COVID-19-Related Settlement of College Tuition Awards Students $1.25 Million in Refunds
As the COVID-19-fueled school year comes to a close, one university that failed to honor tuition discrepancies between “campus experiences” and “online experiences” has agreed to a $1.25 million settlement with its on-campus-students who were forced by the pandemic to get their classes online.
The complaint by the class-action plaintiffs at Southern New Hampshire University (SNHU), all of whom registered as on-campus students, was filed in May 2020 and claimed class closures provided them with “subpar” learning experiences that were “in no way equivalent” and therefore shouldn’t cost the same.
Under the settlement agreement, SNHU will issue partial refunds to plaintiff Brianna Wright and members of her class in what is believed to be the country’s first tuition-related settlement of COVID-19-related college student lawsuits. Across the U.S., courts are being flooded with lawsuits from students who want their tuition adjusted because they claim digital learning is far inferior to the education they would receive in lecture halls and laboratories, and by interacting with professors.
There are several unique features to the SNHU suit that may distinguish it from becoming a settlement model. First, SNHU is primarily an online university, with 90,000 distance-learning students and only 3,900 in-person learners. Second, the tuition gap between the two groups is significant, with on-campus students paying $15,378 per semester, while online students paid only $4,800 for five digital courses. According to the plaintiff’s initial complaint, the total cost of a 120-unit bachelor’s degree is $123,024 for on-campus students and only $38,024 for those who learn remotely.
A review of data publicly available on the websites of five other universities that offer both online and on-campus classes, found that tuition for both types of learners is now identical in some colleges and very different in others. The University of Arizona says, “tuition for main campus students remains the same no matter the course modality.” Purdue Global, the online version of Purdue University, has nearly identical tuitions, charging on-campus students just over $600 more than online students. But California Baptist College lists tuition for on-campus students at $34,918 as opposed to online tuition at $16,965. Its website did not have tuition information related to COVID-19 changes.
SNHU’s third difference, according to the complaint, states that SNHU has “admitted that educational services offered online are inferior.” The University’s website for Fall 2020, the semester after the lawsuit was filed, states that it convened a COVID-19 Taskforce and is following its recommendation. For Fall 2020, the semester after the lawsuit was filed, the tuition for all students dropped to $4,800 regardless of their classification.
The university’s website states “SNHU will ensure that no campus student pays more for remote learning in direct tuition costs than the student would have paid to attend in-person classes.” Plaintiffs’ complaint argues that “Even if Defendant did not have a choice in canceling in-person classes, it nevertheless has improperly retained funds for services it is not providing.” In creating a Taskforce and making the suggested changes, the University’s settlement implies agreement.
Plaintiffs’ lawsuit has three counts: breach of contract, unjust enrichment and conversion. The breach of contract count claims plaintiffs suffered damages because they “did not receive the educational services they paid for” after the coronavirus shutdown. It also argues that COVID-19 does not excuse them from an obligation to refund a pro-rated portion of tuition because of the services it did not provide, even if doing so was impossible when the learning became remote.
The university does not believe it breached a contract but said that the settlement agreement is “best for SNHU’s learners.” It was reached after mediation in January 2020 and at the time students indicated a desire to avoid future legal fees and costs, according to a motion indicating preliminary agreement.
In the second count, plaintiffs state they are entitled to a refund because the university received unjust enrichment when it failed to provide them with the type of “education, experience, and services” they paid for. The third count, for conversion, argues that plaintiffs and members of the class have an “ownership right to in-person educational services” that were not provided after the shutdown.
Future cases will likely be class action suits similar to this one because students at most universities will also come from many states, have identical legal and factual situations, and are too numerous to warrant individual suits. Plaintiffs point out that class action vastly decreases the “burden and expense” of individual litigation for both individual students and the court system as a whole. However, class actions may be challenged because majors are different, and some need more campus facilities than others. History classes might be fine in the comfort of home, while biology classes need fully equipped laboratories and specimens for proper instruction.
The SNHU lawsuit is the first one settled, but it will not be the last. In April 2020, students at the University of Miami, Drexel University, Columbia University, Pace University, Cornell University and Michigan State filed class-action suits asking for refunds for services they paid for but did not receive.
An article in the National Law Review by Thomas Wintner and Mathilda S. McGeeTubb last June found that for next year, many colleges are offering discounted tuition, but others are maintaining current rates, despite over 100 class-action lawsuits that have already been filed. The authors cite three criteria that will be used to decide these suits: “(1) what did students pay for and on what terms; (2) have they received something quantifiably less than that; and (3) is there any way to answer these questions on a class-wide basis or using a class-wide model?”
Universities may be able to defend against student claims on the basis of impossibility or impracticability, and courts may defer to academic judgment to determine the equivalency of in-person vs. online learning.
These lawsuits are especially challenging under current economic conditions and the challenges of designing new delivery methods which require extensive faculty training and implementation. Universities are businesses, and students are consumers. The decisions made by both during the pandemic will ultimately be scrutinized by the courts that will try to determine if the students got what they paid for and whether universities took every possible action to assure that they did at a fair price.
