Universities across the country have written addendums into their residence-life contracts specifying that refunds will not be issued if a Covid-19 outbreak forces their campuses to close early this fall.
The University of South Florida has said that if any of its campuses have to shut down prematurely, students should not expect to be reimbursed for housing or dining fees they’ve already paid.
A number of schools are attempting to put a clause in their housing contracts. I just don’t think it’s legal.
“The possibility of closing our residence halls entirely is a last resort that we do not expect will be necessary,” Adam Freeman, a university spokesman, wrote in an emailed statement. “However, in the interest of transparency we have informed students in advance that if they choose to sign a housing agreement, refunds will not be issued if we are forced to close the residence halls.”
USF did not close residence halls in the spring, and an FAQ on the university’s website states that “based upon the information we have at this time, we expect we’ll be able to keep the residence halls open for the entire year.” Students could remain in their dorms even if the university had to switch to remote learning in the fall, the FAQ states.
But it also says that “these are unusual times and we want to be sure students understand the standard Agreement language and that we may have a need to consolidate students or to move students from one room or building to another.”
To date, Florida has had more than 213,000 cases of the coronavirus, and reports of new cases spiked in June.
With the fall semester still weeks away, cases of Covid-19 are already appearing on campuses and in college towns as athletes return for voluntary workouts and fraternities throw parties. That raises red flags for some close observers of higher education.
“The optics of it don’t make sense,” said James F. Galbally Jr., a consultant who advises colleges on their finances. “Institutions should be willing to give students a refund if they have to close down.”
“It would be bad for business because of the uncertainty of the spread of the virus,” Galbally said, noting the recent rise in confirmed cases. “Parents may be reluctant to send their child to campus.”
The University of Maryland at College Park added the following paragraph to its housing contract: “The University may adjust the housing services schedule contained herein, temporarily close, and/or place restrictions on use of housing facilities as necessary in the University’s sole discretion to preserve the health and safety of its students and the campus community. In the event of such temporary closures, restrictions, and/or adjustments to the housing services schedule, the University shall not be obligated to issue refunds or credits, whether partial or full, for such interruptions or adjustments.”
University officials said that they wanted to be “clear and transparent” about the changes to their housing policy and that they recognized the “trying times” students and their families are living through.
Colleges and universities felt the sting of refunding housing and dining fees in the spring, coughing up millions of dollars. Liberty University notably offered a flat $1,000 as a partial rebate. Other institutions initially dragged their feet on giving refunds in the spring, often relenting only after student outcry.
“It was painful. It was basically a quarter of revenue for housing and dining that they had to give back,” Robert Kelchen, an associate professor of higher education at Seton Hall University, said of colleges’ experience in the spring. In many cases, institutions had already committed to spending that money.
How Colleges Balance the Books
The two main revenue sources for institutions are tuition and housing. “It varies considerably across colleges,” Kelchen said. Housing is “probably most important for small private colleges.”
“Someone has to pay the bills for housing and dining,” Kelchen said. Often those costs are tied up in leases or bonds, or hefty food-services contracts. Either students or colleges are going to have to foot the bill.
While the CARES Act, which provided $14 billion to higher education, buffered some of the losses from housing and dining refunds, Galbally said that forfeiting that income again this fall could be damaging because institutions rely on it.
North Carolina’s governor signed a bill this month to protect colleges and universities that denied tuition refunds to students after in-person learning was suspended in the spring. The new law provides immunity from legal action for institutions that decline to refund students’ housing and dining fees after March 27 as long as decisions are made in the name of public health and safety. The UNC system was accused in a class-action lawsuit of failing to appropriately reimburse students when they were forced to switch to an online format.
The University of North Carolina system issued an addendum to its housing contract, which students received on June 22. It stated that the system’s universities would not be obligated to issue partial refunds or credits if the normal housing term was interrupted as a result of the coronavirus.
Students quickly created a petition demanding that the system refund their housing money in 2020-2021 if they are evicted from residence halls. Over 39,000 signatures have been collected.
The University of North Carolina at Greensboro updated its Covid-19 FAQ page to state: “The UNC System issued guidance to all its institutions about the possibility that housing and dining refunds would not be available, particularly without state or federal financial relief, if COVID-19 further impacts students and forces them to leave campuses and return to online learning.
“Some have interpreted this guidance as a definitive decision not to issue refunds under any circumstances, but that is not accurate. If the UNC System institutions are able to offer financial relief to students — in the form of refunds or other measures — we would certainly like to do so. Regrettably, the current uncertain economic environment and health outlook precludes us from making any definitive decisions or commitments now on future refunds.”
The Chapel Hill campus’s housing office posted on Twitter that the current plan is to issue prorated housing refunds as it did in the spring should the pandemic necessitate another closure.
Western Carolina University updated its residential living agreement to state that the university “shall not have the obligation to issue a partial refund or credit for such interruptions or adjustments” if residences close due to health risks.
North Carolina is not the only state where colleges are facing criticism from students over their refund policies.
Washington State Reverses Course
On July 1, Washington State University sent an email to students outlining an addendum to housing policies. It stated: “We will not issue any housing refunds if students must unexpectedly vacate university housing due to changes in university operations resulting from COVID-19 in the 2020-2021 school year. We know this is a difficult decision to hear, which is why it is important that you know this up front.”
Separately, WSU issued a 2.5-percent increase to housing and dining-services fees for the coming academic year.
On July 7, the university amended the addendum after receiving considerable backlash. Earlier that day, WSU’s student government had issued a statement on social media calling for the administration to retract the addendum. A petition calling the change “unethical” garnered 6,500 signatures before administrators reversed it.
Now, if public-health officials order students to vacate residence halls as a result of Covid-19, the university will grant them a refund or a credit.
After the spring semester ended early at Washington State, the university issued more than $11 million in refunds. This fall WSU will house 2,000 fewer students in order to comply with the state’s health and safety mandates. Officials estimate the loss in housing and dining revenues will total $20 million.
But if colleges and universities require students, particularly underclassmen, to reside on campus in the fall and then not offer refunds in the event of another shutdown, could they get themselves into legal trouble?
“A number of schools are attempting to put a clause in their housing contracts,” Galbally said. “I just don’t think it’s legal.” He said it might be up to the courts.
That hard-line stance could be harmful for business, but it might benefit institutions looking to de-densify.
“It could make students think twice about living on campus — which could be the goal of some of these,” Kelchen said.
Officials of the University of Maryland at College Park mentioned in their statement that they want “parents, caregivers and students to make informed decisions about housing and finances in the fall, as we work to reduce density on our campus and prioritize health and safety of our community.”
But Kelchen isn’t entirely convinced institutions will hold firm on that stance. Peer pressure, bad publicity, student protests, or legal action could sway their minds.
He wondered aloud if the threat of a lawsuit or public shaming and media attention would be enough to persuade colleges to offer refunds.
Galbally, speculating that most colleges will ultimately decide against returning to face-to-face learning in the fall, offered a bit of sympathy for the people in the trenches.
“I would hate to be a dean of students today,” he said.
