Something Corporate: The Case for Treating Proprietary Education Institutions Like Corporations
38 Pages Posted: 16 Dec 2014 Last revised: 13 Dec 2018
Date Written: 2014
Postsecondary education, particularly proprietary postsecondary education, has become a product-driven industry. As such, the law must apply the same accountability standards on these schools that it requires of other proprietary entities. This article examines the history of and distinction between proprietary schools and traditional postsecondary schools, the modern reality of the educational marketplace, and the organizational structure of proprietary schools, positing that the regulation of the proprietary education industry is more akin to regulating a traditional corporation than regulating a traditional postsecondary school. Ultimately, this article concludes that a fiduciary duty, existing between proprietary education institutions and their students, must supplant the academic abstention doctrine, which has long been a fixture in the court system, and finds that historical causes of action against proprietary schools are inadequate in the modern context. This article also contends that the states are better positioned to regulate harmful trade practices of proprietary schools than the federal government and makes a realistic and modern recommendation for the regulation of proprietary educational institutions.
Keywords: Higher Education, Law, Corporate Law, For-Profit Education, Proprietary Education, Corporations
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