Center for the Study of Ethics in the Professions at IIT

Policy Guidelines for Refund of Student Charges

Background

National attention has for some time focused on the matter of fair and equitable refund of student charges and fees. Since 1976, federal law has required that all institutions receiving federal student-aid funds have equitable refund policies. Within the higher education community the belief has grown that policy guidelines for voluntary self-regulation, developed by higher education representatives, are preferable to governmental definitions and regulations. To this end, the American Council on Education and other associations urged the National Association of College and University Business Officers to prepare policy guidelines for refunding student fees.

The guidelines were drafted by NACUBO's Student-Related Programs Committee and were reviewed by persons representing a wide range of institutions and professional responsibilities. Associations that have approved the guidelines are listed below. The guidelines have gained acceptance by officials in the U.S. Office of Education. Leo Kornfeld, Deputy Commissioner for Student Financial Assistance, lauded the effort as important progress toward selfregulation and indicated that, as a result, the USOE will not proceed with developing regulations for tuition refund policies of colleges and universities.

The guidelines summarize elements of fair and equitable policy in refunding tuition, room, board, and other charges for students who withdraw from their studies or otherwise discontinue their use of an institution's services before the end of an academic term. They offer a balanced approach to issues related to refunds, including the financial commitments incurred by the institution and the responsibility to treat both withdrawing and continuing students fairly. Overall, they allow institutions to ensure that their students' rights to fair and equitable treatment are fully recognized.

Colleges and universities are urged to use the guidelines to evaluate and, where necessary, modify current institutional policies and practices to meet the spirit and intent of the guidelines.

ASSOCIATIONS that have given formal support, in principle or in toto, to Policy Guidelines for Refund of Student Charges: American Council on Education; American Association of Collegiate Registrars and Admissions Officers; American Association of Community and Junior Colleges; American Association of State Colleges and Universities; Association of American Colleges; Association of Catholic Colleges and Universities; Association of Jesuit Colleges and Universities; Council on Postsecondary Accreditation; National Association of College and University Business Officers; National Association of State Universities and LandGrant Colleges; Council for the Advancement of Small Colleges; National Association of Schools and Colleges of the United Methodist Church; National Association of Student Financial Aid Administrators; United States Student Association. The National Association of Independent Colleges and Universities commended the guidelines to its members.

Guideline One. The governing board of the institution should review and approve the schedule of all institutional charges and refund policies applicable to students. The pricing of services and refund policies have important consequences to students, parents, the institution, and society; as such, pricing and refund policies should receive board attention and approval.

Guideline Two. Institutions should seek consumer views in the process of establishing and amending charge and refund structures. Decisions regarding institutional funds are ultimately the sole responsibility of the institution's legally designated fund custodians. However, consumer concerns do affect decision making, and involving consumers in decision making related to charges and refunds is a desirable approach for assessing student needs and creating public awareness of institutional requirements.

Guideline Three. Institutions should publish a current schedule of all student charges, a statement of the purpose for such charges, and related refund policies, and have them readily available free of charge to current and prospective students. Students and parents have a right to know what charges they will be expected to pay and what will or will not be refunded. They also have a right to know what services accompany payment of the charges. Informational materials published free for students and prospective students are ideal for this purpose.

Guideline Four. Institutions should clearly designate all optional charges as "optional" in all published schedules and related materials. Clearly, charges that are mandatory and charges that are optional must be plainly differentiated in all printed materials. Also, the institution should state clearly in its schedule if a charge is optional for some students but required for others. Statements accompanying the schedule may include institutional endorsements of the optional program or service.

Guideline Five. Institutions should clearly identify charges and deposits that are nonrefundable as "nonrefundable" on all published schedules. Institutions determine on an individual basis which of their charges are refundable or nonrefundable. In general, admissions fees, application fees, laboratory fees, facility and student activity fees, and other similar charges are not refundable. Such fees are generally charged to cover the costs of activities such as processing applications and other student information, reserving academic positions, and establishing the limits of institutional programs and services, reserving housing space, and otherwise setting the fixed costs of the institution for the coming academic period.

Institutions determine on an individual basis which of their deposits are refundable or nonrefundable. Some deposits will be nonrefundable or will be credited to a student's account (e.g., tuition deposits). Others are refundable according to the terms of the deposit agreement (e.g., deposits for breakage).

Guideline Six. Institutions should refund housing rental charges, less a deposit, so long as written notification of cancellation is made prior to a well-publicized date that provides reasonable opportunity to make the space available to other students. Written notification on or before the beginning of the term of the contract is necessary to ensure utilization of housing units. During the term of the contract, room charges are generally not refundable. However, based on the program offered, space availability, debt service requirements, state and local laws, and other individual circumstances, institutions may provide for some more flexible refund guideline for housing.

Guideline Seven.Institutions should refund board charges in full, less a deposit, if written notification of cancellation is made prior to a well-publicized date that falls on or before the beginning of the term of the contract. Subsequent board charges should be refunded on a pro rata basis less a withdrawal fee. it is reasonable to make a refund for those goods and services not consumed. The withdrawal charge should reflect that portion of an institution's costs that are fixed for the term of the contract.

Guideline Eight. The institutional tuition refund policy for an academic period should include the following minimum guidelines:

1. The institution should refund 100 percent of the tuition charge, less a deposit fee, if written notification of cancellation is made prior to a well-publicized date that falls on or before the first day of classes.

2. The institution should refund at least 25 percent of the tuition charge if written notification of withdrawal is made during the first 25 percent of the academic period.

It is reasonable to refund tuition charges on a sliding scale if a student withdraws from his or her program prior to the end of the first 25 percent of the academic period unless state law imposes a more restrictive refund policy.

Guideline Nine. The institution should assess no penalty charges where the institution, as opposed to the student, is in error. The institution should make refunds in cases where the institution has assessed charges in error. Penalty charges, such as those involving late registration fees, change of scheduled fees, late payment fees, should not be assessed if it is determined that the student is not responsible for the action causing the charge to be levied.

Guideline Ten. Institutions should advise students that any notifications of withdrawal or cancellation and requests for refund must be in writing and addressed to the designated institutional officer. A student's written notification of withdrawal or cancellation and request for a refund provides an accurate record of transactions and also ensures that such requests will be processed on a timely basis. Acceptance of oral requests is an undesirable practice.

Guideline Eleven. Institutions should pay or credit refunds due on a timely basis. The definition of "timely basis" should include the time required to process a formal student request for refund, to process a check if required, and to allow for mail delivery, when necessary. if an institution has a policy that a refund of an inconsequential amount will not be made, such policy should be published as a part of all materials related to refund policies.

Guideline Twelve. Institutions should publicize, as a part of their dissemination of information on charges and refunds, that an appeals process exists for students or parents who feel that individual circumstances warrant exceptions from published policy. The informational materials should include the name, tide, and address of the official responsible. Although charges and refund policies should reflect extensive consideration of student and institutional needs, it will not be possible to encompass in these structures the variety of personal circumstances that may exist or develop. Institutions are required to provide a system of due process to their students, and charges and refund policies are legitimately a part of that process. Students and parents should be informed regularly of procedures for requesting information concerning exceptions to published policies.

This statement is one in a series of policy guidelines developed to help higher education respond to issues by means of voluntary self-regulation. The Office on Self-Regulation Initiatives, a program of the American Council on Education, works cooperatively with representative associations and institutional leaders in identifying issues on which selfregulation is needed, formulating responses to those issues, and distributing the resulting guidelines and recommendations.

College and university administrators are urged to review the guidelines as a basis for considering changes in existing institutional policies. Each statement is developed through a process of wide review among representatives of different types of institutions and professional responsibilities in higher education. They are intended to summarize general principles of good practice that can be adapted to the specific circumstances of each college and university.

The statements are not copyrighted and may be reproduced in the interest of education. Permission for resale, reprinting or commercial use should be requested in advance from ACE's Publications Department.

Additional copies of this statement can be obtained upon request to the Office on Self-Regulation Initiatives. Please include a stamped, self-addressed envelope.

American Council on Education
One Dupont Circle, Washington, D.C. 20036