The University of California may owe past professional students more than $39 million after an appellate court upheld a ruling Friday that the university had unfairly raised fees.
The First District Court of Appeal responded to a class-action lawsuit, first filed in October 2004. The lawsuit charged the university with a breach of contract for increasing fees “after (students) had already enrolled and received bills.”
The university was responsible for unfair fee increases against three different subclasses of professional students at UCLA and UC Berkeley during different academic periods of the 2002-2003 university year according to the suit.
The university has until Dec. 12 to determine whether it will choose to appeal the decision.
The appellate court decision stated that “implied contracts were formed between the university and respondents.” The decision also ruled that the university “breached its contracts … by raising the educational fees for these terms after the students had received bills specifying the exact amount to be paid.”
Lead plaintiff Mohammad Kashmiri, who graduated from Berkeley’s law school in 2004, said that the university not only violated its published promises not to raise fees for the duration of the professional program, but also charged those fee increases after students had already paid their bills.
“On top of everything else, it was unfair the way they did it in the middle of the semester,” Kashmiri said. “There were different fees. There were lots and lots of different fees that they just kept piling on.”
As of March 2006, the UC owed $33,825,712 to be distributed between up to 40,000 students, according to Andrew Freeman, a lawyer for the professional students. With a 10 percent rate of interest, the amount owed is now over $39 million.
Ricardo Vazquez, a spokesman for the university, said, “We’re disappointed with the ruling and it was a lengthy opinion, so general counsel is analyzing the opinion to see what the university’s best options are.”
The appellate court also upheld an injunction banning further fee increases. The UC has evaded this barrier by levying a “temporary surcharge” of $60 for all current students to cover the loss in revenue, Vazquez said.
Vazquez was unable to distinguish between the costs for students of a fee increase and the surcharge. “There is no difference: It’s a fee increase. The only difference is that the surcharge is temporary.”
However, Vazquez added that “the surcharge will last until remaining costs associated with the injunction are covered.”
Freeman said that the case has at least prevented the UC from making future promises about not raising fees.
“I think it’ll have a couple of effects. First of all, it will prevent universities from raising tuition after sending students bills. At least once you get your bill, you’ll know it’s the final amount that’s due,” Freeman said.
After representing the students in the Kashmiri case, Freeman is now representing a second group of UC students who he said faced similar problems with the university raising fees.
“The next case, which is referred to as the Luquetta case, … is for students who first enrolled for the 2003-2004 school year, and the university made the same promise to those students … and then broke that promise as well.”
In a March 2007 press release, Vazquez attributed recent fee increases to inflation and the ongoing struggle for the university to stay competitive.
He cited a 35 percent reduction in state support per student in the past 15 years as a large factor in the rising fees at the university.
Both Kashmiri and Freeman said that the case is important in showing the UC that it is not above the law, as well as in revealing that financial management problems are being passed on to students.
Kashmiri said the appellate decision was a “fantastic victory for the students,” acknowledging, however, that current students may have to bear the burden of those associated costs.
Freeman said, “I think it’s unconscionable that they are threatening to do that. These amounts are the result of mistakes that the university made, not current students. … The university should pay for mistakes out of its own pocket, not out of the pockets of current students.”
Vazquez said that it was too early to tell whether current students will have to bear the burden of the refunds owed to past students.
“At this point, the university will have to explore a number of options. I think it would be premature to speculate on what the options will be,” he said. “General counsel is looking at the ruling itself and nothing has been decided about what the university will do.”