CLASS Act Blocks Forced Arbitration in College Contracts, Restoring Student Right to Sue

The Court Legal Access and Student Support Act of 2025, or the CLASS Act, is making a significant change to how students can seek justice against their colleges. This bill essentially bans the use of mandatory arbitration clauses in student enrollment agreements for any institution that receives federal student aid money. If passed, this means students would retain their right to sue their school in a public courtroom, whether individually or as part of a class action lawsuit, instead of being forced into private, often confidential, arbitration.

The Fine Print: What’s an Enrollment Agreement?

Section 2 of the CLASS Act cuts straight to the chase by declaring that existing federal arbitration law (Chapter 1 of Title 9) won’t apply to enrollment agreements between students and qualifying colleges. The bill defines an enrollment agreement simply as any contract where a student agrees to pay the school for a course of study. Think of it as the stack of paperwork you sign before that first tuition bill hits your inbox. For a student who feels they’ve been wronged—say, by a misleading program description or a tuition dispute—this change removes a major roadblock to seeking legal recourse.

Back to Court: Ending the Ban on Lawsuits

Section 3 locks this protection in by amending the Higher Education Act of 1965. It mandates that any college receiving federal funding cannot require a student to sign away their ability to sue the institution. This is a big deal because mandatory arbitration clauses, common in many consumer contracts, often prevent individuals from joining class action lawsuits. For example, if hundreds of students were impacted by the same issue—like a sudden, unannounced program closure—this provision ensures they can collectively pursue a claim in court, rather than each being forced into an expensive, individual arbitration process that often favors the institution.

Who Feels This Change?

For current and future students, this bill is a clear win for consumer protection. It levels the playing field, making colleges more accountable when disputes arise over tuition, accreditation, or program quality. If a college messes up, they can’t hide behind a mandatory arbitration clause that was tucked away in the enrollment paperwork. However, for the institutions themselves, this means an increased risk of public litigation and potentially higher legal costs. They lose the efficiency and privacy that private arbitration often provides. This trade-off is central to the bill: moving disputes from private, closed-door processes to public, open courts.

When Does This Kick In?

Don't expect these changes to happen overnight. Section 4 specifies a one-year delay from the date the bill becomes law before any of these new rules take effect. This waiting period gives colleges a full year to update their enrollment contracts and internal compliance procedures before the new student rights kick in. For anyone planning on enrolling in the next year, you’ll want to check your school’s updated policies once this bill is fully enacted.