Justice for Student Borrowers Act

To amend title 9 of the United States Code to prohibit predispute arbitration agreements that force arbitration of disputes arising from private education loans, and for other purposes. 1. Short title This Act may be cited as the Justice for Student Borrowers Act 2. Purpose The purpose of this Act is to— (1) prohibit private educational lenders from using predispute arbitration agreements in their private education loans; and (2) to prohibit private educational lenders from using predispute joint-action waivers in their private education loans. 3. Arbitration of private education loan disputes (a) In general Title 9 of the United States Code is amended by adding at the end the following: 4 Arbitration of Private Education Loan Disputes 401. Definitions. 402. No validity or enforceability. 401. Definitions In this chapter— (1) the term private education loan (2) the term predispute arbitration agreement (3) the term predispute joint-action waiver 402. No validity or enforceability (a) In general Notwithstanding any other provision of this title, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a dispute relating to a private education loan. (b) Applicability (1) In general An issue as to whether this chapter applies with respect to a dispute shall be determined under Federal law. The applicability of this chapter to an agreement to arbitrate and the validity and enforceability of an agreement to which this chapter applies shall be determined by a court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator. (2) Collective bargaining agreements Nothing in this chapter shall apply to any arbitration provision in a contract between an employer and a labor organization or between labor organizations, except that no such arbitration provision shall have the effect of waiving the right of a worker to seek judicial enforcement of a right arising under a provision of the Constitution of the United States, a State constitution, or a Federal or State statute, or public policy arising therefrom. . (b) Technical and conforming amendments (1) In general Title 9 of the United States Code is amended— (A) in section 1 by striking of seamen, interstate commerce, of individuals, regardless of whether such individuals are designated as employees or independent contractors for other purposes (B) in section 2 by inserting or as otherwise provided in chapter 4 (C) in section 208— (i) in the section heading by striking Chapter 1; residual application Application (ii) by adding at the end the following: This chapter applies to the extent that this chapter is not in conflict with chapter 4. (D) in section 307— (i) in the section heading by striking Chapter 1; residual application Application (ii) by adding at the end the following: This chapter applies to the extent that this chapter is not in conflict with chapter 4. (2) Table of sections (A) Chapter 2 The table of sections of chapter 2 208. Application. . (B) Chapter 3 The table of sections of chapter 3 307. Application. . (3) Table of chapters The table of chapters of title 9, United States Code, is amended by adding at the end the following: 4. Arbitration of private education loan disputes . 4. Effective date This Act, and the amendments made by this Act, shall take effect on the date of enactment of this Act and shall apply with respect to any dispute or claim that arises or accrues on or after such date.

Summary: Justice for Student Borrowers Act This bill prohibits a predispute arbitration agreement from being valid or enforceable if it requires arbitration of a dispute relating to a private education loan.