A Concordia University student is suing the private college, saying he was misled about the university's financial status. William Spaulding's lawsuit was filed Monday, Feb. 10, in Multnomah County Circuit Court. He has asked the court to make the lawsuit a class action so it could apply to dozens of others like him who want refunds on their tuition.
On Monday, Feb. 10, the private, nonprofit Christian university in Portland abruptly announced plans to close by the end of the academic year. In a statement and video, university Interim President the Rev. Thomas Ries said the college's board of regents voted the prior Friday, Feb. 7, to cease operations at the end of the spring 2020 semester.
A statement released by the university cited "years of mounting financial challenges, and a challenging and changing educational landscape."
In a filed by attorney Michael Fuller, students say those years of financial challenges were not disclosed by the university to students, who applied and paid tuition fees to the college expecting to complete their degrees there.
"Concordia University misled hundreds of students about its financial condition, and collected tuition in 2020 that students would not have paid had the students known the truth about Concordia University's looming closure," the complaint states.
The university indicated it has more than 6,000 students.
Fuller said the university likely knew it was in financial trouble, but continued to recruit students both at its Portland campus and through its online degree programs, who likely had no chance of ever earning a degree there.
"A university can choose not to disclose its financial information to its students, but if it turns out the students were misled, then they have a case," Fuller said, likening the situation to "selling someone a lifetime supply to a gym when you know it's going to close tomorrow."
The attorney said he was contacted by Concordia students the day of the announcement, and now has more than 50 students joining the lawsuit.
Many of those students have been in this situation before.
In 2018, another private Oregon school, Marylhurst University, shuttered. Fuller helped Marylhurst students file a class action lawsuit against the school, which eventually was settled for undisclosed amounts.
Many of Marylhurst's former students turned to Concordia when they needed to transfer to a new school, Fuller noted.
"Within an hour or two (of the announcement) I had been contacted by three or four of my former clients," Fuller said of former Marylhurst students who are now finding themselves caught in the middle of another private college shut down fiasco.
"A lot of them have maxed out their financial aid and taken out private loans to pay for school," he said.
The lawsuit alleges Concordia misrepresented its services by omission, leaving students to pay for college credits that may not transfer to other universities, and without the ability to graduate. Concordia even touted a long-range plan that said, "by 2024, 'all students of Concordia University-Portland will be actively engaged in a university that enjoys a strong national reputation in select programs preparing leaders for the transformation of society through educational experiences grounded in relationships and centered in servant leadership, rigor, and Lutheran identity and values.'"
Fuller said universities typically have insurance policies that cover legal issues like this, but noted, "if (Concordia) promises to give tuition refunds to every single one of the students, I'll dismiss the case and cover my own costs."
The university has yet to respond to the legal complaint and has not responded to requests for comment on other financial matters surrounding its nonprofit foundation.