As colleges and universities across the country shut down campuses and shift courses online overgrowing concerns over the coronavirus. Many are facing the same question from parents and students: will I get my money back for dorm and meal plans?
Some universities are offering a prorated credit or refund for the unused portion of room and board charges. Since classes will be taught online, and students will be able to complete the semester online, tuition will not have to be refunded.
Room and board is a sizable chunk of what students pay each semester, and the fees are often excluded from scholarship calculations. The College Board report states that students at a public four-year universities paying in-state tuition spend on average 43 percent of their budgets on room and board fees. For out-of-state students, room and board makes up 27 percent of budgets, and for students at private four-year colleges, 24 percent of budgets are room and board fees.
For colleges relying on these auxiliary fees to support their operating revenue, refunds could be devastating. Significant refunds could cause real problems and create a budgetary hole.
It's unlikely that colleges will receive insurance payouts for refund-related revenue hits.
“Because colleges are sending students home as a preventative measure, not because of an event that triggers coverage under their property or business interruption policy, these refund claims will likely not be covered,” said Bret Murray, who runs the higher education strategy practice at Risk Strategies Company, a national insurance brokerage and risk management firm.