ContractsProf Blog

Editor: Jeremy Telman
Valparaiso University Law School

Thursday, June 4, 2020

Lawsuits Against Universities for Pandemic-Related Closures

Some students are filing class action lawsuits against their colleges and universities for partial tuition refunds and refunds of other fees. As Jeremy noted last week, some schools have given students refunds. Others, apparently, have not.  But the fees involved are not all the same. The specifics of the lawsuits might differ but basically, the students are arguing that they should get some money back because their educational experience is not what they expected.  Although faculty are trying their darnedest with Zoom and making their voices hoarse with recording and re-recording their lectures, these students say that the distance learning experience pales in comparison to the in-person experience.  We miss our professors, they say, We want them back and their disembodied voice on an audio file or their Zoomed-In-too-close-for-comfort-face is a poor substitute for their classroom presence! 

As this article from Bloomberg notes, the students are unlikely to prevail for a variety of reasons, at least on many of the claims.  But the lawsuits raise lots of contracts issues that warrant more discussion on this blog.   Fees for dining expenses and on-campus housing should be partially refunded because they are essentially prepaid fees that were not provided. 

However, there are often other “services” fees that I think should not be refunded even though students were hustled off campus in early March. Many services were/are still being provided to students even when they moved off-campus, including IT assistance, counseling, and guidance services.  Other fees relate to activities and although clubs are not meeting on campus, many continue to meet or plan future events virtually. 

Furthermore, maintenance services and administrative services continue, even if less frequently for the former and remotely for the latter.  Included in the administrative services are activities which may likely benefit them in the future.  Students understand (or at least they should) that when they enroll at a college or university, they are joining a community.  They are receiving an education but they are also going to be receiving benefits in the future from having attended that university.  There is, of course, the value of the degree.  But there is also the benefit of joining the alumni network, which is quite valuable at some places.  There are also alumni events and activities, including continuing education or special lectures.  The tuition of current students provides funding for some of those activities.

While there is justification for refunding some (although not all) fees, I’m less inclined to think students are entitled to partial tuition refunds and here’s why.

First, most universities don’t make specific promises in their enrollment contracts regarding where or how their courses will be offered.  I also don’t think that most students consider those specifics.  I don't think there is a breach of contract with respect to the education delivery part of it.  I think the student-plaintiffs are confusing the glossy marketing material with the contractual terms.  But the glossy brochures are just that – glossy brochures with happy coeds and engaging professors.  Universities generally don’t give you back your money if it turns out that your roommate is super grumpy and your professor’s droning monotone puts you to sleep.

The contract issue is really one of omitted terms.  The parties did not address what would happen in the event of a pandemic and ensuing state-ordered shut-down of campuses.  For that, we have to go to the squishy world of interpretation.  What did the parties intend when they entered into this agreement?  What was the purpose of the agreement?  The purpose was to provide the students with an education.  Most schools are continuing to do that.  It may not be what the students had in mind, but that’s not the proper question.  The question is, what would the parties have done if they had contemplated this situation?  Would they have insisted upon a partial tuition refund?  And if so, would the schools have agreed to it?

I don’t think so.  If the students insisted, the school might simply have accepted other students. But I also don’t think the students would have insisted upon a partial tuition refund if the choice were to sit out an entire year or attend three quarters of the year on campus and a quarter online (put in equation form, ¾ year on campus + ¼ online OR gap year + graduating one year later from college). Of course, they would have preferred the full year on campus but that wouldn't have been on the table.  Given that, would they have walked away?  Especially knowing that there weren’t other schools willing to give them what they wanted?* 

In addition, without looking at any particular contract, my guess is that most enrollment contracts don’t contain force majeure clauses.  But I don’t think a force majeure clause provides all the answers anyway (even in these pandemic times when they seem to be getting all the attention). 

All tuition payments have already been paid so the students’ performance can’t be excused, after all.  (It would be a different matter entirely if the pandemic occurred at the very beginning of the semester and students wanted to cancel their enrollments for that term.  It’s different b/c the pandemic spread, and schools were ordered closed, three-quarters of the way through the academic year).  The schools are not trying to get out of their contracts; in fact, they are doing whatever they can to perform.  The issue is, are they providing substantially what was bargained for?  My guess is that most are.  At least from this faculty member’s standpoint, we are dancing as fast as we can and putting in at least twice as much time as we typically do preparing for classes.  Many of us are also spending more time with students on Zoom than we would if we were just holding office hours.  I would think most schools are providing substantially similar services as they were pre-shutdown even if the services are virtual.

In any event, I can’t even begin to guess what expectation damages might be. The value of the education can’t be valued pro rata based on number of weeks or hours.  It is also not easy to separate out the portion of the tuition which is simply for the education in the classroom versus the general benefits of attending the college or university.  The same experience that the students are claiming they are not getting is exactly what will make it so hard to calculate damages. 

Ultimately, I think the students should not prevail because the result would be disastrous.  Universities and colleges are already going to be in a world of hurt and partial tuition refunds in this situation would just create a chain reaction of more problems.  Staff and faculty would be cut, services paired back, and financial aid to the next class would be greatly reduced.  I say this, not just as a faculty member, but as a parent who would be getting a hefty chunk of change back if my daughter’s institution issued partial tuition refunds.  But in the long run, I know that it wouldn’t be worth it. 

The fact is, this pandemic has wreaked a lot of damage across the board.  Some have been hurt more than others.  If there’s a great lesson from this pandemic, it’s that we live in a society and our actions affect others.  Society benefits when pains are evenly distributed and when they don’t fall disproportionately on some groups.  It makes sense for those who can, to suffer a little in order to prevent greater suffering for others.  In some cases, this means people stay inside even if they are young and healthy.  In all cases, it means making adjustments to the extent that we are able if it would prevent greater harm in the future.

 

*Note that this is not the same decision faced by students contemplating a gap year for the fall.  The choice for them is 1 year or (.5 year of online learning  gap year+.5 year on campus) OR gap year + graduating one year later from college.

https://lawprofessors.typepad.com/contractsprof_blog/2020/06/student-lawsuits-against-universities.html

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