Teaching Assistants: COVID and the Legal Relationship Between Students and their Universities

We have spent a lot of time over the last few years providing updates on cases in which students at colleges and universities, upset that their campuses closed due to COVID in Spring 2020, sued their educational institutions alleging breach of express or implied contracts and unjust enrichment.  The most recent installment in this series is here and links to others.  Max Schanzenbach (below left) and Kim Yuracko  (below right) provide a new perspective by placing the cases in a helpful theoretical framework in What Is the University-Student Contract, available on SSRN.

Schanzenbach and Yuracko (collectively the Authors) begin with the general observation that, in these cases, “some courts held that universities promised residential students a multifaceted in-person learning experience, while other courts held that universities merely promised students a course of study that would lead to a college degree.”  The paper assesses the cases from three perspectives on education.  Is the goal of eduction the acquisition of human capital?  Does education serve a sorting function by providing students with degree credentialing that then sends signals to relevant employment markets?  Or is education best understood on a consumption model, in which students pay for a broad experience, of which education is merely one component?  In their view, the best model for education is the acquisition of human capital model “under which students acquire knowledge and complex skills in a residential environment,” and if that is what colleges and universities are promising students, then COVID-related closures are far more likely to be considered breaches of the object and purpose of the contract between the institutions and their students than under the credentialing model.  In-person instruction, they contend is clearly a part of the deal.

Part I of the Article makes a fascinating case for the human capital model, based on things like data about the percentage of wealth tied up in human as opposed to physical capital and the difference a college education can make to one’s ability to succeed in the marketplace.  Young people who choose college are making an investment in human capital, and when we fund higher education (or when we used to fund higher education), we as a society are making a wise investment because such investments lead “to more economically productive, happier, and healthier people.”   

The Authors concede that there is some empirical evidence supporting the credentialing model.  Empirical studies indicate that “10 to 30 percent of the earnings differential between college and non-college workers is attributable to the value of the degree apart from skills.”  The authors spend only a paragraph on the consumer approach, which is a shame, especially in the contractual litigation context.  In the end, they need not decide the matter.  The different understandings of education overlap and are not mutually exclusive.

In Part II, the authors look at student handbooks as the partial embodiment of the contractual relationship of universities and their students.  The Authors reviewed forty student handbooks had have interesting things to say about the variety of things they found and did not find in the handbooks.  They then explore in more detail  the handbooks from Georgetown and Northwestern.  Courts that have reviewed claims brought by students alleging breach of contract in connection with COVID shutdowns have looked for express contractual promises or for language or conduct from which a contract can be implied. In assessing courts’ treatment of the manuals, the Authors divide such manuals into three categories, manuals with: no contract disclaimers, blanket disclaimers, and no disclaimers but with a reservation of rights to amend. 

My impression, and I have not done the deep dive that the authors have done, is that courts are reluctant to construe manuals as contracts regardless of the presence or absence disclaimers or reservations.  Most courts apply a rather formalist, textualist approach and don’t find binding contractual language.  In most cases, they find descriptions and puffery, but nothing indicating an intent to be legally bound. 

In most cases, I’m not sure that’s the wrong approach.  Sometimes, universities have language reasonably construed as contractual promises.  Sometimes, universities create implied contracts by, for example, charging twice as much for in-person learning what they charge for online education.  In such cases, courts find a breach of contract where schools shut down and did not offer appropriate refunds.  Rightly so.

However, in the usual case, it is not clear to me that the nature of the relationship between a university and its students is fit for contractual adjudication.  Students pay tuition in expectation of something individualized, incompletely conceptualized on both sides, and subject to change in response to circumstances beyond the parties’ control.  Going forward, if university counsel have not already noted in bold on the cover their handbook that the handbook is not a contract and that the university reserves the right to amend the handbook, they likely will all do so in response to the COVID experience.  

Finally, in Part III, the Authors offer a sophisticated, nuanced, and multi-faceted assessment of remedies.  They begin with the assumption, based on the human capital model, that the universities breached by shutting down in-person operations in Spring 2020.  Their breach might be excusable under various doctrines.  They then proceed to discuss the ways universities operated during COVID beginning in Fall 2020, including universities’ decisions to require vaccination or boosters.  The analysis is clear-headed and comparative in nature, noting differences between vaccine protocols in the U.S. and abroad.  From the human capital perspective, universities may not have had the contractual right to demand that their students get vaccinated, but such a contractual modification might have been justified by a good-faith belief that vaccinations and boosters would have a net-positive effect on the learning environment.  

The Authors’ work makes a valuable contribution in that, at least in the cases I have looked at, the courts that consider claims by students alleging that universities have breach contracts by shutting down in Spring 2020 never consider the three ways of conceptualizing higher education identified by the Authors.  The Authors make a case that, at the very least, the COVID shutdowns and vaccination requirements constitute breaches of implied or express agreements under the social capital model.  Whether the universities can establish defenses requires more extensive and individualized fact development.  The same is true for the determination of remedies.

This is fabulous scholarship.  I have been casually covering these cases for the last couple years, but my perspective has broadened in many dimensions from reading the piece.  It also epitomizes the value of joint scholarly ventures, as these two seasoned scholars bring such a great range of knowledge, methodological scope, and research resources to the project.