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Press Remarks Testimony of Tariq Habash Before the New Jersey Assembly Higher Education Committee

Testimony of Tariq Habash Before the New Jersey Assembly Higher Education Committee

Testimony of Tariq Habash Before the New Jersey Assembly Higher Education Committee

State Student Assistance or Other Employment/Training-Concerns Eligibility
October 8, 2020

Chairwoman Jasey, Vice Chair Carter, and Members of the Committee:

Thank you for the opportunity to testify in favor of A.4407, which prevents state resources from flowing to schools and training programs that require students to consent to arbitration and waive other rights prior to a dispute arising.

My name is Tariq Habash, and I am the Head of Investigations at the Student Borrower Protection Center, a national nonprofit advocacy and research organization focused on ending the student debt crisis in New Jersey and across the country. Unfortunately, in recent years, we have seen the federal government under Secretary Betsy DeVos completely roll back consumer protections for students, exacerbating the student debt crisis for the millions of college students in New Jersey.

A brief history—in 2015, after the collapse of one of the largest chains of for-profit schools, Corinthian Colleges, left thousands students with nowhere to turn, students and advocates pushed President Obama and the Department of Education to protect students by ensuring that those harmed by Corinthian and other predatory schools would be granted relief from the overwhelming debt pushed onto them by these schools. In this rulemaking process, the Department designed numerous front-end consumer protections to catch future bad actors from preying on students, including prohibiting federal funds from flowing to schools that sought to silence students with forced arbitration clauses in enrollment agreements.

The federal government under Donald Trump and Betsy DeVos has spent the last four years working tirelessly to ensure students harmed by these predatory schools never receive justice. The federal protections have been gutted. Borrowers have been left with nowhere to turn. That is why New Jersey must take action. Because before schools like Corinthian Colleges, ITT Technical Institutes, Sanford Brown, Brightwood Career Institutes, and the Art Institutes shut down, they each operated in New Jersey, enrolling thousands of your constituents but limiting their ability to pursue justice in court when they were defrauded. In fact, many of these schools defrauded New Jersey residents after receiving state financial aid programs and workforce training dollars.

That is why A.4407 is so important. This legislation takes a critical step to fill in the void left by Betsy DeVos and protect New Jersey’s students and resources.

To be clear, A.4407 does not limit the use of arbitration. Rather, it recognizes that the state is an important participant in the education marketplace. When the state provides millions of dollars for education and training, it should be able to determine where to direct those funds, including ensuring that those funds are used in a manner that is safe and responsible for its residents.

A.4407 also gives schools the freedom to choose whether they want to maintain access to these limited state funds. A.4407 does not limit a school’s ability to operate in the state, it simply creates basic requirements for schools and programs to be eligible to receive state resources. Research shows that public and nonprofit schools in New Jersey and across the country do not use arbitration clauses in their enrollment agreements. For-profit schools and training programs that wish to maintain eligibility for these funds can simply follow suit, thereby ensuring that students attending their programs have the same protections under state law that their peer institutions provide.

Given the ongoing public health and economic crisis, state resources are more limited than ever. As you work to allocate New Jersey’s resources efficiently, you can ensure that state funds go to the safest programs that promote transparency and accountability.

Moreover, you can minimize the financial harm students face when schools block their access to justice. Thank you for your time.

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