PROFESSION

California medical students to get court-ordered tuition refunds

Finding an available fiscal source for the paybacks will likely be difficult for the state's university system now that it has lost its final appeal.

By Myrle Croasdale, AMNews staff. March 17, 2008.

Thousands of students enrolled in the University of California system in 2003, including about 2,500 in medical school, will be getting refunds totaling about $40 million.

The Supreme Court of California upheld a lower court decision requiring the UC system to refund tuition increases made during 2003.

Case at a glance
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Janet Lee, MD, one of eight students who led the class-action suit, was pleased with the January ruling. She doesn't know how much her portion will be but intends to use it to help pay off her medical school debt.

"It's very exciting news," said Dr. Lee, who graduated in 2005 and now is a third-year neurosurgical resident at University of Utah Medical Center in Salt Lake City. "It's been a very, very long process."

The case has its roots early in this decade, when state revenue shortfalls triggered steep budget cuts, including education. In 2003, the UC system, which includes five medical schools, raised tuition.

Students in professional degree programs saw increases of $400 to $1,700 per semester. One tuition hike was retroactive, with students receiving a second bill for the 2003 spring semester after many had paid their original bill in full.

The tuition hike affected about 9,000 professional-degree graduate students, including medical students, and more than 30,000 undergraduates.

The California Medical Assn. and the American Medical Association/State Medical Societies Litigation Center filed a joint friend-of-the-court brief on students' behalf. It pointed out that increases in tuition raised medical students' already steep debt and exacerbated physician shortages in medically underserved areas.

In November, the California Court of Appeals upheld a lower court decision that found that the university had breached its contract with continuing students when it raised their fees. The appellate court found that the increase ran counter to the university's promise, posted on its Web site and printed in its catalogs, that fees would not be raised for the duration of students' enrollment.

After the January decision, Danielle Leonard, co-counsel for the plaintiffs, said students felt vindicated for challenging the university. "The students are extremely pleased that the court recognized and agreed with what they felt was a violation of their rights," she said. The distribution process is moving forward, and Leonard is optimistic students will get their refunds by the end of the year.

Ricardo Vazquez, a spokesman for the UC system, said its regents had yet to determine where it would find the $33.8 million in back tuition increases plus an estimated $6 million in interest. In the past, officials speculated that they may have to raise tuition to finance the judgment.

"We're considering our options," he said. "This has a substantial financial impact on the university given the proposed budget cuts we're facing."

ADDITIONAL INFORMATION:

Case at a glance

Should the University of California system refund $40 million to students enrolled during a 2003 tuition hike?

A lower court found that the university must refund the money. The university asked the state Supreme Court to review the case. The court refused.

Impact: The university owes students $40 million in back tuition and interest. School officials have not determined where the money will come from but said in the past that the school system may have to raise tuition to cover the amount.

Mohammad Kashmiri et al. v. The Regents of the University of California, Supreme Court of California