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Covid-19 Crisis: Angry Undergrads Suing Colleges For Billions In Refunds

College students, kicked off campus by coronavirus, have a new extracurricular activity: litigation.

United States undergraduates have sued more than 50 schools, demanding partial tuition, room-and-board and fee refunds after they shut down.

The proliferating breach-of-contract suits, many of them filed over the last week, target some of the biggest names in higher education: state systems including the University of California and Arizona State, as well as private institutions such as Columbia, Cornell and New York University.

The students’ lawyers, advertising on sites such as Collegerefund2020.com, are seeking class-action status on behalf of hundreds of thousands of students. While legal experts say the lawsuits face high hurdles, they could potentially involve billions of dollars in claims.

To justify annual prices that can top $70,000 a year, colleges have long advertised their on-campus experience, including close contact with professors and peers who will become a lifelong network. Now, millions of students are instead studying online.

Many of the suits are seeking compensation for the difference in value between the virtual and in-person experience. Plaintiffs include Grainger Rickenbaker, a freshman majoring in real estate management and development at Philadelphia’s Drexel University, which charges more than $50,000 in tuition and another $16,000 in room, board and other fees.

“I am missing out on everything that Drexel’s campus has to offer — from libraries, the gym, computer labs, study rooms and lounges, dining halls,” said Rickenbaker, 21, who is suing for a partial refund as he works remotely from his home in Charleston, South Carolina.

Most colleges declined to comment on the lawsuits. The California State System said it would defend itself against a complaint that understates the services it’s still providing. Arizona State said it was giving a $1,500 credit to all students who moved out of university housing by April 15.

Peter McDonough, general counsel for American Council on Education, a college trade group, said schools are battling circumstances outside their control. They’re putting tremendous time and resources into supporting remote learning, while still paying professors and bearing other costs, he said.

“Faculty and staff are literally working around the clock,” McDonough said. “We’re in the middle of a catastrophe. Schools are doing their best to work their way through it.”

Some colleges, including Harvard, Columbia, Middlebury, and Swarthmore, have agreed to refund unused room and board. Others are offering credits or haven’t decided what to do, according to Jim Hundrieser, a vice president at the National Association of College and University Business Officers.

Payments can add up. Small residential institutions, for instance, may be refunding $2 million to $3 million, while large schools with several thousand on-campus students are likely to return $8 million to $20 million or more, Hundrieser said. For individual students, the funds can be quite a boon in an economic crisis. A college charging about $8,000 for a semester’s room and board that cancelled midway might be sending students a check of about $4,000.

The federal suits vary in their demands. The Anastopoulo Law Firm in Charleston represents students at roughly a dozen schools, including Drexel, and is seeking a partial return of all unreimbursed payments. In its suits on behalf of California public college students, Chicago-based DiCello Levitt Gutzler is asking only for the return of student fees for such items as transportation and student organisations, which can nevertheless total thousands of dollars a year.

Both the University of California and the California State systems have already agreed to return unused room-and-board. Cal State said it’s still providing services, such as counseling, and will refund fees “that have been unearned by the campus.”

However the complaints are decided, they highlight the stakes for the $600 billion-plus a year higher education industry. Public universities rely on tuition and fees for 20 per cent of their total revenues; private non-profit colleges, 30 per cent, according to the most recent federal data.

In the fall, if many schools open only online, they would forfeit room and board fees and face pressure to charge less tuition.

Colleges can expect to see more suits soon, threatening what attorney Anthony Pierce called “an economic tsunami.”

(Source: Bloomberg)

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