We have an update on the class arbitration filed with the American Arbitration Association in May 2009. On July 16, 2010, Arbitrator William Baker denied our Motion for Clause Construction, which means he determined that the language in the arbitration agreement, which you had no ability to negotiate, permits individual arbitration only. The arbitrator’s decision was based upon a recent ruling by the United States Supreme Court in the case of Stolt-Nielsen, which resolved a dispute between two sophisticated businesses as to whether an arbitration agreement permitted class arbitration.The arbitration agreement that you signed does not directly address class arbitration. According to the arbitrator, the absence of any reference to class arbitration means there was no agreement for students to arbitrate as a class.
Arbitrator Baker’s decision was not based on Westwood proving or disproving anything. It was purely procedural and did not address the allegations of deceptive practices and violations of Colorado lending laws or determine they were unfounded or lacked merit. We believe that applying Stolt-Nielsen to a dispute between consumers, like students, and a major corporation, like Westwood, is unfair and wrong. This decision will allow Westwood to hide behind the confidentiality shield of individual arbitrations, in which the filings and results are not disclosed.
We see the arbitrator’s decision as a positive one, aside from the fact that it delayed the ultimate resolution of students’ claims. Now that students are freed from continuing in arbitration, they can and will proceed to litigate their claims in a variety of forums, including district courts across the country. We assure you that the fight will continue, and we will not rest until Westwood is held accountable for its conduct.
In the meantime, the other class actions we filed against Westwood in federal and state courts in Texas and Wisconsin are being vigorously prosecuted. Both cases are based upon Westwood offering online programs in violation of state law. For students who did not attend online programs in these two states, a new plan of action will be revealed soon.
If you have questions, please do not hesitate to contact us.
We thought you’d like to hear about someone who is trying to help students facing problems at for-profit colleges.
Senator Tom Harkin
Senator Tom Harkin of Iowa is becoming a champion for students who’ve voiced concerns about their experiences at for-profit colleges. The Senator wrote an editorial for the LA Times cautioning that the scenario students are facing is painfully similar to the recent mortgage meltdown. Harkin is Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee and launched the first in a series of hearings last month to investigate the for-profit college industry. In his editorial, Senator Harkin quotes one of the witnesses who testified, Wall Street money manager Steve Eisman, who predicted the sub-prime mortgage collapse:
Wall Street money manager Steven Eisman told the committee that many for-profit colleges are “marketing machines masquerading as universities.” Their rapid growth is driven by easy access to federal student loans, guaranteed by the government. “The government, the students and the taxpayer bear all the risk,” Eisman testified, “and the for-profit industry reaps all the rewards.”
Senator Harkin goes on to point out just how great those rewards are proving to be for executives at for-profit schools:
The president of the largest for-profit college is paid nearly 14 times the compensation of the president of Harvard University.
Meanwhile, he writes students are often left in an even worse financial position with little recourse:
Subprime borrowers were able to walk away from their homes and, therefore, their debt. But it is a different story for millions of students who take out loans to attend for-profit colleges. Under the law, people cannot discharge student debt in bankruptcy; so if they can’t pay it off, it will continue to accrue compounded interest indefinitely.
Click here to read more from Senator Harkin’s editorial.
Be sure to continue speaking out and sharing your story. People are beginning to listen.
WTSP, The CBS station in Tampa, Florida took a close look at student complaints about for-profit colleges in this report. They talked to two former Westwood College Online students and shared several quotes from hundreds of email complaints they reviewed. The story comes just as the Senate began the first in a series of hearings about for-profit colleges and growing concerns about their explosive growth, student complaints and how much taxpayer money is going to them. During the hearing, the Department of Education’s Inspector General reported that 70% of their criminal investigations are of for-profit institutions, even though only 10% of the students pursuing higher education attend for-profits. Click here to read the story and share your comments about your experience at Westwood.
The CBS station in San Francisco, KPIX, profiled a Westwood student who complained to their Action Help Line about the school. The 23-year-old student, Christian Duncan, says he currently owes close to $80,000, and still does not have a diploma. They call his experience “one expensive lesson.”
The story also focuses on the huge boom in for-profit education in the past decade. They report that tuition is usually far more expensive than what public colleges charge, and the reporter says even some top-notch private universities are cheaper. She warns that students of these schools can get stuck paying the bill for a long time. Click on the video above to watch. We’re sure many of you can relate, from all the stories you’ve shared with us. If you haven’t already, you can click here to tell us your story.
Robert Shireman, Nicole Mayer, Dr. Julianne Malveaux
Hi everyone,
I’m Attorney Nicole Mayer. I’ve been working on your case with Jillian Estes since the beginning. This weekend, I was a panelist at an important education conference in Chicago hosted by the Rainbow Push Coalition. I had the opportunity to discuss your concerns about student loans and for-profit schools with some wonderful people. Among them were the Deputy Undersecretary of the Department of Education Robert Shireman and President of Bennettt College Dr. Julianne Malveaux. (see picture)
It was inspiring to see so many people stand up and advocate for students. After listening to everyone speak and talking with other panelists, I really believe that big changes are coming. Part of this can be seen by the rules released by the Department of Education today which are designed to protect students from aggressive and misleading recruiting practices.
There is still a very important rule up for discussion, the one that requires schools to show that their graduates achieve “gainful employment.” The for-profit schools are lobbying hard against this, so everyone who wants to see a change will need to be active. So, keep telling your stories. We will make a difference. I will keep you posted on what you can do to help make sure that rule is passed in a way that protects students.
Congratulations go out to Attorney Jillian Estes, who many of you know well on this website.She is, of course, the attorney who has been your lead advocate in the suit against Westwood College.And now, Jillian is also a new mom.Jillian and her husband, Sean, are proud to announce the birth of their first child, a 10 pound, 3 ounce baby boy!Mom and son are doing well.Jillian will be a little busy at home for a while, but she’ll continue to read your e-mails and monitor progress in the case. Meanwhile, the rest of our legal team will continue to work hard on your behalf and keep you updated on developments. Please join us in wishing the Estes family congratulations.
Posted by Jillian Estes on May 20, 2010 in Uncategorized
The United States Supreme Court released their decision in Stolt-Nielsen, S.A. v. AnimalFeeds International on April 27, 2010. In a 5-3 opinion (Justice Sotomayor did not participate), the Court ruled that, where there are two sophisticated business entities who negotiated a contract that did not agree to class arbitration (this is called a “silent agreement”), one of the parties cannot later be subjected to class arbitration. The ruling is long and a little tough to read through, but if you’re interested, it’s linked above.
Whether or not this will impact our case is now being decided by the arbitrator. We do not believe Stolt is on point to our case, because the facts are so different where the agreements entered into by Westwood students were not negotiated, the industry standard does not oppose class arbitrations and students had no choice but to agree to the terms to attend the school. We submitted a brief on this topic to the arbitrator on Monday and Westwood submitted a brief laying out their position at the same time. Both sides are now responding to each other’s briefs and then the issue will be in the arbitrator’s hands to decide.
Once we know more about what happens next, we’ll be certain to post it. There are a few options: (1) the case can proceed as a class in arbitration and we’ll move forward with the next steps, (2) the case cannot proceed in arbitration and we have to go to a judge to decide whether the agreement is unconscionable (that means too unfair to enforce), or (3) each student has to file an individual arbitration claim. Over 600 students have contacted us about their experiences at Westwood College and Westwood College Online, so this would obviously be a huge task, but we’ll cross that bridge if we get there, but we don’t think the law supports forcing that final option. So, keep checking back and we’ll let you know what’s going to happen next just as soon as we know.
In the mean time, we’re continuing our work and investigation every day. To date, over FIFTY former employees have reached out to help the MORE THAN 600 students who have contacted us by sharing their experiences and knowledge. Westwood College and other schools in the for-profit college industry have been heavily under attack lately by PBS, various news articles including one in Good Housekeeping and several articles exposing attempts to sway politicians through donations, claims made by politicians in political races, and on-going regulatory investigations. All of this really comes down to one thing: your voices are being heard! YOU are making a difference by telling your stories and passing your experiences along to those people who can take action on your behalf. Keep fighting the good fight and we’ll keep on standing by your side!
Posted by Jillian Estes on May 3, 2010 in Media Coverage
PBS Frontline produced a one-hour investigation called College, Inc. examining the business model of for-profit colleges, specifically the conflict between the purely profit-driven Wall Street execs and the obligations that a college has to look out for the best interest of its customers.
A couple of very important pieces of information have been announced this week that raise concerns for students regarding the status of Westwood College. Both of these updates are tremendously important for current students of Westwood and for former students who are ready to continue sharing their experiences. The most important thing to remember while reading these updates is that you ARE being heard! So keep speaking up, keep telling your stories and you will keep making a difference!
Posted by Jillian Estes on Mar 14, 2010 in Media Coverage
The New York Times ran an article titled “The New Poor – For-Profit Schools Cashing in on Recession and Federal Aid” by Peter S. Goodman. It ran on the front page of the Sunday edition of the Times and is currently one of the most popular stories online with nearly 500 comments so far. If any of you haven’t read this article yet, I encourage you to do so and to leave a comment with your experience. Articles like Mr. Goodman’s are critical in exposing the financial devastation caused by the scams taking place at for-profit schools around the country and your comments will help media outlets realize how it is to address this topic.
