H.R. 3938 — CLASS Act of 2025

This section makes chapter 1 of title 9, United States Code (i.e., the Federal Arbitration Act), inapplicable to enrollment agreements between a student and an institution of higher education (IHE), as defined in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002). An enrollment agreement is any contract under which a student makes a financial commitment to an IHE in exchange for enrollment in a program of study. (Thus, arbitration clauses in such agreements are not enforceable in federal court under the act.)

This section prohibits institutions of higher education from requiring students to agree to, or enforcing, any limitation or restriction—including on choice of applicable law, jury trial, or venue—on a student's ability to pursue a claim against the institution in court, individually or with others, as a condition of eligibility to participate in federal student aid programs under Title IV of the Higher Education Act of 1965.