The Coronavirus pandemic has unfortunately led to the cancellation of classes and the closure of campus facilities across the United States, leading to a great migration of college-age-children to their childhood homes. As a parent, I was pleased to see my son return safely home. Thereafter, my thoughts quickly returned to the financial realities associated with shutdown of the economy and declining investments. More to the point, his return made me wonder about a refund from his university.
A university education is fabulously expensive for most families and a significant financial commitment. In addition to the tuition, there are significant bills for room and board. Beyond these costs, universities levy a myriad of mandatory fees and charges that are paid prior to admission. These vary from university to university and are known by different names but may include;
- activities fees
- lab fees
- speaker fees
- publication fees
- student life fees
- orientation fees
- freshman fees
- Greek life fees
- “Green Fees”
- Campus Spirit Fees
- Tech fees
- Transportation fees
- Athletic fees
- Health fees
- Commencement Fees
Room, Board, and Fees
Setting aside tuition for the moment, the closure of campus facilities means that the university is no longer providing the goods or services that were promised in the enrollment contract. A refund of the charges is clearly appropriate, but universities have not adopted a standard approach to the issue. Some are voluntarily offering a refund. Others are offering credits against future charges. And some are simply remaining silent.
The first step in analyzing your position relative to a refund is a review of the enrollment contract with the university. This contract will generally list the charges for the year including any fees. Assuming it does not contain any unusual clause excusing a refund, the next step is reviewing all payments made to the university to determine which fees should be included in the refund request. At this stage, you may also want to consider calculating a pro rata reduction in the refund based upon the date the campus was closed. The final step is contacting the university and making a formal request for a refund.
It is important to let the university know of your expectations. Considering that many reputable universities that have already offered refunds, it is likely that more will follow suit, if for no other reason than to keep up with their competitors. To the extent that they do not, the facts suggest that students have a solid cause of action around the university’s breach of contract relative to room, board, and student fees.
Tuition
Unlike room, board, and fees, most universities will continue to provide the agreed-upon services relative to tuition. They have set up for distance learning solutions in order to complete the second semester classes, often after an extended spring recess. The university will argue that they are continuing to provide the agreed-upon services relative to academic instruction. And while this may be true in part, the fact remains that the student does not have the advantage of live instruction. Moreover, the student is unable to meet with, and learn from, professors in settings outside the classroom.
I believe that even the university would admit that the student is receiving a product of lesser quality than he/she would receive on campus. University promotional materials regularly highlight the student-to-faculty ratio and student access to the faculty. These advantages are effectively eliminated in a distance learning scenario.
It’s up to each family to decide how hard they wish to push on this issue. Much of the decision may depend on the success of the distance learning experiment and the expected matriculation of the student. Regardless of whether a refund for tuition is ultimately requested, the elimination of face to face instruction should be part of the overall refund discussion.
Refunds Regarding Financial Aid
Although numbers vary, many colleges highlight the fact that 70% of the student body is receiving one form of financial aid or another. The specific nature of the financial aid may have a direct bearing on the refund amount. It may not be logical to ask a university to refund a student from a grant provided by the University. However, if loan money was used to pay the University for room and board, there is no reason why it should not be refunded to the student. Similarly, there is nothing to prevent the university from refunding money paid by third party funders of the student’s room and board.
Other Housing
A related issue involves housing charges that are not necessarily connected to the university. Many students are tenants in apartments on or off campus owned by private entities. Once the school cancels classes, the students have no further need for the apartments. As with the universities, landlords have no standard way of dealing with the Coronavirus shut down.
There are stories of landlords excusing rents in reaction to crisis, but one suspects that this is the exception rather than the norm. Instead, landlords are more likely to insist that rent is paid pursuant to the terms of the lease. Options in this regard are somewhat limited. A call to the landlord with a request for a discount on remaining rents may be worth the effort.
A more radical solution involves withholding rent and forcing the landlord to negotiate or bring legal action. If the lease is otherwise valid, the chances for prevailing as a matter of law is low but the litigation process often presents opportunities to reach a negotiated resolution.
The foregoing is not formal legal advice but is offered as a high-level overview of the college refund issue and COVID-19.
