Supreme Court Decision on Arbitration May Have Eroded For-Profit Students' Right to Sue

Supreme Court Decision May Have Eroded For-Profit Students' Right to Sue 1

Nick Ut, AP Images

Students at Westwood College and other for-profit institutions may have no legal option but to go to binding arbitration if they feel they were misled, following a Supreme Court opinion in another consumer case.

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close Supreme Court Decision May Have Eroded For-Profit Students' Right to Sue 1

Nick Ut, AP Images

Students at Westwood College and other for-profit institutions may have no legal option but to go to binding arbitration if they feel they were misled, following a Supreme Court opinion in another consumer case.

The Education Department's new regulations on "misrepresentation" that go into effect next month are intended to protect students from false advertising in the college recruitment process. But a recent U.S. Supreme Court ruling may push in the other direction—limiting the existing legal recourses of students who feel they've been defrauded by their colleges, particularly by for-profit institutions, which typically require them to settle disputes through arbitration.

In a recent