Some colleges, including Harvard, Columbia, Middlebury and Swarthmore, have agreed to refund unused room and board. Others are offering credits or haven’t decided what to do, according to Jim Hundrieser, a vice president at the National Association of College and University Business Officers.

Payments can add up. Small residential institutions, for instance, may be refunding $2 million to $3 million, while large schools with several thousand on-campus students are likely to return $8 million to $20 million or more, Hundrieser said.

For individual students, the funds can be quite a boon in an economic crisis. A college charging about $8,000 for a semester’s room and board that canceled midway might be sending students a check of about $4,000.

The federal suits vary in their demands. The Anastopoulo Law Firm in Charleston represents students at roughly a dozen schools, including Drexel, and is seeking a partial return of all unreimbursed payments.

In its suits on behalf of California public college students, Chicago-based DiCello Levitt Gutzleris is asking only for the return of student fees for such items as transportation and student organizations, which can nevertheless total thousands of dollars a year.

Both the University of California and the California State systems have already agreed to return unused room-and-board. Cal State said it’s still providing services, such as counseling, and will refund fees “that have been unearned by the campus.”

Big Target
However the complaints are decided, they highlight the stakes for the $600 billion-plus a year higher education industry. Public universities rely on tuition and fees for 20% of their total revenues; private non-profit colleges, 30%, according to the most recent federal data.

In the fall, if many schools open only online, they would forfeit room and board fees and face pressure to charge less tuition. Many are predicting that the pandemic will put financially fragile institutions out of business.

Colleges can expect to see more suits soon, threatening what attorney Anthony Pierce called “an economic tsunami.”

“The plaintiffs’ bar sees an opportunity here,” said Pierce, a partner heading the Washington office of Akin Gump Strauss Hauer & Feld LLP who recently alerted colleges about the suits’ risks.