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N.C. Protects Colleges From Pandemic-Related Lawsuits

July 9, 2020
 
 

North Carolina governor Roy Cooper recently signed into law a bill that will protect colleges from lawsuits related to campus closures as a result of the coronavirus pandemic, including a swath of lawsuits demanding tuition reimbursements after colleges shifted to online instruction in the spring.

A new Moody’s report examines the law and its effect on North Carolina colleges. The report called the law “credit-positive legislation” and discussed the importance of tuition revenue to most colleges’ operating budgets.

“In fiscal 2019, the median reliance on tuition and auxiliary revenue as a percentage of overall operating revenue was 72.8% for Moody's-rated private universities and 48.2% for public universities,” the report states.

The University of North Carolina at Asheville, UNC Charlotte, UNC Wilmington, East Carolina University and Duke University have been named in lawsuits and will benefit from the law’s protections. The lawsuits against the University of North Carolina system institutions have been dismissed.

Colleges in Louisiana, Maine, New Jersey and Connecticut are calling for similar protections, the report notes.

“While the adoption of broader coronavirus liability protections would be positive for higher education institutions, it is possible that the measures will be challenged in court,” the report states.

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