Students Want Tuition Refunds Colleges Can’t Afford

• Students are suing colleges for tuition refunds after campuses shut down nationwide.
• Students and families point to financial hardships and the lower quality of online education.
• Colleges have not agreed to refunds and insist the quality of education remains the same.

College students across the U.S. are asking for their money back. In March, when the COVID-19 pandemic forced campuses to close, schools acted quickly to move courses and student resources online. Now some students are saying their online educational experiences have not merited full-priced, on-campus tuition.

Students have filed class-action lawsuits against more than 25 colleges for partial refunds on tuition and campus fees, as well as damages. The lawsuits target prestigious private universities and big state schools and claim to represent thousands of students, and more lawsuits could be on the horizon. Legal firms say there's a surge of inquiries from students and families who want refunds.

The class actions don't quarrel with colleges' decisions to close; instead, they take issue with the diminished quality of education. Students point to canceled classes, programs, and projects; the loss of campus perks paid for by student fees; and a decline in course quality. Colleges stand behind the quality of their online offerings and say that students are earning the same credits.

Thousands of students from more than 25 colleges are involved in a class-action lawsuit asking for tuition refunds plus damages.

Thousands of students are taking legal action, and even more have launched petitions asking for lowered tuition or partial reimbursement for this year's winter and spring quarters. Students at the University of Chicago signed a letter saying they will not pay spring tuition, due at the end of April, unless the school cuts tuition in half for the remainder of the crisis.

Many students and families are not in the financial position to pay full tuition. Meanwhile, many colleges are not in the financial position to shoulder additional revenue loss.

Colleges are hurting more than ever due to the financial costs associated with closing campuses, transitioning to online education, and canceling sports events. Two small colleges are closing permanently. Even Harvard, the wealthiest college in the country, was forced to make budget cuts.

A few schools have offered discounts for summer term, and some may freeze tuition for the coming academic year. But with potentially lower enrollment numbers and reduced state funding, college tuition at many institutions could instead go up.

Student Lawsuits Claim Online Education Falls Short

The class-action lawsuits claim that colleges are unjustly benefiting from federal bailout money and the tuition and fees students paid for services they aren't receiving. The primary service provided by a college is a quality education, and many students going from traditional classrooms to online instruction have been underwhelmed.

The majority of students’ tuition money goes to paying faculty and staff, who are still serving students from a distance.

Students are also missing out on campus perks, such as the ability to access recreational facilities and labs, conferences and research projects, and networking opportunities. Attorneys representing college students say the intangible aspects of campus support higher tuition costs, too.

Colleges, for their part, say that federal funds are funneled to students as financial aid and that the amount dispensed amongst schools covers only a small portion of their anticipated loss. Furthermore, the majority of tuition goes toward paying faculty and staff, who are still serving students from a distance.

While online courses can be substantially less expensive than on-campus courses, this is not always the case. Some colleges charge the same per-credit amount for online and in-person courses; at others, the online cost per credit is actually higher.

Producing online courses can be profitable for colleges over time. Once established, a large number of students can enroll in a class without increasing operating costs appreciably.

However, initially producing digital course content is expensive and time-consuming. In addition to investing in online educational resources, schools are paying to make other services, like academic counseling and health clinic appointments, available online.

Higher Education in Financial Straits Before COVID-19

Even without the pandemic, higher education would be struggling financially. Moody's, an investor rating service, changed the financial outlook for the higher education sector from stable to negative for 2020. The report was issued in December 2019 — before COVID-19 was first reported and well before the pandemic prompted campuses to close.

Higher education has been anticipating an enrollment cliff around 2030. Coronavirus could accelerate this downward trend.

Without campus life, some students and families are unwilling to pay on-campus tuition rates. But lowering rates, let alone returning funds, would be hard for many colleges.

Brick-and-mortar colleges rely on tuition fees for at least 30% of their income, and some depend on this funding source even more heavily. Small, private, relatively nonselective colleges — often with religious ties or a specific mission — typically rely on tuition most, which makes them particularly vulnerable to changes in enrollment.

Higher education has anticipated a serious drop in student numbers, i.e., an enrollment cliff, when the number of college-age individuals dramatically drops around 2030. Colleges that stand to be most impacted by the enrollment cliff — like regional, four-year schools — also stand to be heavily impacted by COVID-19.

Amidst layoffs, furloughs, and school closings, colleges are also wondering who will show up in the fall. In a survey of 300 high school seniors conducted by QuatroMoney and TuitionFit, over 25% of respondents were rethinking college decisions due to the coronavirus outbreak, showing a new preference for staying closer to home or studying online.

Colleges Say Students Won't Get Tuition Money Back

Colleges and universities are not on board with issuing tuition refunds, according to school spokespeople. Some colleges, including those in the California State University system, are considering partial reimbursement for room and board, but not tuition.

Unused housing and dining plans are one thing, but returning tuition paid for completed or nearly completed courses is another. Colleges acknowledge that the student experience has dramatically changed, but say credits and degrees are still being earned and the same professors are teaching classes.

In attempts to replace lost campus resources, schools have provided online academic support and telehealth. In many cases, instructional and operational costs have ramped up.

[I]ssuing refunds for the finished and half-finished winter and spring terms would require massive rewrites to school policy.

Many colleges lack the resources to give students refunds. Issuing a refund based on changes in a student's perceived quality of their education is against typical school policy. Usually, refunds are only issued to students who withdraw on schedule. The tuition for graded courses cannot be reimbursed, and colleges contend that dissatisfaction with a course is not a valid reason to return funds.

Colleges have been updating education policies since March, when the U.S. Department of Education advised postsecondary institutions that calendar, credit, and financial aid rules would be relaxed. However, issuing refunds for the finished and half-finished winter and spring terms would require massive rewrites to school policy.

For now, college spokespeople say colleges won't pay.

Increased Investment in Online Learning

While many students claim that distance learning is a poor substitute for classroom learning, their current online education experience was an improvised solution.

Some educators say that the classes students have been taking this winter and spring don't even qualify as online education — they were in-person classes put online in an emergency. This may be an important distinction. With a summer to prepare a richer digital experience, online courses may improve in quality by the fall.

However, the major complaints of students unaccustomed to online education — little interaction with students or professors, no synchronous learning, and reliance on recorded videos — need to be focus points for online educators going forward.