College Tuition & COVID-19

empty college lecture hall, probably due to covid-19

College tuition was paid despite the COVID-19 pandemic shutting down campuses and forcing students onto online classrooms. Now, the courts are deciding whether a partial refund is due. It really depends on what the courts decide the schools promised.

Background

Covid-19 swept the world in the 2019-2020 academic year’s spring semester – March, 2020. The pandemic forced nearly everything to close: restaurants, stores, office buildings, hotels, theaters, countless jobs, and schools at every level. No more live classrooms; no more campuses. Colleges forced students to leave and go home. Instead of gathering in classrooms, students gathered on Zoom online video meetings. College students arguably paid the biggest price. The average college tuition in New York for the academic year 2019-2020 was about $20,000. There were a few tuitions closer to $60,000.

Issues

Spring semester for most colleges begins at the end of January, lasting until May. The pandemic basically robbed half a semester from college students. Going by the average cost of tuition in New York, this loss was about $5,000. For students at a few schools, it was closer to $15,000. However, students were still receiving an education, albeit a very different one than they signed up for and imagined. Lectures may get boring, but at least the professor and students are in the same room and can interact without technical issues. Online video lectures – virtual college – caused a lot of fatigue in students and teachers. Many people dropped out, waiting for campuses to reopen.

There is probably a large consensus that online school was just not the same. Quality of education issues aside, by receiving a different form of education, students also lost out on campus life. Online school and no campus was not what many students paid tuition for. Many have sued for a refund due to breach of contract or unjust enrichment.

The Law So Far . . .

(April, 2021)

In general, it seems that the tuition paid is nonrefundable. But, there are exceptions. Refunds are due when promised service was lost due to the shutdown. Whether the college actually promised a specific service is the main point in these lawsuits. At this point, these cases are at the motion to dismiss stage: whether there is even a viable claim.

Federal Court Cases

These college tuition cases are mostly in federal courts. Federal courts in New York must follow NY State law except when it comes to court procedure and federal law claims. These cases are State law claims such as breach of contract, so New York law is all that matters here. Although these federal courts are applying NY law, NY State courts could possibly decide things differently.

Northern District of New York – Cornell University

In the Northern District of New York (“NDNY”), the big college tuition case concerns the Ivy League school, Cornell University. Students sued for breach of contract, unjust enrichment, and conversion. In response to the pandemic, Cornell required almost everyone to leave campus by the end of March; they did also partially refund room & board. Online class began in the first week of April.

Standing

The NDNY firmly established what many other courts have about parents suing for tuition payments they made for their children’s college education: Parents have no standing to sue unless they allege that the child is a minor and the parent is a third-party beneficiary.

Breach of Contract

The NDNY used New York contract law, which has 4 requirements to sue for breach of contract: 1) parties made a contract; 2) plaintiff performed; 3) defendant did not perform; 4) damages. This case also emphasized that under New York law, a university accepting a student for enrollment establishes an implied in fact contract, which has equal legal force as an express contract. However, because the contract is implied and not explicit, the material contract terms are highly fact specific. A school’s specific promises to students can only be found in written material (handbooks, ads, policies, etc.) that are material, or important, to the students’ relationship with the school. Thus, the courts decide what the contract terms are, based on the materials that the school provides to the students.

The issue is thus whether Cornell specifically promised in-person class and on-campus college. The students in this case pointed to many different general statements that might altogether create a specific promise, in addition to course selections having online or in-person designations. The court found almost no specific promise of in-person class and on-campus college.

Cornell’s mission statement included the line, “a Cornell education comprises … in the classroom, on campus, and beyond.” The NDNY found this to be a specific promise for in-person class. The breach of contract claim for a partial tuition refund survived.

In addition to tuition, the NDNY agreed with a breach of contract claim for fees charged. These fees were meant to pay for access to on-campus facilities, access which was deprived due to the pandemic.

Unjust Enrichment

New York law has 3 requirements for an unjust enrichment claim: 1) the defendant benefitted; 2) at the plaintiff’s expense; 3) and justice requires a refund. The NDNY noted that unjust enrichment cannot be claimed when a contract covers the issue. The court found that the lack of full refunds was not adequately against justice to support this claim.

Conversion

New York law defined conversion to be an unauthorized exercise of ownership over another’s property to the exclusion of the rightful owner. Basically, stealing. These claims are also not allowed when a contract covers the issue. The NDNY dismissed this claim too.

New York General Business Law sections 349 and 350

The students also claimed that Cornell’s marketing materials became unfair business tactics that deceived and caused damages. The NDNY held that the key to these types of claims is that the defendant committing the unfair tactics must know or possess the information that the consumer is unaware of. That information here was the fact that a pandemic was going to force the world to shut down. No one knew. Furthermore, no marketing could reasonably promise that on-campus life and learning would go on during a pandemic. The court dismissed this too.

Southern District of New York – Columbia, NYU, Fordham, Pace

In the Southern District of New York (“SDNY”), the big tuition cases concern other big names in academia. The claims are generally the same: breach of contract; unjust enrichment; conversion; and NY business laws.

Breach of Contract
Columbia University | Pace University

The SDNY noted that under NY law, students and colleges have a contractual relationship. The contractual terms are found in the many different written materials that students receive. This is an implied contract. Suing for breach of an implied contract requires that specific promises have been made.

This court also decided that Columbia’s course designations as “online” or “in-person” do not constitute specific promises. The SDNY emphasized that prior practice or conduct does not guarantee or promise similar future practice under NY law. The SDNY also determined that the college marketing materials promoting campus life was “mere puffery” or just salesmanship. There were thus no specific promises of in-person college. This claim against Columbia failed.

Pace University’s course designations, however, did constitute specific promises for in-person class. Pace listed on-campus courses as being “taught with only traditional in-person, on campus class meetings.” It’s hard to get more specific that that. This college tuition claim against Pace survived.

In addition, the SDNY agreed with a breach of contract claim for fees charged. These fees were also meant to pay for access to on-campus facilities, access which was deprived due to the pandemic. This decision created a split within the SDNY because another judge required bad faith on the part of the defendant for breach of contract claims against a university (Fordham). This split was rectified on April 6th, 2021 by the judge hearing the Fordham case. New York law does not require bad faith on the part of educational institutions for plaintiffs to sue for breach of contract in college tuition cases like these.

NYU

The SDNY decided that NYU did not make specific promises of in-person education or on-campus life. Simply put, nothing in the marketing, course listing, or online statements contained language promising or guaranteeing in-person experiences. The court also required breach of contract claims like this to be grounded in writing, in text and not conduct. Again, prior practice does not promise similar future conduct in these cases. Thus, just because classes were offered in-person before, does not mean that they are contracted to be in-person going forward.

Educational Malpractice

The SDNY worked through an extra issue: the educational malpractice doctrine. This doctrine prevents, or severely restricts, courts from deciding issues about a school’s education quality. This doctrine naturally arises whenever students sue schools. However, it is not always relevant. These cases are not students suing about education quality as an abstract ideal; these cases are students suing for specific promises – for breach of contract. The SDNY thus found that the doctrine does not prevent these college tuition breach of contract claims.

Unjust Enrichment

The SDNY dismissed these claims for the same reasons as the NDNY did.

Conversion

The SDNY dismissed these claims for the same reasons as the NDNY did.

New York General Business Law sections 349 and 350

The SDNY dismissed these claims for the same reasons as the NDNY did.

Conclusion

These cases are ongoing and the law is developing. For now, though, there are a few main points for similar cases:

  • Successful breach of contract claims require the university to have made specific promises.
  • General marketing language and course descriptions are not specific promises.
  • Specific promises sound like a guarantee: “only in-person class”; “an education here is on-campus”.
  • Lastly, the law here is still developing.

Contact For Help & Advice


Andrew Rozo
scroll to top
Skip to content