Trenton – In an effort to curb forced arbitration, the Senate Higher Education Committee approved legislation today which would withhold state funding from institutions of higher education and employment training with mandatory arbitration agreements or class-action lawsuit waivers. The bill is sponsored by Senate Education Chair M. Teresa Ruiz.

“We have a responsibility to our students to ensure we are only funding high quality colleges and universities with transparent practices,” said Senator Ruiz (D-Essex). “This legislation will prevent the state from funding institutions who require students to sign forced arbitration agreements that they may not fully understand or want to sign.”

The bill, S-1851, would deem education institutions ineligible for state funding if they require students to sign enrollment contracts that include forced arbitration or other clauses that require students to waive their right to participate in a class action lawsuit.

The bill is modeled after an Obama-Era protection, which Secretary of Education Betsy DeVos has rescinded. The federal protection expired on July 1, 2020.

The bill was released from committee by a vote of 4-0.