Apr. 7—A federal appeals court will decide whether Council on International Education Exchange violated its contract when the Portland-based nonprofit decided not to refund the costs of study abroad programs cut short by COVID-19.
The case reflects dozens of legal challenges by college students who have been trying to recoup tuition costs since campuses shut down last spring.
Annie Zhao, a Harvard College student from Texas, sued CIEE last summer for breach of contract and unjust enrichment. She sought class-action status in the U.S. District Court of Maine to represent other students and interns who were similarly sent home and not refunded any of their costs. CIEE filed a motion to dismiss, and a judge granted it. Zhao then took the case to the 1st Circuit Court of Appeals in Boston, and a panel of judges heard oral arguments in the case Wednesday.
Attorney Sigmund Schutz, who represented Zhao during the hearing, said the situation is comparable to staying at a Ritz-Carlton luxury hotel and ending up at a Motel 6. He said the contract allows for refunds.
"This is a case of study abroad minus the abroad," he said. "College students had their study abroad programs cancelled by CIEE, and they returned home, but CIEE kept 100 percent of the money they paid, both tuition and room and board."
Schutz sometimes represents the Portland Press Herald in First Amendment matters.
Attorney Chad Higgins, who represented CIEE, said the contract creates different obligations for refunds before and after a study abroad program has actually started. Because the programs started before the pandemic forced their cancellation, he said the nonprofit is not obligated to return any money.
"It is the line of demarcation where the risk switches from CIEE to the participant," Higgins said. "And that's fair because the line has to be somewhere in order for these programs to be arranged and in order for CIEE to make the arrangements ahead of time."
Law.com reported that as many as 200 class-action lawsuits have been filed since last spring on behalf of students seeking refunds. While the defendants are often colleges and universities, the arguments have been similar to the case against CIEE. The students are arguing they should not have to pay the same amount for online classes as they would for an on-campus experience. The schools are saying they did not break any specific promises made to students. Some judges dismissed these cases in their early stages, while others allowed them to proceed.
CIEE suspended all of its spring programs in March because of the pandemic, and nearly all students returned home. One of them was Zhao, who was studying at the University of Amsterdam in the Netherlands. The nonprofit's website said only those who could not finish their classes virtually would be considered for refunds.
The original complaint says the cost of a study abroad program through CIEE ranges from $15,000 to $25,000 per semester, and about one-quarter of that fee goes toward room and board. CIEE says it sends more than 15,000 Americans to study, intern and teach abroad every year. It also arranges for more than 30,000 international exchange visitors to the United States. The organization operates in 63 sites across 42 countries.
The organization's website indicates that it is operating 27 study abroad programs in 13 countries this spring, and it expects summer programs to go forward as well. It also advertises the "College Program Assurance Advantage," saying students have the option to change or defer their programs if CIEE cancels or suspends before the published start date. It also says students can get a full refund up to the day of departure for their programs.