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Beth Akers: Students Clash With Colleges Over Refunds for Semesters Lost to Coronavirus

When the Covid-19 crisis hit hard in mid-March, colleges and universities were among the first institutions to take dramatic action, closing campuses and sending students away to complete their studies online for an indeterminate amount of time. What seemed like a bold move at the time has proven prudent, as the pandemic continued to rage throughout what would have been a potentially calamitous spring semester for students, faculty, and staff working and sometimes living in close quarters.

Most colleges and universities quickly offered students refunds of living and meal expenses along with fees designed to cover student activities that could no longer take place. But for the most part, colleges didn’t offer refunds on tuition on the basis that students would still be receiving credits toward their degrees for the coursework that they would now be able to complete online.

But many aren’t content with this financial arrangement and have brought suit against colleges to return more of their money. The number of lawsuits is now in the dozens, with defendants ranging from entire university systems in California, Florida, North Carolina, and Arizona to private nonprofit colleges and universities like Pace and Columbia. The plaintiffs contend that the money they paid, sometimes upwards of $25,000 for a semester at places like Columbia, was meant to pay for an in-person college experience, not a virtual one, and that the hastily crafted online substitute fell short of delivering the agreed-upon educational experience. Colleges, of course, are taking a different position, perhaps only in an effort to shore up their soon-to-be-precarious financial situations. As the chancellor of the University System of Maryland recently told a Washington Post reporter, “When people pay tuition, they are paying for credit, and ultimately, for a degree.” The implied notion is that education can be boiled down to credits and degrees.

But this position represents a sharp pivot from the usual position of those who run colleges, especially elite, high-cost ones, which boast immersive on-campus experiences that contribute significantly to the value of the education they provide.

This contrast invites current and aspiring students to take a closer look at what they are really paying for. Is it true that the immersive, high-cost experience sold on the glossy pages of college brochures can be readily replaced with Zoom calls with faculty from kitchen tables and home offices, sometimes with small children underfoot?

The answer is surely no. And the efforts by colleges to defend that position ring somewhat false since the majority of them can’t afford the refunds that could come due if they said otherwise.

By taking this position, colleges are undermining the message that has succeeded in allowing them to charge ever-increasing amounts for these sometimes luxurious college experiences. The notion that higher education can be boiled down simply to education is a threat to their long-term business model.

Courts will likely decide in favor of the colleges, which have the advantage of what's called "judicial deference to academia," a concept that allows colleges more autonomy from court interference than is granted to other types of institutions. And as Deborah Hensler, a law professor at Stanford Law School, told NPR, the “legal principle of force majeure means that a totally unforeseen event, like an act of God or a global pandemic, tends to void a contract.” But it is students who will decide whether the cost of the immersive college experience will continue to be worth its price tag.

Courts will likely put these lawsuits to bed soon, but the tension over what makes education valuable will continue to simmer throughout the fall semester. Many colleges and universities are making plans to offer hybrid models of education that combine in-person experiences with online education in order to minimize the potential spread of another Covid outbreak. Unlike the hasty shift to online seen in the spring, this is a model that’s likely to deliver a higher quality academic experience for students. But it will call into even greater question the value of the gold-standard, in-person experience that has been the rationale for hefty price tags for decades. Professor Miguel Urquiola speculated in a recent interview that this unbundling of services – doing away with the opportunity to meet a future spouse in the dining hall or library, for instance – may encourage students to rethink their consumption of educational services in a way that threatens the business model of the immersive experience, especially for elite colleges. Without a relatively quick return to normalcy, colleges and universities will be forced to adapt, which, in the best-case scenario, will make available to students some lower-cost ways to access quality higher education.

Beth Akers is a senior fellow at the Manhattan Institute and a former Council of Economic Advisors economist. Follow her on Twitter here.

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Posted: June 8, 2020 Monday 09:04 AM