Pandemic Ethics Dilemma: The Universities And Colleges Need To Keep Their Students’ Money, But They Are No Longer Earning It.

A class action lawsuit has been filed against the Arizona Board of Regents, the governing board for Arizona’s three public universities, because the three schools have refused to refund room, board and campus fees to students who were told to leave campus because of the Wuhan virus. Like virtually all US colleges and universities, Arizona State University, University of Arizona and Northern Arizona University, moved their classes online  for the remainder of the Spring  semester. Students who lived on-campus were either told to move out or encouraged to do so. Yet, the  lawsuit says, the Arizona Board of Regents has refused to offer refunds for the unused portion of the students’ room and board and their campus fees. The lawsuit seeks payment of the prorated, unused amounts of room and board and fees that the class members paid but were unable to use.

How can the schools maintain that it is ethical for them to do this? I understand that having to refund the money will be disastrous for them, but they are literally keeping advance payments for services that the schools will no longer provide. I expect to see more such suits, and on the basis of law, equity, ethics and common sense, I don’t see how the institutions can prevail in them.

Moreover, these Arizona schools are bargains. Colleges with tuition and fees several times what these schools charge  are also refusing to refund student’s money, which in most cases the students obtained through burdensome loans. What’s their justification for holding on to the cash, other than, “Sorry, we need it”?

“While the universities were prudent in closing their campuses and encouraging students to vacate their on-campus housing, it is unconscionable for them to attempt to keep the many thousands of dollars in room and board feeds they collected from each student, even though they have terminated the services that these fees covered,” said Adam Levitt, co-counsel for the plaintiffs. Indeed, ASU and NAU students have not been offered any refunds.

“U of A has refused to return to students the full pro-rated, unused portion of their room and board payments for the semester, and a small housing credit for the next academic year is useless for any student who did not intend to live on-campus during the 2020-2021 academic year,” Levitt said.

I don’t understand why the lawsuit doesn’t demand a partial refund of tuition too. Online courses are a pathetic substitute for in-person classes; a lot of data indicates that they are far less effective as a learning process. Moreover, the college experience includes a lot more than classes; I would argue that classes are a small part of colleges’ value.  When I was in my freshman year, our school was roiled by riots, boycotts, demonstrations and as a result, constant debates long into the night. I learned at least as much in those weeks with no classes as I did when they resumed.

Are not extracurricular activities also a major part of what tuition pays for? They certainly were for me: everything I learned about management, as I have told many employers and potential employers, I learned from theater, and I began my tutelage in that craft in college.

So-called higher learning is a dubious product already, with costs inflated to obscene levels by hype and a lack of serious standards. Now administrators are claiming that the price is still justified  when the product has been diminished, the dorms can’t be used, and the vital supplementary benefits are unavailable.

This can’t stand. It is self-evidently unjust.


Pointer: Tax Prof Blog

32 thoughts on “Pandemic Ethics Dilemma: The Universities And Colleges Need To Keep Their Students’ Money, But They Are No Longer Earning It.

  1. You are right, Jack, it is manifestly unjust, unfair, and the only way a judge could find otherwise is to ignore the law and equity, and create some nonsense out of thin air.

    If colleges were actually the paragons of virtue they hold themselves out to be, this would not even require a lawsuit. Of course, their behavior over the last thirty-five years or so informs this behavior, just as we would expect.

    When the students win (and I hope they win HUGE), the tears of the school administration and professors will be like fine wine to me.

  2. A side tangent: I hope that after this is all over remote work and remote classes/lectures become more normalized. Provided they wind up giving the same or better results that strictly onsite required ones do.

    • For those worried about the future, in about 10-20 years, the electorate will have a ton of voters in it that spent enough of an impactful part of their time being home schooled by day drinkers that they will cast perpetually skeptical eyes at those the government mandates they learn from. I can’t imagine a more practical and down to earth bunch of voters.

  3. As someone who serves as faculty at a top 100 liberal arts private college, one possible explanation would be students are receiving double work from faculty for the balance of their spring semesters and to put the college at a financial disadvantage when trying to retain good faculty performing extraordinarily is worth the retention of those other charges beyond tuition and books so as not to punish faculty at an institution with pay cuts in the coming year due to a revenue shortfall.

    Or, I might just be blinded by bias built of pure self interest.

    Your call. I think I know how that call will go.
    Go ahead. My neck is on the block. Grab an axe.

    • I won’t drop the hammer or ax on you but having taught in a community college for more than a decade not all faculty are doing double duty. More to the point, retention of great faculty can be accomplished even in hard times by offering accelerated sabbaticals, reduce extracurricular loading (non-teaching demands) or some other perk to be named later. If cash flow is the issue why not consider borrowing from the endowment to offset these crisis costs and pay them back over a longer time frame. It may require reducing some future scholarships until the shortfall is returned to the endowment but not making promises to yet to be identified students is not unethical.

      The school needs to be cognizant of the downside of being thought to have cheated students out of their money. Many of these students will be years paying off that loan that the gave the school funds now. Every time they write that check after graduating they will remember the time the school took their money and gave them nothing. Keep in mind your alumnae association will be trying to tap these students for donations for years to come. Imagine eliminating 100 potential donors who might give 100 bucks a year because you screwed them during this crisis. People don’t forget these things and no glossy annual brochure will change that mental picture.

      The key to great employee retention is identifying the items the great employees place great value on and provide them. If you lose some flunky faculty who are only money oriented your institution will be better off for it.

      Many fees at the such as student activity fees, technology and lab fees do not (or at least are not supposed to) support faculty costs. Failing to give a pro rata refund for room and board cannot be justified under any circumstance. The school is operating much like a landlord it can either provide alternative off campus housing or refund the rent and board payments.

    • All you say may be true, but that would have nothing to do with room and board.

      In my state, I don’t think the public colleges and universities put up a fight, maybe it is because it is the right call.

      I hope they lose big in Arizona.


      • Obviously, I hope, my post was in the spirit of devil’s advocacy, but let me persist for moment in it.

        Imagine yourself having planned to teach something in person for 150 minutes per week. You know exactly how you are going to teach it including weaving multi-media into your presentations. Then your college closes and demands you transform your teaching to purely remotely. None of the resources on campus are available. You are to transform the course and do it with many fewer resources. Most of, in some cases all, your prior course prep must be significantly altered or abandoned. Your learning objectives, planned group activities, online grade books and programmed due dates may all have to be redone.

        All this, pants or not, is not even all of it.

        • I am a high school teacher doing the same. Online teaching is not as easy as it looks – it is way more work right now, for all the reasons you said, with none of the beautiful things I love about teaching. I miss the kids, my colleagues, the spontaneous interactions. I am disappointed about all the great classroom experiences that I look forward to doing but which just can’t be duplicated online.

  4. I understand that having to refund the money will be disastrous for them

    Canning seven-eighths of the administrators wouldn’t be disasterous, it would be the best thing to happen to universities since Scholasticism.

    Though, to grant a point reflected in Adimagejim’s fears, I doubt the administration would willingly thin its own ranks. Stupid as it is for bureaucrats and managers to strangle the portion of the system which produces the product which is sold to pay their salaries, I spot them gutting the golden goose for an extra egg a day routinely.

    The world is full of bubbles ready to pop, and now the wind’s blowing harder than ever.

    He shouldn’t worry too much though. The ultimate result of a financial Armageddon will be a much higher demand for people with knowledge and skill, and, if the surviving private religious charities can afford it, soup kitchens for those preposterous, teeming masses with experience in managing managers of beancounting departments. Throttling the productivity of artisans and experts with gatekeeping forms and the latest name for the same inapplicable lean manufacturing scheme will be less valuable than it never was.

    Similarly, and circling back, nobody needs an arch-vice-provost of genderqueer studies in a food shortage. Xhye will be planting rutabagas, a far more valuable use of xhyr time. I almost look forward to ruin and starvation if it would mean having some common sense of what’s unimportant.

    Who am I kidding? Scratch that ‘almost’. A little physical suffering would do me some good. Is this Lent or is this Lent!

    • Yeah we imagine college faculty as a bunch of spectacled professors, but it’s the countless Diversity Officers and LGBT-Center managers who are (more obviously) non-essential now.

      • I knew a few spectacled professors. They were the sort who knew their profession inside and out and knew how to show you *how* to think about a problem rather than just what words to say in what contexts. They’d become less important to a university which had come to see higher education as a mass-produced product. In such a mindset, whatever sells faster and to a wider customer base with year-over-year growth in return is deemed important, while complex subjects grasped only by a few are pushed to a corner and considered a nonessential curiosity, ripe for next year’s budget cuts. Last year showed slower growth than we predicted, after all, and the many grievance departments outperformed the physics and biology departments.

        *The Shadow* raises a good point as well: many of the wasteful departments are mandatory. Maybe this isn’t a college-centric problem, then, but it’s the same problem if you consider the governing bodies as part of the same system – which they are, inescapably, so long as we permit federal and state bean counters to decide which things professional educators have to teach and how.

        Once you get beyond the spectacled professors and perhaps a few groundskeepers and clerks, it’s chaff all the way up, ready to be blown away by the wind. I’d be surprised to find that only half of our whole economy is fake.

  5. Ravelli: Oh, for playing we getta ten dollars an hour.
    Capt. Spaulding: I see…What do you get for not playing?
    Ravelli: Twelve dollars an hour.
    Spaulding: Well, clip me off a piece of that.
    Ravelli: Now, for rehearsing we make special rate. Thatsa fifteen dollars an hour.
    Spaulding: That’s for rehearsing?
    Ravelli: Thatsa for rehearsing.
    Spaulding: And what do you get for not rehearsing?
    Ravelli: You couldn’t afford it…you see, if we don’t rehearse, we don’t play…And, if we don’t play…That runs into money….

    –Animal Crackers

    • Fantastic. Thank you, LS. We need more Chico Marx, now more than ever. When people tell me “we’re in this together,” I can’t help thinking of the old Jay Silverheels joke comeback to the Loan Ranger: “What you mean ‘we,’ Kimosabe?” By the Way, BBC America was running a Monty Python marathon last night. Funny, but I found it surprisingly intense and exhausting. Life of Brian: Brian is tasked with writing graffiti by the subversive/commie group. Romans Go Home. A group of centurions approach while he’s hard at work and rather than imprisoning Brian, the head centurion mercilessly corrects Brian’s Latin grammar before, while marching off, commanding Brian to write the correct graffiti a hundred times.

      I trust both you and Jack know that Groucho was a compulsive Gilbert and Sullivan aficionado. He’d have parties and insist the guests sit with him and listen to entire G&S productions on records. Drove his guests crazy.

  6. I’ve mentioned before that I work on staff (IT specifically) at a smaller liberal arts college and wanted to give some insight and possible answers to questions placed here.
    1) We have not officially announced how refunds will work, but I suspect it will be prorated. There is no excuse for schools who are not; I know of one school that is refunding all housing costs for the entire spring semester – I applaud them for trying to do the right thing.
    2) We have a relatively large international contingent, so we allowed some students to stay on campus if they would be returning to a riskier situation (we’re in a more lightly affected area – 0 cases in the city and single digits in the county). This complicates the matter – should they get a refund or some sort of discount?
    3) We have steadfastly resisted on-line classes in the past for the reasons you state, however you can’t just abandon students halfway through a semester. (This new initiative took a large effort by us, IT, to pull off in a short amount of time) In addition, higher education is just another type of business and students are the customer. More and more students are asking for the ability to take on-line classes, just like more people are shopping at Amazon instead of Target. How long can we resist this trend and lose potential customers?
    4) Creative accounting (borrowing from endowment, etc) can be difficult. Accreditation entities as well as the government (specifically the Department Of Education) can be restrictive on what schools can do financially. I spent the first 16 years of my career in the corporate world, and we had much more financial freedom (even with the likes of Sarbanes Oxley) there.
    5) People often pick on the top-heavy administration. This is true to some extent, but you’d be surprised at how much of the headcount is related to laws and regulations placed on the schools by the state and federal government. Things like Title IX, financial aid, learning assistance, department of education reporting, etc requires a significant workload.
    6) As a business, a school has to compete for customers. Often these customers aren’t directly shopping for value, so a lot of money is invested in “pretty” things (nice green spaces, fountains, etc) and in things of interest for students. For example, something like 1/3 of our students are somehow involved in the athletics department. We are a Division III school, so we cannot give athletic scholarships and make no money off game attendance or merchandise. This area is a large cost for the school, but without it, we would lose a large portion of that 1/3 who would attend somewhere else who did offer it.
    7) Not to pick on some of the other commenters, but faculty can be a difficult area as well. About 6-7 years ago we tightened the rules on faculty-student relationships, basically disallowing them all together (before it was only not allowed if the student was in one of the professor’s classes). It was made a dismissible offense, and the faculty nearly rioted. They truly believed almost nothing they do should result in being fired. Admirably the leadership held firm, but the faculty often act as a strong armed union to force the school to bend to its will. This is often how we get the gender studies, et al, because the faculty demand it.

    Just my 2 cents from down in the trenches.

    • Thank you, TS.

      7) Unbelievable. I’ve come to look back on goings on in the late ’60s to early ’70s and concluded faculty at my college considered sport fucking the co-eds an essential perquisite of their job. Must have thought it made up for what they considered to be the inadequate financial remuneration. It makes my blood boil.

  7. I happen to have a kid in dorms. Her stuff is still sitting in the dorms, they told them to not return during spring break. That’s it’s own conundrum. When do you safely get the items? She’s been scheduled to return the end of the month to collect the items. They are refunding some money, by the way. I’m conflicted about the refund since her belongings are still sitting in the dorm room.

  8. They can’t give the money back if they don’t have it any more, unjust or not. If there’s no money, there’s no money. This is going to be a huge problem for a lot of businesses when the lockdown ends. Many businesses get paid in advance for services that they render over time and use that money to pay current expenses. Most of those businesses are continuing to incur expenses now, while shut down, even though they’re not bringing in any revenues or providing any services. When their customers come demanding refunds, and their creditors come demanding payment, somebody’s going to get stiffed, through bankruptcy or otherwise On the other hand, there are going to be some big winners — or example, insurance companies that received premium payments for businesses that are closed, and therefore won’t have any slip-and-fall cases filed against them.

    • A big question I have that maybe the insurance defense bar among the EA commentariat can address: BUSINESS INTERRUPTION INSURANCE! Hello! Are insured going to be able to collect for losses resulting from the government closing them down? Will the supreme court of every state have to determine this? Will the insurance companies survive? Will there be a federal bail out? How many businesses have maintained this coverage? Hasn’t it been a fabulously profitable line for insurers?

      Anyone? Beuhler?

      • Policy language is pretty clear in most cases. The commercial policies that I work with all link business interruption claims to physical damage to an insured structure. There can be coverage for a civil authority mandating an area as unsafe, but it also is linked to direct physical damage to structures in the area, if not to the insured property.

        Many commercial policies also include exclusions for virus and bacteria.

        We will see if the states (I’m looking at New Jersey and CT) are successful in legislating that insurance companies must pay BI claims irrespective of policy language.

  9. Online courses are a pathetic substitute for in-person classes; a lot of data indicates that they are far less effective as a learning process. Moreover, the college experience includes a lot more than classes; I would argue that classes are a small part of colleges’ value.

    I’ve taken classes at a modest university, a community college, and several online institutions, and the online courses were nearly worthless, relying on rote memorization and trick questions more like insurance reg tests. They cannot teach process or reasoning because they aren’t tested in a computer readable format. Practical exercises like software were not even assigned because it required more effort on presentation, assignment, and rating. Even an intro history course got hung up on woke agenda and writing essays using only 5 approved sources. Had a friend who took classes from 2 diff online well rated colleges and both taught almost nothing I learned in middle school when Ford was prez. Anything you learned was from the other students as the staff was awol and only used lecture recordings, not even live.

    Apologies to anyone in a community college, but it was only slightly better. You did get a more responsive lecture, but the teachers were not available if there were questions or issues. all you got was tecture and text,

    Traditional schools at least provide more interaction and assistance as long as you can push when there are issues like messed up mainframes. Online especially ANY issue the not the school’s problem. I made a lot of relationships that lasted for decades in the brick and mortar college, served in clubs, advocated in student gov’t, got used to making day to day decisions that I hadn’t before. I don’t begrudge that it took decades to pay it off. I got to finally meet a wealth of people I never would have in my rural area and get better work than I would have gotten without.that education.

    • I will offer a contrasting view from some of my experiences last fall. But here is the difference — I enrolled in some continuing education classes that I needed to help me advance a level with my certification. It wasn’t that the courses were required per se, but the stuff I was learning was a portion of what would be covered on the certification exam. I should say that these were virtual classrooms, with students from all over the country.

      My experience with those classes was almost uniformly positive. The students were interested in learning the material, the teacher enjoyed teaching the classes, there was a lot of interaction and questions about what we were covering.

      Obviously, that’s a big contrast to a lot of college classes, although I don’t know that it really should be. We were taking these classes because we wanted to improve our skill set, advance through the ranks, and not least — get paid more for what we were going to do.

      I realize a lot of college students don’t approach their classes this way, but presumably many of them major in something because they’re genuinely interested in that field. We’ll leave aside core curriculum classes and mass freshman requirements.

      My point is that online classes can work well given the right circumstances. Heaven knows that, in my field, we would have a major problem trying to get together enough students locally to do some of these courses.

      • No, I was a student with a bachelors in a tecnical field and interest in humanities. I continue learning on my own, but these classes were not teaching process or judgement, No exercises or projects were assigned that actually used new data or anchored it for experience.

        This isn’t about certification, which builds on existing understanding, but establishing understanding and application. I learned a lot in college, in class and out, but the new style of rote and little prof involvement is slowly forcing me to agree that it is a waste, If we are dropping 5k+ a semester we needs tools for long term mastery, not relying on details that changes every few years. Students need to understand the details these remote classes focus on are shifting sand and college is more about building a strong framework that builds and evolves as evidence and the world changes. I learned COBOL in college, but it was picking up languages and op system after op system is wha I was really learning. Writing a working program is far more important, a good UI is infinitely more important, than memorizing raw facts about system du jour that will be unused in 7 years.

        I an extremely reluctant to spend on classes that fill the students time and debt without teaching anything of value. All classes should teach something of value, no matter the field. Some that thayed with me, because they were less of ephemeral fads or bleeding edge were of an obscure language or classical mythology.

        College should give more for the incredible debt for a paper that says you know 360/370 assembler coding, but make a more rounded adult. It’s the student’s choice as to what kind of adult when shown the possibiities, good or bad.

  10. Many students are getting PDFs in lieu of textbooks now.

    Which kinda exposes the whole racket of $100 textbooks.

    Which were an obvious racket before, but now it’s official.

  11. Do any of these places have clauses in their housing contracts or similar documents that say these costs are non-refundable? That could be something to hide behind.

  12. Refunds were my immediate first thought when I heard the schools in Connecticut were shutting down the dorms. Fortunately, at least the the public schools initiated the refunds on their own in a relatively timely manner (no idea about Yale, Conn. College, or other private schools).

    Having worked in the distance learning department while in Grad School, the school charges the same per credit as is it does for on campus learning. They will likely be able to weasel out of refunds based on the argument that they are extending existing online programs.

    They very much should refund any campus related fees, at least as much as they exceed equivalent online non-tuition course fees.

  13. My private school placed in their announcement about doing virtual learning for the rest of the year the notice that they would be refunding room and board for that part of the semester. I guess that is the difference between a private school and the state. Good luck finding a judge willing to fine a public university. When University of Oklahoma threw students out of their housing because OTHER students said something racist, they didn’t get a refund.

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