courts. It protects the integrity of all other federal laws that seek to protect students, but are sidestepped by mandatory arbitration clauses. What the Arbitration Fairness for Students Act Does Not Do The Arbitration Fairness for Students Act does not restrict the use of arbitration agreements when two parties choose to arbitrate after a dispute arises. The Arbitration Fairness for Students Act does not ban arbitration between students and schools. Arbitration can be a suitable alternative to litigation if the consent to arbitration is truly voluntary and occurs after the dispute arises, but colleges and universities should not be able to insulate themselves from liability by forcing students to preemptively give up their right to be protected by our nations laws. The legislation is supported by Education Trust, National Consumer Law Center (on behalf of its low-income clients), National Consumer League, National Association of Consumer Advocates, American Association for Justice, Public Citizen, The Institute for College Access and Success, Consumers Union, the U.S. Public Interest Research Group, and the Minnesota State College Student Association. For more information, or to cosponsor this bill, contact Jake Schwitzer in Senator Frankens office at jake_schwitzer@franken.senate.gov or 202-224-5641.