May 17, 2022

A lesson in the new math.

Lindenwood University paid $1.65 million to settle a lawsuit brought about by students who felt they got a sub-par product when forced to go online during the pandemic.

The students' lawyers got $550,000.

Each student received "roughly $185" from the settlement equaling just about $1.1 million of the settlement.

That must mean that Lindenwood had/has an enrollment of 5,945 students (about a 1000 less than what Wikipedia, right or wrong, reported for 2021). In the lawsuit, Lindenwood is described as having "approximately 8,200 students, comprised of approximately 5,500 undergraduate students and approximately 2,700 graduate students. Of those students, approximately 4,200 undergraduate students and 2,000 graduate students attended full time and in-person at the university’s main campus, located in St. Charles, Missouri."  Not sure how a final count of 5,945 must have been determined from this mishmash of enrollment reporting.

Average Annual Cost to attend Lindenwood is about $31,500. 

Tuition for online courses at Lindenwood is cheaper than face to face courses. The lawsuit claims that online tuition is $300 per credit hour cheaper than it is for the face to face classes. No matter how you do the math, that is a lot of money per credit hour (from a Community College administrator's perspective, my statement here applies to either the face to face or the online tuition).

Somewhere Lindenwood will need to recoup that $1.65 million. They could lay off and cut expenses, but that would be a move of panic.  Almost certainly they will try to recoup it in revenue.

The Freshman Profile for Lindenwood, at least for Fall 2021, was 734 students.  Let's assume that 734 as a recurring flat goal (I know, ridiculous premise).

The university could put the burden entirely upon the Fall 2022 (or Fall 2023) entering Freshman class. Each could have $2,248 added to that $31,500 and make it up in one year.  As ridiculous as that sounds, it is very likely that there are families/potential students who wouldn't blink at that difference. After all, it is already in the 30K range.

Or, simply accepting that the $1.65 million can be spread out across one year of all students (incoming freshmen and returning students), and assuming their overall enrollment stays flat at 5,945, the university could add $277 to the annual cost for one year and recoup the $1.65 million.  Honestly, are most students going to notice that the annual costs are now $31,777? If the university determines tuition by contact/credit hour, that $277 could be spread out to about $9.25 a credit hour (assuming students take 30 credit hours a year).  

Really, who is going to notice?

Don't kid yourself. Somewhere, somehow, this loss of money will be compensated. You can't even really blame Lindenwood for whatever they choose to increase revenue. It's not like many of us had any choice but to pivot to online at the outbreak of COVID.

So, let's see, who won?

As we have seen, it won't be the future LU student. Among other things, don't be surprised if the differential tuition between online and face to face goes away.  Many institutions charge higher tuition for online, for either the convenience, or to acknowledge costs unique to its delivery.

Is it the kid who filed the suit initially? I doubt he figured he would start this conversation and end up with $185. Maybe he can apply it toward his Business Law textbook next semester . . . used . . . and rented.

Is it the kid who failed all of his classes that Spring, regardless of the change of modality mid-stream?  At $185, I am guessing yes.  He probably has no clue what "class action" means.

Is it the University?  Nope. In addition to the $1.65 million, there are the unknown costs paid to their lawyers to deal with the lawsuit.  Would they have done something differently in March 2020 if they had known this would be the result? Probably not. While they can't declare themselves "winners," they avoided much bigger losses, but are still smarting from the public relations' disaster.

Is it the lawyers? Of course, it is. However you do the math, the lawyers always come out sitting pretty.