Can ASU legally not refund students amid COVID-19?

Business News | 26 Mar |

COVID-19 has impacted nearly every aspect of daily life, from grocery stores, restaurants, small businesses, traveling, working remotely and has caused disruption in the education industry from primary and secondary education, to community colleges and universities across the state. Arizona State University, which is one of the largest public universities in the country, has been responding to the COVID-19 pandemic accordingly to prioritize the safety of students, faculty and staff.

On March 16, ASU transitioned all of their in-person classes to online for the remainder of the spring 2020 semester. Here is the statement issued by ASU on March 16: “With new guidance from the Centers for Disease Control and Prevention and the Arizona Department of Health Services, ASU has made the decision to extend online classes through the end of the spring semester. We are already in this mode and off to a great start with more than 14,000 classes being offered online. Details on continued online instruction for students will be communicated by faculty directly to students. University housing will remain open for those who must stay and essential services will continue to be provided to students who remain with us on campus. Although this shift in learning has been extended, the university continues to remain open. This includes computer labs, libraries, food service, health clinics, counseling services, research labs and all other aspects of the university. The university has already canceled all public events on campus that are not directly related to the teaching and research mission of the university.”

While moving all in-person classes to online was a precautionary measure by ASU, since then, on March 24, ASU confirmed there are 15 reported cases of ASU students who have coronavirus. 

While this development is important to know for ASU students, staff and parents, there are more questions amid COVID-19 in regard to the thousands of students who were living on campus and were recommended to move out of the dorms. What is the impact of COVID-19 financially for students who left the dorm mid-semester?

ASU has not issued a statement as to whether or not they will refund any money — paid for room and board — for students who have left the dorms, which poses an important question for in-state and out-of-state students: is it legal for ASU to decide to not refund money to students? An ASU spokesperson said in an email that anyone who wants to remain in a residence hall can stay.

We spoke with Robert Mann, senior attorney at Radix Law who concentrates in commercial litigation law about ASU’s legal responsibilities to students amid their coronavirus response.

“From a statement posted on the website on March 16, (my interpretation is that) ASU strongly recommended that students do not return to on-campus housing and it said. ‘university housing will remain open for those who must stay’ and so initially it seemed as if ASU was instructing the students not to return,” Mann said. “Most recently, ASU is now saying they might consider a refund in the future.”

For example, the University of Arizona offered students an option where if they had other suitable arrangements to not return to on-campus housing and had moved out of the dorms, they offered students two options for rent: either a 10 percent credit for the 2019-2020 academic year housing will be applied to the student’s Bursar account in May or a 20 percent credit will be applied to the academic year 2020-2021 on-campus housing.

If ASU did not offer students a refund (which can be about $3,500 for housing for the rest of the semester), Mann said ASU could be breaching the terms of the Housing Licensing Agreement for the 2019-2020 year. 

“The license agreement under general provisions says that, ‘University housing reserves the right to cancel room assignments at any time due to safety, health or administrative reasons.’ So when you read that with the March 16 announcement that students could essentially only come back to campus if they must, it seems to me that ASU is breaching the agreement; they’re canceling it but they’re not offering a refund,” Mann said.

“It could also be a constructive breach of the agreement … I think many students felt that they could not return to the campus so that would be a breach of good faith,” Mann said.

“From a personal perspective, I’m hopeful that ASU will reconsider and come to a different conclusion or a different resolution, but as of now it seems to me they’re forcing students off-campus but refusing to give them a refund.”

An ASU spokesperson said in an email that, “at no point in time did the university recommend students not return to campus, nor are we forcing students off-campus.”

Mann said he hopes that ASU will act in good faith and not breach the Housing License Agreement, or that ASU offers a credit that students can put towards their account at the end of the semester or towards housing expenses for the 2020-2021 academic year.

“From a business perspective, if it makes sense to come to some resolution or settlement, then that’s what’s best for the parties, I would hope that ASU would consider following a more proactive approach like the University of Arizona is doing in offering the credit or something that will help the students and parents, many of whom who are going to be going through some real financial difficulties in the future.”

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