Courtrooms, Consolidations, and Closures: COVID-19’s Impact on Higher Education

May 28, 2020 | Covid-19 | 0 comments

Due to the COVID-19 pandemic, universities and colleges were forced to close their campuses this year, and offer remote learning options to their students. This was not a transition many were prepared for, and the perceived shift in teaching styles and overall experience has led to a debate over what constitutes the contract between students and higher education institutions. As a result of this debate, many dissatisfied students and their parents have now filed lawsuits demanding that their tuition be reduced and that fees be returned to them.

The plaintiff-students in these suits allege a breach of contract –arguing that the “on-campus experience” is advertised by universities as a valuable feature of their school, making it a condition of the contract they enter into, for which tuition and fees are consideration. They consider the failure to deliver that condition a breach of contract, and that schools are unjustly enriched by converting all of the tuition and fees paid to them. The plaintiffs claim that they are entitled to reduced tuition and the restitution of any fees relating to the on-campus experience. Some students also feel that the value of their degree has decreased as a result of the switch to remote learning due to the quarantine.

The defendants in these cases, ranging from Northeastern University to University of Colorado – Boulder, have not yet revealed their strategies for defending these claims. However, it seems likely that one argument they would make is that when it comes to tuition, it seems impossible to measure out a reduction that accurately measures the difference in monetary value between pre- and post-COVID education. Even many of the fees that schools charge their students are not divisible based on which ones are purely “campus-related.” The lack of clarity makes detangling of the complex financial relationship students have with their chosen schools in order to determine precise damages an almost insurmountable challenge, something the courts will likely take into account as they assess these suits.

Many educators would also argue that the way specific schools are advertised, including the “on-campus experience”, is not the basis for the contract between students and universities. It can be argued that the foundation of a higher education contract is the exchange of money for educational credits, the procurement of which provides students with marketable capital in the workforce. A degree can be seen as a collection of these credits, and the contractual relationship can be seen as the student paying the university for the opportunity to try and obtain these credits. It is true that higher education institutions are competing in a saturated market, and so they advertise their extracurricular benefits to entice students to select their academic programs. But it is a basic premise of contract law that advertisements do not constitute an offer or change the terms of a contract.

It will be interesting to see which way the courts rule on these claims, but for now, university officials taking some steps to show goodwill. For example, the restitution of room and board fees and other fees specifically related to campus life has become very common. Some schools have also announced a voluntary reduction in salary of a top percentage of highest-earning staff, including the presidents/chancellors, to contain any losses they may incur instead of passing them on to the students.

Universities and colleges are also working to address their internal financial concerns. The increased demand for higher education and increased cost related to providing that education, partnered with a steady decrease in related government funding, means that schools often offset those costs by raising tuition at regular intervals. It is understood that too much of a tuition increase will scare off prospective students, so another way schools can recuperate costs is through the introduction of fees dedicated to various services they provide for students. If remote learning continues, these schools will partially or entirely lose income generated from fees for a host of other services they generally provide that are separate from tuition, like housing, meal plans, access to sporting events, and recreational activities. Residential and commuter colleges alike could also experience a dip in enrollment, with the former having its usually enticing on-campus offerings discounted or devalued by prospective students, and the latter losing the portion of its student population dependent on safe public transportation to get to and from classes.

These drops in revenue could be enough to close schools that do not have a sufficient financial buffer to weather these losses.  Alternatively, it could force them to consolidate with larger, more secure institutions to stay open. An example of this phenomenon can be found in the Greater Boston area, where Pine Manor College, a small school enrolling less than 500 students annually, recently announced a merger with Boston College. The COVID-19 pandemic has been considered by some to be the tipping point leading to this partnership. While agreements like this can preserve the struggling schools and provide options for students who would otherwise need to transfer, it is not a perfect solution, as the faculty and staff cannot always be guaranteed a job at the absorbing school.

With the prospect of yet another academic semester occurring during COVID-19 restrictions for social distancing, it will be informative to see the variety of methods these institutions employ to strike a delicate balance between protection and profit. Some universities have said they will be bringing 100% of their students back on campus; some are planning for another fully remote semester, with the possibility of bringing some students back in the spring. Most plans are dependent on any news of a vaccine, but the dispersal of that brings a new host of privacy issues. Some proponents of higher education are also lobbying Congress to provide liability protections for schools that wish to open their campuses. This could generate concern among students about their health and safety and perhaps backfire, leading to lower enrollments and lower revenues.

The challenges higher education faces in light of the COVID-19 pandemic are simply a reflection of these substantial systemic issues coming to the surface, and may lead students, universities and the public to reflect on what the future of advanced learning should and will look like, and how to most equitably address all barriers to education. The coming months will be informative from a legal standpoint, as schools involved in COVID-19 lawsuits work toward resolution, and others establish policies and procedures that they hope will both protect the health and welfare of their students, and protect their institution from future legal action.

CMBG3 Law is closely following legislative and litigation developments relating to COVID-19’s impact on education. Our experience in compliance, government relations, litigation and litigation management allows us to offer our services throughout the life cycle of this issue. We have offices in Massachusetts and both Northern and Southern California, as well as attorneys admitted in half a dozen additional states, ready to work for you.

For a related article on what industries are lobbying for legislation establishing liability protections, please check out attorney Nicholas J. Blei’s article here.

Authored By:

Suzanne Englot, Esq.

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