Colleges Won’t Refund Tuition. Autumn May Force a Reckoning.

If you didn’t get what you paid for, and the thing you bought cost five figures, it stands to reason that you’d get some of your money back.

But that is not what is happening with the nation’s residential undergraduate institutions this spring. While many offered partial refunds of room and board, administrators have held fast to the idea that nobody should get back any of their tuition payment.

The strange thing about this stance is that the colleges know that many people aren’t getting full value for their dollar. Administrators and professors from Northern Arizona University to the Ivy League have acknowledged the deficiencies. Class-action lawyers have noticed too, and they’ve filed suit against a range of name-brand institutions and are actively seeking additional plaintiffs.

So what should we expect from colleges and universities? Answering that question requires asking another one first: What are we really paying for when we decide to pay for college?

Most people send their children off to college to accomplish one (or all) of at least three goals: They want to stuff their heads so full of knowledge that they explode and then need reassembly into new and improved adult brains. They want their kids to find their people — the friends and mentors who will carry them through life. Finally, there is the credential: A diploma that means something to those who see it on a résumé, one that may also offer a chance to jump a rung or two up the economic ladder.

The coronavirus shows no sign of diminishing this year’s undergraduate degrees as a credential. But for the other two goals, the status quo can fall short.

The forming of lifelong bonds with peers or professors is awfully hard at present. And then there’s that growing and blowing of minds. It probably isn’t happening anywhere near as much online as it does face to face.

Experts on instruction understand, from having spoken to faculty members, that online teaching has not always gone well, even if professors deserve a ton of credit for transitioning as quickly as they did.

“They themselves are frustrated with the experience,” Flower Darby, director of teaching for student success at Northern Arizona University, told Inside Higher Education last month. “They know that this is not very good instruction for their students, and they want that for their students.”

Jonathan Zimmerman, a professor who specializes in the history of education at the University of Pennsylvania, was more blunt in a recent Philadelphia Inquirer op-ed: “Most online instruction isn’t as effective as the traditional kind, which is why elite schools have consistently resisted it.”

If this is all true, shouldn’t some money be coming back to students?

President Paxson didn’t have time to talk by phone this week. But she did respond by email when I asked what refunds would be coming to Brown undergraduates, given her invocation of value.

The answer was this: Nothing. She wrote that a Brown degree retains its value and that students are still learning. And then came an assertion that could launch a thousand late-night dorm debates.

“During this time of national crisis, no aspect of our daily lives are what anyone expected,” she wrote. “And none of us expects to be compensated for the various aspects of our lives that we all expected to have — travel, gatherings with families and friends, attending recreational events, and yes, on-campus education.”

She’s right on the disruption and on the overarching disappointment. But many companies have in fact issued refunds. That doesn’t obligate colleges to follow suit, but how might they at least address the question?

There are two ways, according to Professor Zimmerman at Penn, whose forthcoming book about college teaching is called “The Amateur Hour.” First, put a value on what you’ve lost. Then figure out exactly where the money should come from.

He said he had no problem with families asking for money back, even though the lost value is not the fault of any educational institution. But he also said that he had no earthly idea how to put a value on the loss.

It may depend on the ins
titution, what it costs to educate an undergraduate and how much subsidy, if any, a student receives.

At public universities, the state government is generally subsidizing at least part of the cost for in-state students. Families might quite reasonably assert, however, that any “subsidy” comes from taxes that they’ve already paid.

At well-endowed private institutions, there is sometimes a different subsidy, even for those who pay the full sticker price: The cost to educate a student is higher than the cost of tuition, room and board.

Consider a school with an $80,000 retail cost to attend. If the total amount of money necessary to educate a student is $100,000, then philanthropy may be providing everyone at least $20,000 of value more than anyone is paying out of pocket. (That $20,000 would effectively pay for the last fifth of the school year, which happens to be about the same period that many students will have been in online classes.)

Perhaps you can find some solace in thinking about this period as one of having lost the opportunity to benefit from a subsidy, not one where you wasted tuition. And if that’s cold comfort or it doesn’t apply to your non-subsidized school, consider Professor Zimmerman’s second question: Who should pay your refund?

It’s tempting to suggest that schools — particularly well-funded ones — tap endowments. Brown had $4.2 billion as of the middle of last year, but it can’t just get at all of it. Many investments are not liquid. Others are restricted by law to whatever use the donor specified. At Brown, the endowment is actually made up of hundreds of such separate funds, according to a spokeswoman.

Mass refunds that come out of regular operating budgets could imperil the jobs of administrators, janitors and instructors who lack tenure.

Consider, too, that schools are also thinking about the future. If they grant refunds now, what happens if they lose all of the revenue from summer rentals of campus facilities? And then there is the uncertainty around financial aid budgets and the likelihood that an ever-increasing number of families will be among the millions who are losing jobs or seeing their incomes fall.

So two things seem certain: First, any issuance of unilateral refunds probably diminishes the future undergraduate experience somehow. Cut enough — through firings or food or ceasing construction or raiding endowments — and the value of a school’s brand can fall.

And second: Any class-action legal victory is a long-shot and would take a while, anyway.

So we look to the future — the very near future. With your next tuition bill, you should have at least a little leverage. You’re entitled to ask for more aid, and some schools are already nervous about getting students in the door if they say no to further discounts.

President Paxson’s op-ed warned that there could be dire consequences if students aren’t on campus and paying normal tuition in the fall. At schools that do not operate normally, families that don’t want to pay the quoted price can ask to sit out a term or two instead.

Requests for semesters or years off are normally the subject of rubber-stamp approvals. There may be more of them than ever, however, in the next few months. Students who make one will be daring colleges to tell them that if they do not enroll or stay enrolled, there may not be a place for them when they wish to return. But colleges that roll out the rubber stamps may see a big decline in tuition revenue.

As with so much pain to come in so many industries, we’re just getting started here. And with so much uncertainty ahead, the refund skirmish is a mere preview of the pointed questions that families will need to ask very soon.

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