Students walk on the Quad lawn of University of Illinois college campus in Urbana Champaign image. Photo: Leigh Trail/Shutterstock.com

Colleges and universities across the country are beginning to figure out what the fall semester for students will look like. In-house counsel at the schools that have chosen to bring students back to campus full-time need to worry about furthering the spread of the new coronavirus and class action litigation over refunds for tuition, housing and service fees.

Making sure proper cleaning techniques are applied and fixing codes of conduct and housing contract language may be the best way to mitigate the risk of a lawsuit, attorneys who work in higher education told Corporate Counsel.

Dannelle Whiteside, general counsel and soon-to-be interim president of Austin Peay State University in Clarksville, Tennessee, said the administration at APSU has been focused on ensuring the necessary precautions are put in place to mitigate students' and employees' risk of exposure for the upcoming fall semester.

"I know it is difficult to say, 'Because I was on campus I got COVID-19,' but that is not going to stop someone from making the argument," Whiteside said.

To avoid litigation related to the spread of COVID-19, in-house counsel should start by advising their schools to follow the local and Centers for Disease Control and Prevention guidelines.

"There is a question about what kind of documentation should we have? Do we want people to sign a waiver with the assumption of risk type of language?" James Keller, partner and chair of the higher education practice at Saul Ewing Arnstein & Lehr in Philadelphia, said.

However, even getting students to wear masks while on campus may prove to be difficult, Keller said.

"You could build that into the codes of conduct and make it a condition of being a student," Keller said.

There are also issues of what to do with students with disabilities who cannot wear masks.

Class action lawsuits

If students do come back to campus and are suddenly asked to go home, colleges risk becoming a defendant in a class action lawsuit over tuition reimbursement. According to a recent survey from Carlton Fields, approximately 25% of all COVID-19-related class action lawsuits were filed against educational institutions seeks reimbursement of tuition.

Monica Khetarpal, principal at Jackson Lewis in Chicago and co-leader of the firm's higher education industry group, said lawsuits over housing and tuition reimbursement are inevitable.

"Schools have been making adjustments to housing contracts and to admissions agreements," Khetarpal said. "They are inserting clauses that say if the university is forced to go to online learning and if the dorms have to be vacated students will not be entitled a refund."

It is too early to tell how courts will rule on these kinds of lawsuits, Ed Cramp, a partner at Duane Morris in San Diego said. From his perspective, how education is delivered to a student is not something guaranteed by the university. However, the suits asking for a refund of fees for services not used could be problematic.

"The issue for the institutions is that many of them just don't have the money. It is not a matter of, 'Let me just write you a check,'" Cramp said.

APSU has not yet been served with a lawsuit over housing, tuition or reimbursement of fees. When the university went to an online model in the spring, Whiteside said students were encouraged to find off-campus housing but could remain in the dorms. Those students who left were given a prorated refund.

"That is a financial risk to us as well because we still have to pay debt service on those dormitories," Whiteside said.

Whiteside said the APSU would likely keep the dormitories open to students during the second wave of COVID-19 even if all classes are put online to ensure students have secure housing.  The tuition at APSU has not been raised this year, Whiteside said. She said the decision came from a recognition that many people are out of work because of COVID-19 and that it would not be fair to raise tuition during a time of uncertainty, rather than a fear of a class action lawsuit.

Arbitration

State and nonprofit universities may begin contemplating the use of arbitration agreements with their students to prevent a series of class action lawsuits.

"I think they're really helpful to both sides," Cramp said. "They can be done with lawyers or without lawyers. It allows for a quick resolution of things. It also allows the institution to prohibit class actions."

Forced arbitration may be a hard sell for academia.

"Higher education is very different than corporate America where arbitration clauses are routinely used," Khetarpal said. "They might not be as readily embraced in this environment."

An everlasting arbitration agreement between the students and university may not be the best idea. Khetarpal said it may be better to create a COVID-19-specific arbitration agreement.

"I wouldn't expect them to be as widely applied as they are in corporate America,"  Khetarpal said.