COVID-19 Tuition and Fees Related Refunds: 5 Ways to Insulate Your Institution from Reimbursement Litigation

6 min

Higher education institutions across the country are currently grappling with one major question in anticipation of reopening in the fall of 2021: What do they do about students who refuse to receive the COVID-19 vaccination? It is no secret that the COVID-19 vaccination has been met with skepticism across all generations, with many opting to forgo the vaccine altogether. As higher education institutions consider requiring mandatory vaccinations for their students, schools may face litigation from students who are prevented from attending in-class learning as a result of their refusal to get the COVID-19 vaccine. This quandary has led to a proliferation of lawsuits seeking reimbursement of tuition for individuals who feel forced to forgo live education based on this choice. In this alert, we review the current state of tuition reimbursement litigation and discuss ways higher educational institutions can insulate themselves against these inevitable legal battles.

What We Are Learning from Tuition Reimbursement Litigation Arising from the Pandemic

Over the past year, higher education institutions across the country have faced class action lawsuits from students and parents/guardians as a result of forced closings and online or hybrid course offerings. These cases typically rest on a breach of contract theory that institutions deprived students of the benefit of the bargain, while continuing to charge them the same tuition. Plaintiffs seek refunds of tuition and related fees associated with the typical on-campus experience, arguing that they should not have to pay for what they do not receive. Plaintiff classes seeking to recoup tuition typically argue that the institution's representations made to students through its websites, publications, catalogs, marketing materials, and other public-facing resources create an enforceable contract promising students an in-person education and that online learning deprived them of integral items that tuition is meant to cover: use of facilities, interactive learning, labs, research experiences, and other on-campus services that support their educational curriculum, none of which can be replicated online.

The distinction between general claims seeking full tuition reimbursement versus claims related to fees for specific amenities and services, such as room and board and health services, is increasingly important in these lawsuits. While tuition reimbursement claims are less likely to pass the motion to dismiss, most fees for specific amenities claims have been successful in moving to the discovery phase. The developing case law in these suits dictates that only claims based on specific, objectively measurable promises make for viable claims. Claims for reimbursement based on vaguer concepts of a "lesser" education may not be viable. In contrast, students who seek to recover certain fees based on a denial of promised on-campus services like room and board, health services, and meal plans may gain more traction in lawsuits if they can point to a specific promise in an institution's marketing materials for such services that they were denied because of the pandemic.

Ways to Insulate Your Institution Against Tuition Reimbursement Liability

There are many ways in which a higher education institution can preemptively mitigate its risk of tuition reimbursement lawsuits, including:

  • Consistent messaging. Review institution publications to ensure there are no specific promises to students in course catalogs, transfer credit policies, statements of academic principles, or other marketing materials. For example, lofty language in brochures stating, "A small, beautiful place. See for yourself" is not specific and has been interpreted as not constituting a promise of an in-person experience. Burt v. Board of Trustees of the University of Rhode Island, 1:20-cv-00191-JJM-LDA. Similarly, "Columbia is an in-person kind of place" was deemed to be puffery and not contractually binding. In Re Columbia Tuition Refund Action, 20-CV-3208 (JMF). In contrast, promising the benefits of residential life as part of a program survived one upstate New York university's motion to dismiss, as did promising students that they would work in the faculty members' labs and enjoy the campus's top-notch technology and computing facilities. Ford v. Rensselaer Polytechnic Institute, 1:20-CV-470. Also, language on a course registration portal stating "taught with only traditional in-person, on-campus class meetings" was enough to survive another university's motion to dismiss. Marbury v. Pace University, 20-CV-3210 (JMF).
  • Reservation of Rights. Include an express reservation of the right to unilaterally alter the administration of the academic and non-academic services everywhere that services are advertised. Courts have ruled that disclaimers can be specifically stated on the course catalog. Language that has been held acceptable on the course catalog is "the class schedule is subject to change should economic conditions or national emergency make it necessary to do so, or at the institution's sole discretion." Lindner v. Occidental College, 2020 WL 7350212, at *8 (C.D. Cal. Dec. 11, 2020). However, language in the course catalog that stated, "unforeseen circumstances may necessitate adjustment to class schedules" was deemed too narrow in scope by one judge and did not cover instructional format changes. Marbury v. Pace University, 20-CV-3210 (JMF).
  • Publication of a Refund Policy. If an institution has a refund policy, publish the policy and ensure that it includes all the necessary conditions that could result in a refund in a clear and accessible way for all students. By way of a relevant example, an institution may decide to clearly advertise that students who voluntarily elect not to follow a school's mandatory vaccination policy will not be allowed to attend in-person classes and may seek a refund on this basis. Refund policies should be sufficiently detailed. In some jurisdictions, listing fees on invoices constitutes an express written agreement for those services, and the refund policy should clearly state any waiver provisions that affect the return of such fees.
  • Review Non-Academic Fees. Courts have not deferred to academic institutional decisions related to non-academic fees (in contrast to decisions related to academic services). In Re Columbia Tuition Refund Action, 20-CV-3208 (JMF). The lack of deference makes these claims harder to dismiss. Institutions should conduct a thorough review of all fees, such as health services, computer network privileges, mental health counseling, etc., and determine whether any of the services can be replicated on an online platform. Those that cannot be replicated should not appear on a student's invoice if they cannot access the in-person service.
  • Check Recent Litigation in the Relevant Jurisdictions. Many lawsuits have asserted an "educational malpractice" claim (i.e., a claim that the institution failed to provide an adequate quality of educational instruction through remote learning). While this is commonly asserted, it is not a cognizable legal claim in many jurisdictions. Breach of contract claims are creatures of state law, which varies greatly across jurisdictions. This is a reminder to all institutions that tuition reimbursement causes of action can differ from state to state, and the latest decisions handed down in the relevant jurisdiction should be reviewed for specific guidance.

Attorneys at Venable will continue to track the many higher education lawsuits stemming from COVID-19 across jurisdictions. In the meantime, higher education institutions are encouraged to consult with counsel and be prepared for the inevitable litigation resulting from the current landscape of learning for higher education institutions. Should you have any questions or are looking for more tailored guidance, please do not hesitate to contact the authors of this article, or any of the other attorneys in Venable's Labor and Employment Group.