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.

Sincerely,

Attorney Jonathan Cohen

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,

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.

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!

First, Westwood released a special issue of “The Buzz”, the Westwood student newsletter, confirming that they did not obtain regional accreditation from the Higher Learning Commission.  Westwood stated,

As a follow up to our communication in January, Westwood College has just received official notification from the Higher Learning Commission (HLC) that we are approved for continued candidacy for regional accreditation.

HLC indicated that Westwood is making significant progress and is working on an aggressive plan for achieving regional accreditation well within the time period set by HLC policy. Typically, the time period is four years, which means we are about halfway through the process.

This is not entirely consistent with the official statement released by the HLC. The HLC stated that it “granted candidacy status to Westwood College in 2007.  The Commission conducted an evaluation of Westwood College for initial accreditation beginning with a team visit in May 2009.  The evaluation process determined that Westwood does not yet meet meet the Criteria for Accreditation, but that it does continue to meet the requirements for continued candidacy. Westwood College was granted continued candidacy in February 2010.”

Notably, the HLC states that this information was available in February 2010, but the information was not provided to students until this week.  The HLC’s statement also does not say that Westwood has made “significant progress” towards obtained accreditation.  A representative from the HLC confirmed to James Hoyer that a school has four years to move from candidacy status to accreditation.  Westwood is now three years into their candidacy, which is three quarters through the allotted window.

We have heard from many students that they were told the school would be achieving HLC accreditation by October, 2009, and have been waiting for word that accreditation was granted.  If you enrolled in Westwood College or Westwood College Online because you needed regional accreditation for a future job or to transfer your credits, then it is very important that you discuss this new development with the employer or school and determine how it impacts your plans.

Second, the Denver Post and the Associated Press reported on March 24, 2010, that the Colorado Attorney General is investigating 51 complaints against Westwood College.  According to the Post, the investigation is based on complaints received by the Attorney General’s office and the Better Business Bureau.  To put the number of complaints into context, the AG reported one complaint against Everest College and three against Colorado Technical University.

A spokesman for the Attorney General’s office is quoted as stating that when the office “sees a large volume of complaints, as a resource allocation issue, we’ll look into those first, we’ll explore those more deeply.”  The complaints are predominately related to representations concerning the cost of the program and the transferability of credits.

We will keep you up to date on any information we hear regarding the status of this investigation as it becomes available.

Both of these updates are a very important reminder that there IS value to telling your story!!!  You ARE being heard! If you want to submit your experience to the Higher Learning Commission for their continued review, click here.  If you want to submit your experience to the Colorado Attorney General, click here.

The whole article is great, but I think this section is especially telling:

The Career Education Corporation e-mailed The New York Times names and contact information for four graduates “with whom we hope you’ll touch base for important perspective.” One came with a wrong number. A second had graduated 15 years ago.

A third, Cherie Thompson, called the program “a really positive experience” but declined to discuss her debts or earnings. The fourth, Ericsel Tan, graduated in 2003 and later earned $42,000 a year overseeing catering at a convention center near Seattle. He said his success reflected his seven years of kitchen experience prior to culinary school.