Ruiz Introduces Legislation to Curb Forced Arbitration in Educational Enrollment Contracts

Trenton – Senator M. Teresa Ruiz introduced legislation today to withhold state funding from institutions of higher education and employment training with mandatory arbitration agreements or class-action lawsuit waivers.

“New Jersey is one of the most generous states in the country in supporting our students in higher education and workforce development programs.  It is our job to ensure that the programs we fund meet the highest quality standards and help students achieve their career goals,” said Senator Ruiz (D-Essex). “The State cannot provide this critical oversight solely on its own. This bill ensures that the State is only financially supporting programs that promote a transparent process for resolving disputes and settling complaints, which is critical for identifying red flags and rooting out bad actors.”

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.

“While Washington continues to side with predatory schools and student loan companies, Senator Ruiz’s bill takes a critical step to protect New Jersey students and state resources,” said Tariq Habash, Head of Investigations at the Student Borrower Protection Center. “When schools operate with transparency and public accountability, they are safer options for students.”

The bill is modeled after an Obama-Era protection, which Secretary of Education Betsy DeVos has rescinded.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