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Case seeking refunds for out-of-state university students dismissed

Gavel and scales

Out-of-state students who paid full tuition at state universities won’t be getting a refund.

Maricopa County Superior Court Judge Teresa Sanders on Tuesday threw out the lawsuit filed earlier this year by three students from other states. They claimed that since the universities were at the time letting “dreamers” pay in-state tuition meant they, too – and every other out-of-state student – were entitled to the same discount.

Sanders said even if that is true – a conclusion she never reached – it does not matter. Sanders said individuals who believe they were harmed by the failure of the Board of Regents to follow a federal law the right to file individual lawsuits.

But attorney Lance Entrekin who represents the students said his lawsuit is not based on seeking financial recovery under the federal law. He said it is based on the theory that the regents, having violated that federal law, have breached their contract with the out-of-state students who now are entitled to a refund.

And Entrekin said that, if nothing else, the universities were unjustly enriched by charging his clients and others the full out-of-state tuition when the federal law said they were entitled to pay in-state tuition.

He has vowed an appeal.

For the time being, the ruling, unless overturned, removes a large financial cloud from the state’s three universities. Had the judge let the suit go forward and found the tuition policy illegal, the schools could have potentially been on the hook for hundreds of millions of dollars in refunds.

At the heart of the issue is the 1996 Welfare Reform Act.

One provision spells out that people who are not in this country legally are ineligible for “any postsecondary education benefit” simply because they also happen to reside in the state.

But Congress also put in an escape clause of sorts for states: They could choose to provide discounted college but only if they made the same discounts available to all U.S. citizens.

All this became an issue because the Arizona Board of Regents voted in 2015 to provide in-state tuition to those in the Deferred Action for Childhood Arrivals program. Established years earlier by an executive order by President Obama, it allows those who came to this country illegally as children to remain without fear of deportation and the ability to work legally.

But in 2017 the state Court of Appeals, ruling in a case involving Maricopa County Community Colleges, said the policy of providing in-state tuition to DACA recipients violated both state and federal law.

The Board of Regents, despite the ruling, maintained the tuition policy for another year, until the Arizona Supreme Court upheld the appellate court ruling.

Entrekin argued that the regents were put on notice in that 2017 appellate ruling which specifically cited the 1996 federal law. But he said the universities continued to charge his clients and other out-of-state students the full tuition for the 2017-2018 school year.

That difference is significant.

When Entrekin sued, the regents had set resident undergraduate tuition for new students at the University of Arizona at $12,228, versus $35,658 for students from other states.

The difference is not quite as great at Arizona State University, $10,792 for resident undergrads compared to $27,372 for nonresidents. And Northern Arizona University set tuition at $11,059 for residents and $24,841 for others.

Entrekin sought a refund for California resident Mikayla Foss and Michigan resident Abigail Garbarino who were attending ASU and Eleanor Wiersma from Maryland, who was going to UofA. And he asked Sanders to allow the case to proceed as a class action, meaning any ruling would affect all others who Entrekin contends were overcharged.

Sanders, however, said the law’s sole purpose is to put a restriction on the state and universities extending benefits to those not here legally.

“It does not provide an entitlement to U.S. citizens,” she wrote. “Nor does it prohibit educational institutions from classifying non-resident students as such, or from collecting non-resident tuition from them.”

Entrekin, however, said that universities, in entering into a contract with the students to charge them out-of-state tuition, violated federal law.

He did not dispute that the students did get what they bargained for: an education at a price they knew up front. But Entrekin said that does not matter.

“You cannot enforce a contractual provision that is illegal,” he said.

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