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Imagine you decided to go to the dealership to buy yourself a brand-new car. After carefully researching the model and make of car and shopping around for a good deal, you finally decide to make the purchase. When the car gets delivered, you are excited to take it out for a drive, only to realize that the dealer has sent you a Vespa (an electric scooter). You complain to the dealer and they tell you to “make the best” out of a bad situation. You might think this is ridiculous, but it is in fact the experience of almost every university-enrolled student during the COVID-19 pandemic.

It is a poorly-kept secret that tuition rates in the United States have risen at an alarming pace. In 1963, the average cost of attending college was $9,918 (adjusted for inflation), while in 2017, the average cost was $23,091. This precipitous increase has led students to borrow alarmingly high amounts and at increasing rates, resulting in a cumulative student loan debt teetering over $1.5 trillion. Today, students are leaving universities crippled by student loans and, in many cases, unable to pay them back. According to the Federal Reserve Bank of New York, 10.8% of all outstanding student loan debt was either at least ninety days delinquent or in default in the second quarter of 2019. With the COVID-19 pandemic hitting many families, the rate students are defaulting on their student loans is likely to increase tremendously.

Many students felt, for the first time in a long time, that the COVID-19 pandemic would lead to reduced tuition rates. This is because many universities are unable to offer in-person learning, which is a cornerstone of the educational experience and the “collegiate” feeling into which students buy. At first, the move to online learning appeared that it would be short-lived, with students returning in the fall, but in many circumstances, this was not the case. When the fall semester began, universities utilized one of three models—in-person (23%), hybrid (21%), and primarily online (34%). As a result, when the fall semester began, over 50% of students had at least an unexpected online component added to their education.

Students who had purchased their brand-new car just learned that they had actually received a Vespa. The metaphorical Vespa in this instance being the lack of interaction, personalized instruction, and availability of professors. This was compounded by the fact that many universities decided to move ahead with raising tuition for the 2020–2021 school year, despite students not getting the full university experience. Universities such as University of Michigan, the University of Southern California, and Northwestern University all raised tuition, attributing the need for this increase to the financial losses suffered due to the pandemic. However, not all universities chose to increase tuition, with several choosing to freeze tuition for the academic year and some even offering a reduced rate.

As with most questions regarding disputed financial rights and obligations, the question of whether universities owe students a partial refund for the respective decrease in product quality is now a question before the courts. The logic behind these lawsuits is that students did not sign up for online classes when choosing their university and now have an inferior product for the cost of what they believed would be an in-person experience—essentially, a breach of contract theory. Since the pandemic, over one hundred tuition refund lawsuits have been filed across the country, indicating that students clearly feel legally entitled to reduced tuition given the fact that they are not receiving the traditional university experience.

The first obstacle that these plaintiffs will face is the issue of class certification. A federal class action requires numerosity, typicality, and commonality. This means that there must be at least forty members, all the plaintiffs have a common question of law, and the class representative actually represents the entire class. While students should have little problem meeting the first two requirements, the typicality requirement (Rule 23(a)(3)) will be the biggest hurdle to overcome.

First, the person paying tuition differs depending on the case. Payment of college tuition can usually be broken into three categories: (1) the student’s parent pays the tuition; (2) the student pays their own tuition; or (3) the student receives financial aid of various amounts up to and including full scholarships. This would leave many of the plaintiffs in different situations due to an increase in tuition affecting the typicality of the class. Second, there are many different areas of study and, inevitably, some lend themselves more easily to online adaption than others. For example, an English major might be better suited to handle the challenges inherit in a transition to an online learning platform than would, say, a medical student who requires practical work to fulfill their degree requirements. These differences make it difficult to generalize between students, and it further weakens the typicality of the class. Neal Hutchens, the author of The Law of Higher Education, points out how courts historically have “sh[ied] away from making academic judgments.” Choosing not to certify these lawsuits as class actions would be the easiest way for courts to dispose of these actions and prevent making these academic judgments that they are rarely inclined to make.

Even if these classes survive certification, plaintiffs will still have a difficult time establishing a cause of action. Most of the lawsuits have presented a breach of contract cause of action in trying to recover damages for the move to online learning. This is based upon the belief that online learning is inherently subpar to in-person learning. The problem with this theory is that courts hesitate to make normative determinations about what constitutes readily acceptable classroom methodologies, and are therefore unlikely to declare online learning subpar to in-person learning.

When attending university, students do not sign formal contracts with universities outlining that all classes will be provided an in-person format. Lawyers representing plaintiffs will have to argue that the school, through its advertising materials and communication with potential students, emphasize the importance of in-person classes on which students reasonably rely when deciding whether to attend. In essence, the students are arguing that by stopping or restricting on-campus learning, the school has breached their “contract” with the students. The prevalence of university marketing material depicting campus vibrancy and opportunities to engage with other students suggests universities are making an explicit effort to lure students to their institutions based on the facilities they will have access to as well as the overall campus experience.  The online format has deprived students of these opportunities and, if they are able to overcome the obstacle of class certification, the decisions in these class action lawsuits before the courts have the ability to redefine the legal relationship between students and universities.

The COVID-19 pandemic has uprooted the lives of everyday Americans in almost every regard, but the one thing that appears to remain unchanged is the ever-rising tuition amount that universities believe is fair to charge. Many thought that COVID-19 would be the colloquial straw that broke the camel’s back, but instead it appears to be just another straw to add to the pile. The price of tuition continues to increase and, if a pandemic is unable to slow it down, it is hard to imagine what will make tuition affordable again. In the meantime, university students are fighting on several fronts to try and hold universities accountable; unfortunately, it does not look like a class-action suit is going to be the solution that students greatly hoped it would be.

About the Author: Sandile Magagula is a 2L student at Cornell Law School. He received his undergraduate degree in political science from Western Washington University. Before attending law school, he worked in the finance and operations department of an international NGO focused on public health.

 

 

Suggested Citation: Sandile Magagula, Increased Tuition for an Inferior Product: The University’s Guide to Not Caring, Cornell J.L. & Pub. Pol’y: The Issue Spotter (Nov. 9, 2020), http://jlpp.org/blogzine/increased-tuition-for-an-inferior-product-the-universitys-guide-to-not-caring/.