Should College Students Be Suing Their Colleges for Rebates?

By Alex Chediak Published on April 21, 2020

In the space of three weeks, just about every college in America went from business as usual to sending their students home and shifting to remote instruction for the rest of the semester. Should students forced to leave their dorms and finish their semesters elsewhere be entitled to rebates?

Students at Drexel University and the University of Miami think so. They’ve filed class action lawsuits against their schools. The suits claim that students paid for an array of services they’re no longer receiving. These services include face-to-face instruction with faculty and access to campus facilities. They’re asking for a partial tuition rebate. Students at the University of Chicago have raised similar concerns. Over 11,000 students at NYU have signed a petition asking for tuition discounts. Why? Because “the school does not need as much money to run now that everything is remote.” So give us back the difference.

The Colleges Aren’t Spending Less on Instruction

Sounds reasonable, except it’s not. If anything, colleges are paying more to instruct their students. The issue is sunk costs. Payroll costs are set at least a year in advance. Vacant dorms are no different than unoccupied apartments or empty hotels — a cost burden to their owners. Moreover, colleges shelled out extra money in the weeks leading up to the big shutdown: First, deep cleaning and disinfecting dorms, dining venues, and other commonly used spaces, and then ramping up e-learning and network capacities to immediately facilitate an 100% online model. So there’s no reduction in instructional costs, as those expenses were already committed. COVID-19 meant that even more had to be spent, while colleges saw declines in revenue from unused facilities.

Think of the costs as being divided into two categories: Tuition and academic fees on the one hand; room, board, and student services fees on the other. There’s really no way schools can rebate on the first category: The faculty are under contract and still teaching, class sizes haven’t changed, and revenue from fees collected have already been spent. Moreover, those same faculty now providing remote instruction are needed for face-to-face instruction in the near future. Presumably in August.

Some Are Giving Room and Board Rebates

It’s the second category where schools are differing. Georgetown College, a private, Christian school in Kentucky with about 1,000 students, extended spring break by one week, then moved all their classes online, like everybody else. They left a message on their website: “The college is not in a financial position to offer any rebates on housing or meal plans.” Who can doubt it? There’s no way a school of that size with a small endowment ($30 million) can have the kind of operating margin to part with a few million dollars at the drop of a hat.

Other universities, however, are shelling out prorated refunds on room and board. If your annual operating budget is in the several hundred million dollar range, it’s still painful, but more doable. And it makes more sense: The students are still receiving an academic service, but they’re no longer living or eating on campus.

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Keep in mind, though, that it’s not as simple as saying “you going to eat 20% fewer meals … here’s 20% of your money back.” As President Ditzler of Albion College in Michigan put it, “The last meal the student eats is not as expensive as the first meal.” Think of the delivery system you need to have in place just to serve the first meal: cooks, servers, cleaners, etc. Once you have the system in place, the more they eat, the better. It’s not unlike the economies of scale advantage you have when you’re serving more students.

So partial rebates on room and board are a huge pill for colleges to swallow. How to pay for it? Hiring freezes, salary caps, benefit cuts, and/or furloughing employees whose duties aren’t needed in an “all our students are now commuters” mode. But apart from the fairness argument, you can see why rebating families is a good move for colleges. It’s classy. It builds good will. It looks tacky, for example, when uber-wealthy Stanford University sends students home a few weeks before the end of winter quarter — and doesn’t give them back a dime. Partial room and board rebates are a tangible way for colleges to share in the huge loss being shouldered by their students. Those same students can vote with their feet come next August.

Is Online Education Just as Good?

When college students across the country went home I heard buzz about how “now we’ll realize how great online education is … the students will never come back!” But as a professor caught in the middle of this, I think it may have the opposite effect. I do like how my students can rewatch portions of my lectures to pick up on things they may have missed the first time. But overall it’s a far less effective way to communicate. These frustrated students at Drexel, the University of Miami, and elsewhere — they get this. It’s not what they signed up for. It’s not what they want.

I’m staring at a Power Point on my screen, not my students’ eyeballs. I have little way to tell if students are tracking with me. They mostly listen, too bashful to interrupt. My asking them questions is a bit weird: Not all have microphones, many are slow to respond, and some only want to answer privately to me — which detracts from what I’m trying to do in stimulating every student’s engagement with the material. Then there are the non-academic challenges: Some students lack consistent Internet access. Others have big-time family burdens due to the shelter-in-place orders. Or they’re in vastly different time zones. Or they’re working odd hours to make up for a steadier job that they lost.

One administrator, speaking on background about the abrupt shift colleges had to make, said the new model “works well for the learners who normally do well.” But for the less prepared students, those with more chaotic personal lives? They “will need more support than can be delivered by a professor via Zoom lectures and email.” The upshot? “It will drive inequalities.” I think that’s right.

 

Dr. Alex Chediak (Ph.D., U.C. Berkeley) is a professor and the author of Thriving at College (Tyndale House, 2011), a roadmap for how students can best navigate the challenges of their college years. His latest book is Beating the College Debt Trap. Learn more about him at www.alexchediak.com or follow him on Twitter (@chediak).

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