College refund lawsuits make slow progress
When the coronavirus pandemic prompted colleges and universities to shut their doors last spring and send students home for virtual learning, many families cried foul and fought back in the courts.
More than 200 lawsuits have been filed by students and their parents demanding a refund of at least part of their tuition, room and board, and other fees.
The common thread in these suits: The education they paid for was not the education they got.
As one California Polytechnic University student reportedly said, “I’m not paying full price for YouTube University.”
Over the past year, several suits have been dismissed and most of the others continue to slowly work their way through the courts.
But earlier this month, parents scored a courtroom victory in a Florida class-action case involving fees collected by Miami-Dade College, when a judge refused a motion to have the complaint against the college dismissed. The judge’s ruling could have broader implications regarding similar suits around the country.
“We have great empathy for everyone affected by (the pandemic), including the schools, but this order would apply to millions of students who have already paid these exact ... charges” at many other colleges across the country,” said Adam Moskowitz, the attorney who handled the class-action case.
Moskowitz said he will file similar cases seeking class-action status on behalf of students who attend other schools in Florida. The ruling against Miami-Dade has been appealed.
In many cases, colleges offered refunds for room and board and meal plans that were paid for but went unused because of the pandemic. However, some schools refused to offer tuition refunds because of their own financial struggles.
Generally speaking, some schools argued that they didn’t have “contracts” with the students, and therefore reimbursement for room and board and user fees was not necessary.
The court cases can be divided into two types of lawsuits. One is for COVID-19-related tuition reimbursement; the others are asking for refunds on room and board or fees for such things as lab supplies, athletics passes and transportation.
The tuition lawsuits face an “uphill battle,” said Mark Kantrowitz, a college financing expert and president of Cerebly Inc. “That’s because most colleges did not have a different tuition rate for online education, even if they had an online education program prior to the pandemic.”
However, Kantrowitz said, the cases seeking reimbursement for room and board and fees “are more likely to be successful. For example, housing agreements do not provide for removal from the dorms in the event of a pandemic.” The only reason usually given is for “conduct reasons.”
“Since the housing agreements were drafted by the colleges, that omission will be held against them,” he said.
To patch that leak, some colleges amended their housing agreements for the current 2020-2021 academic year to address removal for COVID-19 reasons, Kantrowitz said.
Meanwhile, these continue to be anxious times for college students. In a January survey of more than 1,000 students by CollegeFinance.com, about 46% said they were attending classes in person, while 54% were attending virtually.
And to no one’s surprise, about 60% of both virtual and in-person learners rated their current stress levels as “high” or “extremely high.”
It is not unusual for people who change employers to lose track of their retirement accounts. If they fail to transfer the account properly, and the account becomes dormant, after two years the funds in the account are turned over to the state as unclaimed property. State laws vary a great deal on what happens next.
Anita Mukherjee and Corina Mommaerts, faculty members at the Center for Financial Security at the University of Wisconsin-Madison, have found that many of these accounts — which can run into the tens of thousands — remain unclaimed because most states are not allowed to link them to a Social Security number, and the states make no attempt to contact the account holders.
The accounts are listed as unclaimed property in the state in which they were established. And unless account owners do a state search of unclaimed property, their accounts will remain dormant for many years, perhaps forever.
Mukherjee and Mommaerts also point out that the state of Wisconsin is an exception. The state links accounts to a Social Security number, and does contact people whose accounts have become dormant.
Most employees with retirement accounts know that when they leave their jobs, it is their responsibility to take the proper steps and transfer their retirement accounts.
Unfortunately, some fail to take that action, or they may not even know they have a retirement account. Some companies automatically sign their employees to a retirement account without their knowledge. In other cases, individuals are simply too careless because the size of the account is small.
State databases are free to access. There is no reason for you not to search the unclaimed property database in your state to see whether there is any asset in your name. Generally, all you have to do is search by personal name or business name to determine if there are any assets under your name. Go to missingmoney. com, a free site managed by the National Association of Unclaimed Property Administrators, for a free search by state.
You may find that it is not difficult to have the funds transferred to you if you are the rightful owner of the asset. Several years ago, I used the site to recover thousands of dollars from a CD I was not aware of, left to me and my children by a deceased aunt.
According to Sarah Brenner of Ed
Slott & Co., if you recover funds from the state from a retirement account, you are allowed to roll over these funds into a retirement account with a procedure known as self-certification. (See her article, “IRS Adds New Reason for Self-Certification of Late Rollovers,” at www. irahelp.com.)
Revenue procedure 2020-47 covers this situation and provides a sample letter for you to send to a trustee to allow the rollover. If you don’t do a rollover, you may be subject to income taxes and possibly an early withdrawal penalty if you are younger than 59 ½ .
If you do leave your job and have a retirement account, make sure you take the proper steps to transfer the account to another financial institution. If you allow the account to become dormant, you will lose the ability to have the account increase in value. Once the account becomes dormant, you no longer earn income on the account. You also lose any potential capital gain, and you may be subject to tax penalties.
We are facing a gender equality crisis. The numbers have made for a steady string of headlines recently: We hit a 33-year low in women’s labor participation in January, and nearly 3 million women have dropped out of the workforce compared to a year ago. Since February 2020, women have lost a net of 5.4 million jobs, accounting for 55% of net job loss in the U.S. during the pandemic, despite making up slightly less than half of the workforce. On a net basis, all 140,000 jobs lost in December 2020 in the U.S. belonged to women, and 2.2 million women have left the workforce entirely. Especially impacted are women of color, who comprise a large portion of the workforce in industries that have been hardest hit by the pandemic, including hospitality, education and retail.
In the short term, unpaid bills are piling up and pushing many women into poverty; in the long term, financial hardship is hampering women’s wealth accumulation, stalling progress on economic freedom, which in turn will impact economic growth. On the business side, diminished gender diversity will harm organizations’ bottom lines. McKinsey research has repeatedly shown the link between low gender diversity and underperformance.
Reversing this troubling trend and continuing to build women’s contribution to the workforce must begin with organizations redoubling their efforts to diversify their own workforces. One key strategy is expanding access to flexible work. Broad access to these working arrangements can encourage households to more equally distribute the burden of domestic work — and ultimately relieve women, who are currently more likely to drop out of the workforce due to family obligations.
The details matter though, and a poorly designed flexible work program can reinforce some persistent disadvantages for women in the workforce. At the same time, employers must offer flexible work or risk a severe talent drain. Research we’ve done at Mercer in partnership with AECOM showed that 56% of workers would try to switch jobs if their employers do not retain flexible work after the pandemic.
Flexible work can create a level playing field for people who carry greater care obligations at home. But in practice, managers have a history of valuing work done in the office more highly than remote work. Our research has shown that before the pandemic, about 44% of managers felt this way about remote work. It’s very likely that with the experience of the pandemic, more managers recognize the full value of remote work. But organizations must address the concern that women who choose to work remotely at least part of the time may see their careers suffer as a result — and prevent that outcome.
Organizations seeking to expand their flexible work options without disadvantaging women in their workforces should follow three broad strategies to avoid potential pitfalls:
Maintain opportunities for engagement
More women working outside of the office at least part time may deprive them of a key asset for career building: workplace connections and mentorships. If managers and leaders aren’t able to provide resources for individuals while they are working from home, it will further erode opportunities for these groups.
Employers can find ways to ensure that flexible work doesn’t lead to diminished opportunities to make lasting connections and engage with mentors. After all, internal connectivity has generally not suffered during the pandemic: More than 80% of organizations have reported that their engagement level is at least consistent with what they experienced before the pandemic.
Supporting those with flexible work arrangements will require carrying forward some of the practices that helped employers maintain engagement over the past year.
This includes virtual social events for both remote and on-site workers, and mentorship programs that cross the flexible work/office work line.
Ensure remote work is recognized
Organizations that increase their flexible work offerings need to foster a mindset shift among managers when it comes to the value of remote work. HR leaders can educate managers on the facts about remote work productivity, drawing on the pandemic as a lesson, including that 90% of employers have found that productivity has either stayed the same or increased between March and October 2020.
Employers should strongly encourage managers to carve out facetime with remote workers to ensure that remote work is productive and aligned. But managers also should model new flexible work practices to avoid implicitly signaling a bias toward in-office work.
Organizations need to consider redesigning performance and career management processes to ensure that any such bias doesn’t impact flexible workers, and continue monitoring and comparing outcomes between flexible workers and full-time office workers. This requires adopting processes that rely more on results and less on observation. For some positions, metrics that allow for quantifiable performance review already exist, like customer satisfaction scores for customer service jobs. For others, managers need to create and actively manage goals that employees can be measured against.
Be open to different kinds of flexibility
Of course, while remote work and flexible work have both gained greater acceptance over the past year, not all segments of the workforce enjoy the same access to this flexibility. Frontline and health care sectors don’t enable much — if any — flexibility on where and when employees can perform their jobs. As some of these roles and sectors disproportionately employ women, greater economywide flexibility for those who can work from home could actually increase gender inequality.
While it’s true that not every employer can offer remote work, all can improve their flexibility — in when their employees work, how they work and what work they do. Organizations need to identify what opportunities exist in their own workplace, and what kind of flexibility offers the most help to employees.
In 2019, women’s labor participation rate was just shy of an all-time high. Women had made significant progress in share of managerial roles. Women’s poverty rates were falling. To return to that trend and draw women back into the workforce, retain talent that is demanding more options in the workplace, and boost corporate performance through gender diversity, organizations must embrace the many lessons of flexible work that we have learned over the course of the pandemic.