Carnegie Mellon University has agreed to pay $4.8 million to settle claims that it should have refunded tuition and fees to students whose courses were abruptly moved online at the onset of the COVID-19 pandemic. The proposed class action settlement, filed in a Pittsburgh federal court on Friday, marks a significant chapter in the ongoing legal battles over pandemic-era tuition disputes.

A Long Road to Compensation

The settlement will benefit up to 13,337 students enrolled at Carnegie Mellon during the spring 2020 semester, after deducting up to $1.6 million in legal fees and costs for class counsel Lynch Carpenter LLP and Bursor & Fisher PA. The final payout per student will depend on how many opt out and how much financial aid or refunds they previously received. However, every eligible student is guaranteed at least $50.

Students alleged that the university had promised and charged for in-person education and on-campus services but failed to deliver when it shifted to remote learning in response to the pandemic. “Plaintiffs allege that CMU contracted with, charged, and collected funds for an on-campus experience but failed to uphold its end of the bargain,” the legal brief stated.

Carnegie Mellon Stands Firm but Settles

Despite the settlement, Carnegie Mellon denied any wrongdoing. A university spokesperson reaffirmed the institution’s stance, stating, “CMU acted in the best public health interests of our students, faculty, and staff by moving to remote instruction, as did most universities nationwide. While we dispute the allegations, we are settling to avoid prolonged litigation and associated costs.”

The lawsuit's plaintiffs, Abigale Pfingsten and Anokhy Desai, initially filed separate claims in mid-2020 after the university declined to adjust tuition despite moving all classes online. The cases were consolidated in August 2020, but proceedings were paused while the Third Circuit reviewed similar lawsuits against Temple University and the University of Pittsburgh. Once those cases moved forward, CMU and the plaintiffs resumed discovery and entered mediation with retired U.S. Magistrate Judge Diane M. Welsh. Though initial talks failed to reach an agreement, both sides continued negotiations until they struck a deal.

Legal Battles and Financial Considerations

The settlement places Carnegie Mellon among the more substantial COVID-era tuition refunds, surpassing Brown University's $1.5 million deal for 9,500 students and Monmouth University’s $1.3 million settlement for 4,200 students.

Plaintiffs acknowledged the risks of pursuing litigation, as pandemic-related tuition lawsuits remain a relatively untested area of law. “While plaintiffs believe they would have prevailed, proving an implied contract or unjust enrichment posed significant legal hurdles,” the filing stated. “Additionally, litigation would have entailed substantial costs, including expert witnesses and trial expenses.”

How the Settlement Will Be Distributed

Under the agreement, class counsel will seek up to one-third of the settlement fund as fees, with the remainder distributed among students. If less than $250,000 remains after initial disbursement, the funds will be used for a scholarship. If more than $250,000 remains, a second round of payments will be issued.

Legal representatives for the students include Nicholas Colella, Gary F. Lynch, and Kelly K. Iverson of Lynch Carpenter LLP; Sarah Westcot and Philip Lawrence Fraietta of Bursor & Fisher PA; Jason C. Tetlow of Tetlow Law PC; and Edward W. Ciolko of Sterlington PLLC.

Carnegie Mellon is represented by Jeffrey M. Weimer, Catherine S. "Casey" Ryan, and Daniel I. Booker of Reed Smith LLP.

With the court’s preliminary approval, the settlement moves closer to resolving a dispute that underscores the financial and legal ripple effects of the pandemic on higher education.