Summary

Prohibits colleges and universities from forcing students into arbitration by removing federal enforcement of arbitration clauses in enrollment agreements and banning enrollment contract terms that limit a student’s right to sue, use a jury trial, or join with others in court. The ban applies to private and public institutions as defined under the Higher Education Act and takes effect one year after the law is enacted.

Key Points

• Prevents the federal Arbitration Act from being applied to enrollment agreements between students and colleges/universities.
• Defines "enrollment agreement" as any contract where a student makes a financial commitment in exchange for enrollment.
• Bars colleges and universities from requiring or enforcing contract terms that waive or limit a student's right to sue in court.
• Specifically prohibits contractual limits on choice of law, jury trial, and venue for student claims, whether filed alone or with others.
• Takes effect one year after enactment, giving institutions time to revise enrollment contracts and policies.
• Does not create new funding, tax changes, or federal authorization/appropriations.
• Likely increases students' access to courts and the possibility of class or group litigation against institutions.
• May increase litigation exposure and related legal costs for higher education institutions and change dispute-resolution practices.

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