Student Contracts: University Agreements And The Law

Students enrolling in colleges are often confronted with a flurry of paperwork, including applications, financial aid forms, and housing forms. Some schools also include an enrollment contract in this stack of documents, which is a formal, legalistic agreement that includes language outlining the options available to the student in a range of situations. These contracts are designed to protect the financial interests of the school and limit the student's legal rights if something goes wrong. While such contracts are not generally found in traditional higher education, they are frequently imposed by for-profit colleges participating in federal financial aid programs. The restrictions placed on incoming students by these enrollment contracts can be categorised into four types: forced arbitration clauses, go-it-alone clauses, gag clauses, and internal process requirements.

Enrollment contracts are formal agreements that limit students' legal rights

Enrollment contracts are formal agreements between a university and a student that outline the rights and responsibilities of both parties. While these contracts are meant to protect both the student and the university, they have come under scrutiny for limiting students' legal rights and ability to seek redress in the event of a dispute.

The inclusion of enrollment contracts in the stack of paperwork presented to incoming students is not a common practice in traditional higher education. However, some schools, particularly for-profit colleges, have started to incorporate them. These contracts are designed to safeguard the financial interests of the institution by restricting students' legal options should they feel wronged by the university.

The restrictions imposed by enrollment contracts can be categorised into four types: forced arbitration clauses, go-it-alone clauses, gag clauses, and internal process requirements.

Forced arbitration clauses prohibit students from taking their complaints to court. Instead, they are legally compelled to resolve their disputes through arbitration, a process where an arbitrator, often chosen and paid by the university, makes a binding decision. This can create a conflict of interest and severely limit students' ability to seek justice.

Go-it-alone clauses prevent students from joining forces with peers who have similar complaints against the university. This requirement to seek resolution alone can deter students from pursuing their grievances and enable worse behaviour by the institution.

Gag clauses prohibit students from sharing information about their complaints or the resolution process with anyone else. This strategy creates a firewall between wronged students and prevents them from working together.

Internal process requirements mandate that students go through the university's internal grievance process before taking their complaints elsewhere. While it is good practice to encourage students to use internal procedures first, some schools try to trap students by prohibiting them from ever taking their complaints outside the institution, even if internal mechanisms offer no satisfactory resolution.

It is important to note that the use of these restrictive clauses varies depending on the type of college. They are frequently imposed by for-profit colleges participating in federal financial aid programs but are rarely used at traditional nonprofit colleges or for-profit institutions not receiving federal funds. Public institutions almost never employ such restrictions.

Despite the potential benefits of enrollment contracts in consumer protection, the inclusion of restrictive clauses can lead to dishonest or predatory behaviour by universities. It is crucial for students to carefully review and understand the terms and conditions before signing any agreement, as these contracts can significantly limit their legal rights and options for redress.

Forced arbitration clauses prevent students from going to court

Forced arbitration clauses are commonly included in the fine print of contracts that consumers sign. These clauses prevent students from going to court and instead require them to take their complaints to a privatized, invisible, and often inferior forum.

Arbitration clauses are frequently included in the fine print that an individual is required to click through when making an online purchase. Arbitration clauses are also often included in the company orientation and personnel materials a worker receives when beginning a new job. Because these arbitration clauses are usually buried in a sea of boilerplate, many people who are subject to them do not realize that they exist or understand their impact.

In the context of higher education, enrollment contracts are formal, legalistic agreements snuck into paperwork presented to incoming students. These contracts are designed to protect the financial interests of schools by limiting students' legal rights should something go wrong. While restrictive clauses are frequently imposed by for-profit colleges, they are rarely used at traditional nonprofit colleges or at for-profit colleges not using federal funds, and almost never at public institutions.

Forced arbitration clauses prohibit students or former students from going to court to seek resolution of any complaints. Instead, the college requires students to take any complaints to an arbitrator in a private, binding process. This process can be extremely costly and may deter students from seeking legal recourse.

Additionally, arbitrators are often chosen and paid by the educational institution, raising questions about their neutrality and fairness. The outcome of arbitration is typically kept confidential, preventing other students from becoming aware of their rights and deterring future claims.

The use of forced arbitration in higher education has significant implications for students. It deprives them of important options for redress and can prevent them from joining together in class-action lawsuits. This limits their ability to hold educational institutions accountable and allows predatory or discriminatory practices to continue unchecked.

The inclusion of forced arbitration clauses in enrollment contracts is a growing trend that undermines the rights of students and consumers. It is essential for individuals to be aware of these clauses and understand their impact before signing any agreements.

Go-it-alone clauses prevent students from joining peers with similar complaints

Go-it-alone clauses are a type of restrictive clause that colleges and universities may include in their enrollment contracts. These clauses prevent students from joining peers with similar complaints, forcing them to seek resolution alone. While not common in traditional higher education, these clauses are sometimes included in the enrollment contracts of for-profit colleges, particularly those receiving federal funding.

Go-it-alone clauses are often included within arbitration clauses, which require students to take their complaints to an arbitrator chosen and paid by the college or university. This can create a conflict of interest, as the arbitrator may be biased in favour of the institution.

By prohibiting group action, go-it-alone clauses make it less likely that students will pursue their complaints. This enables worse behaviour by schools, as they know that individual students are less likely to take action than a group.

In addition to go-it-alone clauses, enrollment contracts may also contain other restrictive clauses, such as forced arbitration clauses, gag clauses, and internal process requirements. These clauses are designed to protect the financial interests of the school by limiting students' legal rights.

The use of these restrictive clauses has been criticised, and there have been calls for colleges and universities to stop including them in their enrollment contracts. Some states, such as Illinois and Arizona, have taken steps to discourage the use of these clauses by requiring institutions to regularly resubmit their enrollment contracts for review.

Gag clauses prohibit students from sharing complaint details

Students enrolling in colleges are often confronted with a flurry of paperwork, which may include an enrollment contract. Enrollment contracts are formal, legalistic agreements that are not generally found in traditional higher education. They are designed to protect the financial interests of schools by limiting students' legal rights should something go wrong.

One type of restriction placed on incoming students by enrollment contracts is a gag clause. Gag clauses prohibit students or former students from telling other people about the complaint resolution process or the specifics of any final ruling. While confidentiality agreements in settlements are common, gag clauses in enrollment contracts are a new strategy by companies to prevent tales of disputes from reaching the media or law enforcement agencies. By requiring individual processes, gag clauses also create a firewall between wronged students, reducing the likelihood that they will learn about each other's complaints and preventing them from working together to seek a better resolution.

Gag clauses are not frequently imposed by traditional nonprofit colleges or by for-profit colleges not using federal funds, and they are almost never found at public institutions. They are, however, frequently imposed by for-profit colleges participating in federal financial aid programs.

An example of a gag clause can be found in the enrollment contract of Coyne College, where students must agree to keep confidential "all aspects" of their dispute. The contract states that any actual or threatened violation of this provision would result in "irreparable harm" and can be legally enjoined.

Gag clauses in the context of employment contracts also restrict employees from disclosing trade secrets, assets, operations, future innovations, or proprietary information.

Internal process requirements mandate students to follow the institution's internal grievance process

Students are often confronted with a flurry of paperwork when they go to college, including applications, financial aid forms, and housing forms. Some schools have been including an additional form hidden in that stack of innocuous documents: an enrollment contract. Enrollment contracts are formal, legalistic agreements designed to protect the financial interests of schools by limiting students' legal rights should something go wrong. These contracts include language that spells out the options each signee has in a range of situations, which probably appear purely hypothetical to most enrollees.

One of the types of restrictions placed on incoming students by enrollment contracts is internal process requirements. While all colleges encourage students to make use of internal grievance procedures, internal process requirements prohibit students from taking their complaints to other forums for resolution without first going through the school's internal process. In other words, internal process requirements mandate students to follow the institution's internal grievance process.

Sixteen institutions, all for-profits receiving federal aid, included language in their contracts that mandated students to go through the institution's internal grievance process before taking their complaints to arbitration. For example, in the case of ITT Technical Institute, which caught the attention of law enforcement agencies for allegedly misleading prospective students, the school scolded former students for taking their complaints to the U.S. Department of Veterans Affairs rather than using the agreed-upon grievance procedures. In a letter responding to a student's complaint, ITT said it was responding "even though this is outside of our established Student Complaint/Grievance Procedure," implying that the student had violated a contractual obligation.

Another example of an internal process requirement can be found in an interstate pact for regulating online colleges across state lines. There is a provision in this pact that prohibits state oversight agencies from following up on complaints about a college unless the complaints have gone "through the institution's own procedures for resolution of grievances" and only after the student has "appealed" the school's action. This provision dramatically impedes state agencies' ability to follow up on or even accept complaints, and creates misleading data about the incidence of problems at an institution. The compact, developed jointly by traditional and for-profit colleges, has been signed by thirty-six states.

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