Amid wave of lawsuits, experts say students unlikely to see tuition refunds

More than 50 U.S. colleges and universities are facing lawsuits from undergraduate students demanding partial tuition, room-and-board, and fee refunds following COVID-19-related campus closures and the switch to online classes, Bloomberg reports. However, economists and other experts say that students are unlikely to get their tuition money back for the spring semester.

Lawsuits seek compensation for difference between in-person, virtual classes

The growing wave of lawsuits—and of class-action lawyers seeking additional plaintiffs—assert that virtual instruction is an inadequate substitute for in-person learning, according to the Associated Press.

“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,” Grainger Rickenbaker, a freshman at Philadelphia-based Drexel University, told Bloomberg. He is currently taking courses online from his home in Charleston, South Carolina, and is a plaintiff in a class-action case seeking compensation from the private university, whose tuition runs more than $50,000.

Other breach-of-contract lawsuits target state schools, including the University of California system, as well as private institutions like Cornell and Columbia universities. Saying that schools shouldn’t receive money for services they didn’t provide or that those services have diminished in value, some of the lawsuits seek a partial refund on all spring payments; others focus just on specific student fees. “While legal experts say the suits face high hurdles, they could potentially involve billions of dollars in claims,” Bloomberg writes.

Colleges’ costs haven’t decreased, economists point out

Many institutions, including Georgetown University, have already credited students’ accounts for unused on-campus housing and meal plans. However, refunds for spring tuition remain unlikely for a variety of reasons, economists and higher education experts say.

To start, many colleges have actually seen their costs increase since the pandemic began. Schools are spending more money to facilitate the transition to online learning and still must pay faculty salaries and benefits. The workload for some staff, such as counselors and advisors, has increased, as has the burden on instructors scrambling to move their courses online. “Faculty and staff are literally working around the clock,” said Peter McDonough, general counsel for the American Council on Education. “We’re in the middle of a catastrophe. Schools are doing their best to work their way through it.”

Moreover, even though there are few people on campus, dorms and campus buildings still need to be maintained. “It’s not like they’re going to rent out the buildings,” Sandy Baum, a senior fellow at the Urban Institute, told Quartz. “People have this idea that it must be cheaper to teach online than to teach at a brick-and-mortar school. It’s not cheaper to do high-quality online education.” 

A complicated calculation with significant implications

Further complicating matters: How would institutions even calculate the change in value? Who should pay the refund? And at what cost to institutions’ stability and future students’ educational experience?

Experts estimate that COVID-19 has put approximately one-fifth of U.S. colleges and universities on shaky financial footing; some institutions simply cannot afford to hand out refunds. “A lot of colleges are really totally tuition-dependent,” says Sandy Baum, a senior fellow at the Urban Institute and former professor of economics at Skidmore College. “Some of them are not gonna make it.” Even universities with massive endowments aren’t able to simply draw from them, given restrictions on funds’ use or illiquid investments, The New York Times points out.

Economists, meanwhile, say the fall is likely to bring a whole new dimension to the tuition conversation if online learning continues and supply outpaces demand. “I think there’s going to be a lot of discounting from conventional sticker prices,” Rich Vedder, a professor emeritus of economics at Ohio University, told Quartz. Ultimately, the Times writes, “we’re just getting started here. And with so much uncertainty ahead, the refund skirmish is a mere preview of the pointed questions that families will need to ask very soon.”

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