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Demand for refunds intensifies among college students

CNBC logo CNBC 5/6/2020 Jessica Dickler
a small clock tower in front of a building: Vanderbilt University © Provided by CNBC Vanderbilt University

For undergraduates studying at home amid the coronavirus pandemic, college isn't what it used to be.

However, it costs just the same.

While a number of colleges and universities are offering refunds of fees and room and board, the reimbursement policies vary from school to school — and nearly all of them have drawn the line at tuition. 

As students and their parents argue that remote learning doesn't have same value as an in-person education, a growing number of undergraduates are taking their cases to court.

Students from Boston University and Brown University are among the latest group to file class-action lawsuits against the universities asking for repayment for tuition, room and board and other costs due to Covid-19-related campus closures and residence hall shutdowns.

"College students enrolled in classes when the Covid-19 outbreak struck were left with no access to their dorms, to classrooms, campus cafeterias or other facilities they paid to use," said Steve Berman, managing partner of Hagens Berman and the attorney for students in the class action lawsuits.

"We believe there's absolutely no reason why they should continue to be stuck holding the bill for tens of thousands of dollars, only to be kicked off campus."

Further, for these students, the quality of the education they now receive "is just not the same," Berman said. 

Both lawsuits were filed April 30, one in the U.S. District Court for the District of Massachusetts, the other in the District of Rhode Island. In each, the universities are accused of breach of contract and unjust enrichment.

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Hagens Berman has filed similar actions against Vanderbilt and George Washington universities and more lawsuits against other schools will follow in the days ahead, Berman said.

George Washington, Vanderbilt, Boston University and Brown have all said students will receive a prorated credit on their student accounts for the unused portion of their room and board. Because instruction continues remotely, tuition and fees have not been adjusted at any of the schools.

"While all classroom course work is now being taught via various alternative learning methods, tuition and fees remain the same for the Spring 2020 term," Vanderbilt said on its website. "The faculty effort and resources required to deliver the course work are the same, and in some cases, greater, when they are delivered online as when they are delivered in person."

Meanwhile, college costs are skyrocketing. Tuition and fees plus room and board for a four-year private college averaged $49,870 in the 2019-2020 school year; at four-year, in-state public colleges, it was $21,950, according to the College Board.

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Separate class-action lawsuits have also been filed against Drexel University and the University of Miami, among other schools across the country.  

In Florida, attorney Adam Moskowitz filed a suit against the Florida Board of Governors on behalf of students at all in-state public schools.

In this case, students are not seeking refunds for tuition or room and board, but rather for on-campus charges related to athletic facilities and transportation, according to Moskowitz, who is also an adjunct professor in class action litigation at the University of Miami School of Law.

"The only thing we thought was extremely egregious was on-campus activities that students have already paid for and cannot participate in," he said.

"Schools are facing all sorts of challenges," said Derin Dickerson, a litigation partner and co-chair of the colleges and universities practice at Alston & Bird in Atlanta. "Defending class action lawsuits is the last thing they need."

"We are all struggling with the health and economic effects of the pandemic," he said, and schools are also saddled with additional costs, from software and technological upgrades to deliver educational material at a distance. That means many institutions likely don't have the financial means to provide any sort of refund, he added.

Many schools, in fact, are facing a significant shortfall, as more students reconsider whether to enroll in remote learning come the fall. (Already, universities have furloughed thousands of employees and announced revenue losses in the hundreds of millions, according to the Chronicle of Higher Education.)

"These refund class actions pose significant financial, reputational and legal risks to institutions already under unprecedented stress," Dickerson said.

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