Douglas Olsen
Students may sign a university agreement with their school outlining their financial responsibilities and the terms of tuition payment. In exchange for education and an eventual degree, the student agrees to pay the university tuition. The university agreement can also include a code of conduct and legal conditions that allow the school to terminate a student's enrollment if violated. However, the courts are inconsistent in their view of the university-student contract, and any remedies for breach of contract are unclear. While for-profit institutions typically use enrollment contracts, traditional universities and public institutions do not.
| Characteristics | Values |
|---|---|
| Enrollment contract | Forced arbitration clause, agreement to individual dispute resolution, interest rate on tuition charges, waiver of rights to join with other customers and go to court |
| Enrollment agreement | Outlines financial responsibilities, terms of tuition payment, reserves school's rights to withhold education or certification in the event of non-payment, includes code of conduct and legal conditions |
| University-student contract | Promise of in-person instruction and access to campus, development of human capital through curricular and extracurricular activities, protection of the community with mandates |
| Termination | Written notice by either party, student responsible for unpaid tuition and fees, additional penalties |
| Institution type | For-profit institutions are more likely to use enrollment contracts than public and non-profit institutions |
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What You'll Learn
Enrollment contracts and forced arbitration
While it is not common for universities to have students sign an enrollment contract, some for-profit institutions do use them. These enrollment contracts often contain forced arbitration clauses that require students to settle disputes through private arbitration instead of going to court. Forced arbitration clauses are one-sided, corporate clauses that can prevent students from seeking remedies for harm caused by institutions' predatory conduct. They also include class-action bans, which bar students from banding together to pursue claims of wrongdoing.
Mandatory arbitration clauses in college enrollment contracts prevent the government from determining if any school is routinely defrauding consumers. They facilitate secrecy about potential problems at colleges because they prohibit students from seeking redress in court. The process also disadvantages consumers and creates unfairness for students when schools and those providing arbitration services. Arbitration awards are private, and arbitrators lack the power to order ongoing compliance, so they cannot produce lasting solutions that force institutions to change their behaviour. As a result, illegal institutional practices can continue until a court rules them to be illegal.
In 2016, the Obama administration effectively banned mandatory arbitration clauses by prohibiting federal student loan dollars from being used at schools that had these clauses in their enrollment contracts. However, the Trump administration reversed this ban in 2019, allowing colleges to once again include these clauses in their contracts. The ban on arbitration in college enrollment contracts remained in effect until July 1, 2020.
Some lawmakers have introduced legislation to eliminate forced arbitration clauses and class-action bans from college enrollment contracts. The Court Legal Access and Student Support (CLASS) Act of 2015, for example, would prohibit the use of these clauses in enrollment contracts, protecting students from being ripped off by for-profit colleges.
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Student handbooks and human capital
Student contracts with universities are more prevalent in for-profit institutions, where enrolment contracts are used. These contracts can include forced arbitration clauses and individual dispute resolution proceedings, potentially limiting students' rights. Traditional non-profit and public universities, on the other hand, often rely on rules and procedures outlined in student handbooks rather than formal contracts.
The concept of human capital is integral to understanding the role of students in the university context. Human capital refers to the stock of human capabilities and knowledge within an organisation, and it plays a pivotal role in organisational performance and effectiveness. The Oxford Handbook of Human Capital explores the dynamic and heterogeneous nature of human capital in organisations, including universities, and the need for new management frameworks. It provides an interdisciplinary survey of human capital concepts, revealing its systemic role as the lynchpin of social, structural, and other forms of intangible and tangible capital.
Student handbooks, in the context of universities that do not employ enrolment contracts, serve as a crucial tool for outlining the rights and responsibilities of students. These handbooks detail the rules and procedures that students are expected to follow during their academic journey. By providing a comprehensive guide to student conduct, academic policies, and other relevant information, student handbooks contribute to the overall governance of the university community.
The connection between student handbooks and human capital becomes evident when considering the role of students as key stakeholders in the university ecosystem. Students are the primary bearers of human capital within the university context. They bring their unique capabilities, knowledge, and skills to the academic environment, contributing to the overall intellectual capital of the institution. Student handbooks play a pivotal role in fostering and regulating this human capital by establishing the standards and expectations for student behaviour, academic integrity, and personal development.
Moreover, student handbooks can also outline the support services and resources available to students, which are essential for nurturing human capital. Provisions for academic advising, career guidance, mental health support, and other student services contribute to the holistic development of students, enabling them to maximise their potential. By delineating the rights and responsibilities of students and the university, student handbooks create a framework that facilitates the acquisition and enhancement of human capital within the university community.
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Student rights and limitations
Students have certain rights and limitations that apply to their time at university, which are often outlined in an enrollment contract or student handbook. These rights and limitations can vary depending on the university's public, private, or for-profit status, as well as the student's own citizenship or visa status.
Rights
Students in both public and private universities have rights protected by federal and state laws. These include the right to freedom of speech, religion, and privacy. For example, federal law protects students' rights to express their views, although school officials can limit this if it disrupts the learning environment. Additionally, students have the right to be informed of their rights, as well as the university's policies, rules, and regulations. They also have the right to participate in curricular and extracurricular activities, and to be respected as individuals with human dignity, with the right to full physical, social, intellectual, and moral development. Students are also entitled to academic freedom and reasonable protection within university premises.
Limitations
The limitations on students' rights often come into play when there is a dispute or grievance. For example, some universities include forced arbitration clauses in their enrollment contracts, requiring students to waive their right to go to court. Additionally, students' freedom of speech is limited by the university's jurisdiction, and speech that disrupts the learning environment may be restricted. Students may also be subject to drug testing and dress codes, which must not violate their right to freedom of speech.
Visa-Specific Rights and Limitations
For students on visas, there are additional rights and limitations to be aware of. Student visa holders are guaranteed basic constitutional protections and have the right to freedom from illegal search or seizure. They can also work on-campus jobs for up to 20 hours per week during academic terms and full-time during breaks with proper authorization. If a student visa holder is unhappy at their university, they can transfer to another SEVP-approved school without jeopardizing their visa status.
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University agreements and financial responsibilities
The existence of a contract between students and their university depends on the university in question. While traditional universities have rules and procedures, they are usually outlined in a student handbook or college catalog rather than a contract. In contrast, for-profit institutions are more likely to use enrollment contracts. These contracts may include forced arbitration clauses, which require students to waive their rights to legal action in the event of a dispute.
Regardless of the presence of a formal contract, students typically have financial responsibilities towards their university, which are outlined in a Student Financial Responsibility Agreement (SFRA). This agreement is a mandatory disclosure document that outlines the financial obligations and responsibilities associated with attending the university. It is required by federal debt collection and consumer protection laws, which mandate transparency in policies, procedures, and requirements.
The SFRA must be completed at least once per academic year, or at the start of each semester, and can be completed electronically. It informs students of the potential consequences of non-payment, such as not being permitted to enroll for classes or access university services and buildings. The agreement also covers other financial matters, such as billing, payment methods, refunds, late payments, contact methods, collections, and additional charges like fines or fees for services.
By completing the SFRA, students acknowledge their understanding of the university's financial policies and their obligation to pay any charges incurred. Students who choose not to sign the agreement are not agreeing to pay these charges, and their enrollment may be subject to cancellation. The SFRA is separate from any funding arrangements, and even students with full funding are required to complete it, as they may still accrue charges that are not covered by their funding.
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Termination and penalties
While the existence and specifics of contracts between students and their universities vary, there are some commonalities regarding termination and penalties. For instance, at for-profit institutions, enrollment contracts are standard, and students may be required to waive their rights to legal recourse and commit to arbitration. In contrast, public and traditional nonprofit universities typically do not employ enrollment contracts.
When it comes to termination and penalties, the available information primarily concerns housing contracts. At universities with housing contracts, termination before the contract's natural expiration may be possible under certain approved circumstances, often with associated fees. For example, Webster University differentiates between "cancellation" and "termination." A cancellation occurs before the contract starts, whereas a termination occurs after the student has moved in. To cancel a housing contract at Webster University, a student must pay a $175 housing deposit, comprising a $25 non-refundable application fee and a $150 damage deposit. To terminate a housing contract after moving in, a student must submit a Request for Termination online, which may be approved for a valid reason, such as graduating.
The terms of contract termination and associated penalties can vary, so it is essential to refer to the specific university's policies. Some universities may differentiate between different categories of approved reasons for termination, each with its own fee structure. Additionally, submitting a personal statement and supporting documentation for a termination request can help ensure the student's needs are considered, and alternative options may be explored before terminating the contract.
It is worth noting that enrollment contracts at for-profit institutions may include forced arbitration clauses, which can limit students' rights to legal recourse. However, such clauses are not ubiquitous, and public universities do not require students to commit to arbitration.
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Frequently asked questions
Students may sign a university agreement with their school that outlines their financial responsibilities and other terms. However, it is not standard practice for all universities to use enrollment contracts. For-profit institutions are more likely to use them, while public and nonprofit institutions typically do not.
A university contract outlines the financial responsibilities of the student, including tuition payment terms and any penalties for non-payment, such as withholding education or certification. It may also include a code of conduct, legal conditions, and the terms of enrollment, such as start and end dates and the degree program.
Yes, a university contract can typically be terminated by either party upon written notice. The student may be responsible for any unpaid tuition and fees, and may also be subject to additional penalties outlined in the university catalog.
The human capital model suggests that universities provide students with a community that develops skills useful in the labour market. This includes in-person classes, dorm life, clubs, and other curricular and extracurricular activities. The university-student contract, therefore, promises students' human capital development and the learning community necessary for that.
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