Colleges and Universities Sued for Tuition Refunds in the Wake of Coronavirus Response

April 28, 2020

Trying to do their part to stop the spread of COVID-19, most colleges and universities have closed their campuses to students. Enrolled students who were once living and learning among their peers, attending in-person lectures from professors and accessing schools’ state-of-the art facilities, are now learning remotely. Many colleges and universities have reimbursed students for room, board and other fees tied directly to on-campus services. But institutions of higher learning for the most part have resisted refunding tuition.

Apparently displeased with this approach, students enrolled at several colleges and universities, including University of Miami, Drexel University, Pace University, and Columbia University, among others, have filed class action lawsuits seeking reimbursement for themselves and similarly situated students for tuition and other fees as a result of the shift to online coursework. These lawsuits generally sound in contract or quasi-contract, and allege that remote education is materially different than what the students bargained for in accepting admission to these institutions. Online lectures and virtual office hours, they claim, are not as valuable and are less effective, than the live, face-to-face lectures allegedly paid for by tuition, and schools which retain full tuition have breached the contract or been unfairly enriched to they so. The complaint filed in Federal court against Columbia can be found here.

The questions likely to determine the outcome of these suits are – what is the nature of the relationship between college and student and what does a college promise in return for tuition? The plaintiffs claim they have been denied the essential college experience they paid large amounts of money to receive. But is that really what they have been promised?

The dynamic of students and their institutions of higher learning involves something more than a mere arms’ length transaction. Indeed, colleges and universities have been held to stand in the shoes of students’ parents or guardians – in loco parentis – in some legal contexts. Paying tuition to attend a college or university is therefore fundamentally different than other commercial contracts. The college does not guaranty to provide a specific experience or result. Rather, the institution instead promises that they will make their best efforts under the circumstances to provide students an opportunity to develop and learn in the chosen field of study. It is up to the student that they make of that opportunity. Colleges should be able to present a compelling narrative they have done their best under these unprecedented circumstances and should not solely burdened by the heavy costs of the pandemic.

Institutions of higher learning will have a strong defense that there is no breach or unjust enrichment because the students continue to receive all the material benefits for which tuition is intended to compensate. In the same way they would have if still on campus, all students continue to have the opportunity to attend classes. The courses remain based on a syllabus and materials pre-selected by the school’s hand-picked faculty with specialized knowledge of the course subject matter. Students also are still receiving regular lectures from the same college faculty who would have taught them in-person on campus. To the extent colleges and universities have arranged for live online classes and office hours, students also continue to have the same real-time access to their professors, with the same opportunity to ask questions and analyze the material as they would have had in a classroom setting.

Importantly, the actual costs to colleges are unlikely to have decreased since the shift to online learning. Most professors continue to get paid their full salaries notwithstanding that they are teaching remotely. Colleges and universities still have other operational costs to keep courses going. In fact, in some cases college’s operating costs may have actually increased as a result of COVID-19, including for example for technology upgrades to online learning or hazard pay to certain employees. If colleges and universities can establish these types of facts, then it will be difficult for the student-plaintiffs to meet their burden to provide that the colleges and universities have breached or have been unjustly enriched by retaining full tuition. As a result, colleges have a good chance of prevailing in these suits.

But there are implications of coronavirus beyond these litigation matters. Colleges and universities may wish to consider how pandemic-induced remote learning may affect the market going forward. Many people so far have been willing to pay a premium for the on-campus experience schools provide, including for example access to multi-million-dollar gyms, libraries, research labs, dorms, etc. But there also has been a push for some time to reduce college costs. Will people start to demand an online version of school from schools that have traditionally refused to do so? And will they expect to pay less for online school as a way to reign in what is perceived as overpriced higher education?

Would the on line version be a different degree? Or limited to certain majors? If those alternatives are not available, will demand be affected? If so, will colleges be forced to lower their prices? Or will the lack of an online alternative affect the diversity of student bodies, where only rich, highly educated, elites are able to afford on-campus only colleges?

Might this global pandemic have taken some of the stigma out of on-line learning for it to become a regular option for more traditional schools who need to increase revenue but had been hampered by limited capacity up to now? Might the success of online learning create a system where students could apply for “on campus” or “online” learning, or both, and get accepted for one or the other. Might this be a way for colleges to increase enrollment, decrease tuition, and make even more money?

The point is that none of us knows how COVID-19 will affect the future. That is true in the context of higher education, too. The debate over tuition refunds might actually present an opportunity for colleges and universities to develop new ways of maximizing tuition to best educate their student bodies after coronavirus.