Student Lawsuits Seeking Refunds of Tuition and Fees Grow in Popularity. But Is There a Case?

By Owen Daugherty, NASFAA Staff Reporter

“I didn’t pay to attend Zoom” has become a common refrain heard from disgruntled students in online petitions and on social media, as they are forced to finish the academic year from home with virtually every college campus shut down due to the ongoing COVID-19 pandemic.

As such, students have filed lawsuits against dozens of schools, demanding refunds from their respective institutions after shifting to online-only learning, saying essentially that they have not gotten what they paid for.

The class action lawsuits are now filed against a wide range of higher education institutions, from Ivy League universities such as Brown University and Columbia University to large public state schools including Pennsylvania State University and the University of Colorado-Boulder.

At the heart of the lawsuits is a debate over whether students are getting the same education online as they would with on-campus instruction, along with a host of other collegiate offerings. The lawsuits generally claim that universities broke federal laws in continuing to charge for tuition, fees, and room and board while profiting financially.

There are two distinctly different types of lawsuits being filed — one calling for a tuition refund and another seeking compensation for services no longer provided, such as a return of student fees or parking costs, along with pro-rated room and board for the period of time students were no longer on campus, said Michael A. Olivas, a higher education law expert and former professor at the University of Houston.

Olivas said there are valid claims in seeking refunds for lab and instructional fees, noting  “universities actually have been a little bit more open in that regard to giving some refunds.”

Penn State, for example, said it would reimburse students for half a semester of room, board, and meal plan costs, but would not issue partial refunds for tuition. The plaintiffs in that lawsuit called attention to the university’s online degree program, “World Campus,” which existed before the pandemic. Although the university advertises its online degrees and certificates as “the same one that our on-campus students receive,” it charges thousands of dollars less in tuition, the lawsuit claims. 

“This means that even before the COVID-19 pandemic, Defendant acknowledged the value of an online education being worth between 44% and 80% less than the same degree earned on a physical campus,” the lawsuit argued.

Those seeking a tuition refund are in a completely different camp, Olivas said. Institutions rebuffed students’ requests for tuition refunds due to the fact they continued providing instruction remotely, he added.

In an op-ed published in The Washington Post, Mark Shaffer, an attorney and father of a George Washington University student, laid out why he filed a class action lawsuit against the school, saying his daughter was attracted to the school by “promises of an extraordinary on-campus experience.”

“For six semesters as an undergraduate, and then a seventh in pursuit of a master’s degree, my daughter enjoyed the promised experience that our family paid for,” he wrote. “Yet this semester is different.”

There is no legal precedent for such a claim since schools are still upholding their end of the contract, argues Peter McDonough, vice president and general counsel for the American Council on Education.

For the “breach of contract” legal argument to be made, “there needs to be a finding based on evidence that there was harm, that there was a diminution of value in that experience. Not just that it was different,” McDonough said.

The lawsuit against Columbia, for example, contends that the school’s decision to use pass/fail grading systems this semester will diminish the value of the degrees they offer.

“Everybody has different experiences during the course of a school year than what they expected when they arrived,” he said. “The difference here is that everybody's different experience was different in the same way.”

And while the online-only instruction schools are providing ranges from detailed video instruction to simply uploading assignments, students argue the price tag is not worth what they are receiving.

“Would you pay $75,000 for front-row seats to a Beyoncé concert and be satisfied with a livestream instead?” an MBA student at Northwestern University asked in an opinion piece in The Wall Street Journal, which solicited views from students regarding refunds. “It doesn’t make sense for universities to charge full price while delivering a fundamentally different product than their customers paid for.”

Those seeking lawyers and firms to represent them have had little issue finding one. Olivas said the lawsuits are being marketed by firms seeking to represent the students. To that point, the Anastopoulo Law Firm created collegerefund2020.com to advertise its services to students.

“Are you a college student who was forced to leave campus? You may be entitled to compensation,” the website run by the Charleston, South Carolina-based firm reads. The law firm is currently representing students in lawsuits against at least three schools. The Anastopoulo Law Firm did not respond to multiple requests for comment.

Another firm, Hagens Berman, is representing students in complaints against at least eight schools, alleging “these institutions are continuing to receive millions from students despite their inability to continue school as normal, or occupy campus buildings and dorms.”

Some of the lawsuits have argued that schools are making more money as students are off campus and learn remotely. The University of Colorado-Boulder, for example, is facing claims that it is receiving “unjust enrichment” from tuition and fees that won’t go toward services that directly benefit students.

But McDonough said that an “unjust enrichment claim” couldn’t be further from the truth. Schools are still paying for staff, administrators, and buildings costs — all things that make up a significant portion of their budgets, as well as the additional costs of shifting to online learning, he said.

“There is not a campus in America that has been unjustly enriched by sending students home in the middle of the semester, and reimagining the remainder of the semester, and then making it a reality. The reality is this unprecedented financial crisis snuck in like a tsunami. Budgets are in shambles,” McDonough said.

He added that it’s somewhat disappointing that students and law firms are taking advantage of the situation when institutions are suffering financially, with state budget cuts and fears that fall enrollment will suffer a sharp decline.

“Any folks who claim that a school has been unjustly enriched by this catastrophe are wildly out of touch with higher education and the fiscal reality of higher education,” McDonough said.

 

Publication Date: 5/19/2020


Amber Y | 6/9/2020 9:1:48 AM

After a lady was able to sue McDonald's over hot coffee... would you expect anything less from American's?

Tony L | 5/19/2020 12:41:50 PM

The colleges were going to get sued no matter what they did.
Option 1: No changes to course offerings for the Spring and finish as normal (in class)--SUED because the school was callously disregarding the students' safety! Option 2: Go online--sued because FOR EIGHT WEEKS the student wasn't "getting what they paid for"...this was by far the most prudent option for the school, btw short of cancelling classed totally...which brings us to:
Option 3: cancelling classes right after Spring Break--students would not have gotten credit for those courses that they paid for, OR they could have gotten the grade they earned as of March 13...either one was not a desirable outcome for either the student or the school...Americans are just "sue happy"...is it not enough they're getting Emergency Relief funding???

Mark K | 5/19/2020 11:51:37 AM

There is a characteristic difference between the lawsuits concerning room and board (and parking fees, athletic fees, lab fees, etc.) and the lawsuits concerning tuition.
With room and board lawsuits, the cases are clear-cut. You can't charge for a product or service that you are not providing. Moreover, most of the housing agreements do not have exceptions for pandemics (involuntary removal from the dorms is usually limited to conduct reasons), putting the colleges in breach of contract. Colleges that provide refunds as vouchers or credits will also be sued and lose because they do not make the families whole.
But, while a lawsuit concerning tuition can establish a qualitative difference, they need to establish a quantitative difference to assert damages. Except at colleges that charge less for online education or where classes were cancelled, that will be difficult.

Amy C | 5/19/2020 10:7:19 AM

In some cases, online tuition is more expensive than on campus tuition. I agree that students are being impacted but so are faculty and staff. Colleges have basically had to change everything for the spring and potentially for summer and fall semesters. The pandemic may even impact semesters after Fall 2020. Although distance education has been around for a while, it may become the new normal for higher education.

Matthew S | 5/19/2020 8:17:58 AM

Just another example of the fact that there are too many lawyers in this world with too little to do! This pandemic has disrupted all of our lives and we are all just trying to make the best of a very bad situation. Is it ideal? No, but that is no justification for a lawsuit!

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