Tag Archives: Universities

COVID-Related College Tuition Refund Claims Dismissed

Since the global pandemic forced most college campuses to resort to online instruction in March 2020, college students across the country have filed more than 150 lawsuits against their schools seeking refunds of tuition and related fees.

This month, a federal judge in Boston made the first dispositive ruling in such a case against Northeastern University – tossing out most of the claims asserted by the students in a putative class-action matter.  Judge Richard G. Stearns of the District of Massachusetts found in Chong v Northeastern University, 20-10844-RGS, that the contract between the university and its students (the Financial Responsibility Agreement, “FRA”) did not specifically include a right to in-person instruction.  The Judge noted that the FRA ties the payment of tuition to the registration for courses, “not to the receipt of any particular method of course instruction.”

The Judge also dismissed the students’ claims seeking a refund of certain student fees, such as student activity fees, finding that they paid the fees to support certain campus facilities – not necessarily to gain access to them.  Thus, the Court gave no credence to the students’ claims that they should receive a refund of activity fees because the school prevented them from accessing those facilities due to the pandemic.

However, the Court did allow the students’ claims seeking a refund of campus recreation fees to go forward, finding that the students’ payment of those fees may have implicitly created a right to attend home athletic events and use the campus gym and fitness facilities, which ceased on March 12.

Judge Stearns’ ruling may be a sign of things to come for the many similar lawsuits currently pending against colleges and universities throughout the country.  However, as in this case or any breach of contract action, these rulings will likely turn on the specific language of the applicable contract between the institution and the student.

Proposed Student Visa Rules will Upend Decades of U.S. Policy and Practice

On September 25, Immigration and Customs Enforcement (ICE), the DHS agency with jurisdiction over F-1 foreign student visa holders, published new proposed regulations that would end the long time U.S. practice of issuing “Duration of Status”  to F-1 students. Instead, F-1 visa holders would be limited to 2 or 4 year visa terms depending upon their country of origin, and be required to reapply for F-1 Status through USCIS to obtain extensions, or to leave the United States and apply for an extension .  The proposed regulations were immediately criticized by the higher education community. The rules were called ill-conceived, misguided, unnecessary, and a burden to an industry that has already seen a steady decline in international student admissions. Continue reading Proposed Student Visa Rules will Upend Decades of U.S. Policy and Practice

OCR Guidance on Disability Rights and Distance Learning During the COVID-19 Pandemic

On April 3, 2020, the Office for Civil Rights continued its guidance on how institutions can implement distance learning while complying with federal civil rights laws. This guidance is timely because, as we all know, distance learning due to COVID-19 is redefining how most educational institutions operate. When all levels of academic institutions had to close their doors due to stay-at-home orders, many of them opened the proverbial window by turning to online education.  Despite its increasing popularity over the past decade or so, distance learning remains an emerging and potentially scary (as well as exciting) landscape for many institutions as they navigate purchasing/installing new technology, implementing new methods of teaching, and ensuring connectivity with students. OCR’s guidance provides a roadmap to this new territory.

In further response to some institutions declining to use distance learning at all because they were unsure of being able to provide a free and appropriate public education (K-12) or appropriate accommodations (postsecondary) to students with disabilities, OCR reiterated: Continue reading OCR Guidance on Disability Rights and Distance Learning During the COVID-19 Pandemic

U.S. Department of Education Posts Updated COVID-19 Guidance for Institutions Following Enactment of CARES Act

Late on Friday, April 3, the Department posted updated guidance for institutions that recognizes the regulatory flexibilities authorized by Congress in the CARES Act, but also addresses other areas including Clery Act,  Distance Education, Foreign Schools and FERPA, among other issues relevant to the COVID-19 interruption. The guidance is effective through June 30, 2020 unless otherwise extended by the Department. The Higher Education Relief Fund portion of CARES ACT is not addressed and will be the subject of future guidance.

ELECTRONIC ANNOUNCEMENTS

– April 03, 2020
(OPE Announcements) Subject: UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19)
https://ifap.ed.gov/electronic-announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19

Lease Points Colleges and Universities Should Not Miss

DO NOT BE FOOLED BY “STANDARD FORM LEASES” and
BEWARE OF CHANGING RULE ON TREATMENT OF LEASES IN TITLE IV COMPOSITE SCORE

There is no such thing as a “standard lease,” even if the document has that title at the top.

Julie Mebane, Partner (Real Estate), Duane Morris LLP

If your institution is reviewing a lease form and you are considering signing it for the tenant, make sure that you don’t gloss over it in the belief that its terms cannot be negotiated.  Usually, many lease terms can be modified and the tenant’s position can be enhanced if you pay attention to its language, especially a few important provisions:

  • Consider starting out by having both landlord and tenant sign a term sheet with the key business points summarized.  This can avoid confusion and disagreements later when the lease is reduced to writing.
  • Pay close attention to the description of the leased premises.  Make sure that the location and the number of rentable square feet are included and accurate, and consider including a space plan as an exhibit.
  • Double-check the rent calculations in the lease.  With regard to periodic rent increases, you may want to include a chart that summarizes the timing and amount of rent increases, rather than just a description like “3% rent escalations per year.”
  • If the tenant will be paying operating expenses as part of its rent, consider negotiating a cap on the amount of annual increases that can be passed through to the tenant.
  • Ask the landlord to pre-approve and describe in the lease any up-front alterations or other work of improvements the tenant needs to do on the premises.
  • In the use clause, more general language benefits the tenant.  Try to include the right to conduct “office and other administrative uses” or possibly “all other lawful uses.”  You may enhance the tenant’s right to assign and sublet in the future by broadening the use clause.
  • With regard to the parties’ respective maintenance and repair obligations, be sure there is a complete description of the landlord’s duties.  Try to include structural maintenance and repairs, floors, ceilings, roofs, windows, HVAC and building systems, interior plumbing and wiring in the landlord’s list.
  • Get a representation from the landlord that the premises and the property are in compliance with applicable laws and in good operating condition and repair as of the commencement date.
  • Try to negotiate the surrender language so the tenant does not need to remove all of the tenant improvements, cabling and furniture, fixtures and equipment at the end of the term.
  • Beware of leased spaces formerly occupied by Title IV institutions. See our [date]  blog post on that subject.

These provisions of a lease, and many others, can usually be negotiated and improved for the tenant.  Don’t consider any lease, even a pre-printed form that says it’s “standard,” to be carved in stone.

New and Extended Lease Rules Are Changing for Title IV Composite Score Purposes

Katherine Brodie, Partner (Education), Duane Morris LLP

On September 23, 2019, the U.S. Department of Education published a Final Rule that applies to all higher education institutions that participate in the federal student financial aid programs under Title IV of the Higher Education Act (“Title IV programs”).

Specifically, the Final Rule amends the annual Title IV financial responsibility composite score to take into account the Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) 2016-2, which requires that leases be treated as both right-of-use assets and liabilities. Public entities must adopt 2016-2 for leases entered into after fiscal years starting on or after December 15, 2018. Private entities must adopt the new standard starting January 1, 2020. FASB, however, has proposed delaying the private entity implementation date to January 1, 2021.

The Department of Education’s Final Rule exempts all leases entered into before December 15, 2018 from application of 2016-2 for composite score purposes. For leases entered into on or after December 15, 2018 (which the Department states can include extensions or modifications of pre-December 15, 2018 leases), auditors must apply FASB ASU 2016-2 and, as a result, some institutions’ composite scores may be adversely impacted. Since FASB ASU 2016-2 does not subject private entities to the new standard until at least January 1, 2020, there is an argument that the Department should not have an institution’s official composite score calculation reflect the new lease accounting standards until such time as the new standard is required under GAAP, but the Department has not yet clarified its position on this point (despite several pending requests for clarity on that point). Bottom line, as institutions negotiate new leases or seek to extend or modify current leases, they should consult Title IV counsel and their auditors for guidance because certain lease terms may significantly impact the carrying value of a leased asset under the new FASB standard as applied by the Department of Education.

U.S. Department of Education Confirms New Reporting Requirements Apply to Public Colleges and Universities

On June 3, 2019, the U.S. Department of Education issued a Q&A document regarding compliance with the BDR Rule that confirmed that the reporting requirements for certain “triggering” events will be enforced at all institutions, including public colleges and universities. This information supplements the Department’s March 15, 2019, guidance regarding the 2016 BDR Rule.

The Department’s Q&A makes clear that public institutions are required to report, pursuant to 34 C.F.R. 668.171(h), the following events within the stated time periods:

  • Borrower-defense-related lawsuits brought by a federal or state authority: within 10 days after the institution is served with the complaint and then again within 10 days after the suit has been pending for 120 days.
  • All other lawsuits: within 10 days after the institution is served with a complaint, then again within 10 days after the court sets certain deadlines relating to motions for summary judgment (MSJ) or disposition, and then a third time within 10 days after certain events relating to an MSJ or dispositive motion occur.
  • Any debt or liability arising from a final judgment in a judicial or administrative proceeding: within 10 days after a payment was required or the liability was incurred.
  • Any settlement, including settlements reached prior to the initiation of a formal legal proceeding: within 10 days after a payment was required or a liability was incurred.

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To read the full text of this Alert, please visit the Duane Morris website.