Prospective Higher Education Reform to Ban Arbitration of Student Claims

By Vincent Sauvet

Another legislative proposal that would curtail arbitration was introduced in Congress on March 26.

The PROTECT Students Act of 2019 (S.867) was introduced on the Senate floor by New Hampshire Democrat Maggie Hassan. The bill, a general higher education reform which includes provisions related to institutions oversight and accountability, student loans and healthcare, would ban arbitration of claims brought by students against their institutions.

This follows up on CPR Speaks’ recent post on recent legislative efforts by congressional Democrats to limit the use of arbitration in various kind of disputes. See “New Push Coming for Familiar Arbitration Bills?” (April 3).

The text of Hassan’s bill would create add an exception to the enforcement of Chapter 1 of U.S. Code Title 9—the Federal Arbitration Act. It would bar enforcement of arbitration agreements in an enrollment agreement made between a student and an institution of higher education.

Combined with a prohibition for the institution to require a student to agree to, and enforce “any limitation or restriction on the ability of a student to pursue a claim, individually or with others, against an institution in court,” the provision would effectively ban even the possibility of arbitration of a claim a student may have against their institution.

Although the PROTECT Act is not really focused on arbitration—the name is an acronym for “Preventing Risky Operations from Threatening the Education and Career Trajectories of Students Act of 2019–it nevertheless includes provisions that can be found in other bills specifically targeting arbitration.

In fact, similar provisions are the entire point of the closely related Court Legal Access and Student Support (CLASS) Act of 2019.  The bill, introduced on Feb. 28 as S.608 by Sen. Richard Durbin, D., Ill., and as H.R. 1430 in the House by Rep. Maxine Waters, D., Cal., was part of a flurry of arbitration bills spearheaded by the FAIR Act of 2019, discussed in the previous CPR Speaks post.

Both the PROTECT and CLASS acts have been referred to committees and await further action.

While all of these bills face a tough climb to passage, the inclusion of such provisions in sector- specific reform bills could contribute to a “normalization” of criticism of arbitration.

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The author, an international LLM student at the Benjamin N. Cardozo School of Law in New York, is a 2019 CPR Institute spring intern.