First Circuit Puts Universities at Risk for Claw Back of Tuition Payments
Amy Zuccarello and Aaron Staudinger co-authored the article, "First Circuit Puts Universities at Risk for Claw Back of Tuition Payments," which was published in Law.com on January 6, 2020.
The article discusses the impacts of the long-awaited decision of the First Circuit Court of Appeals to reverse a ruling by the United States Bankruptcy Court for the District of Massachusetts, DeGiacomo v. Sacred Heart Univ., and hold that parents did not receive “reasonably equivalent value” in exchange for the college tuition payments they made to educate their child.
This decision has negative effects on colleges and universities, which risk loss because they have no control over whether a parent, student or another relative pays tuition. Amy and Aaron suggest that schools consider measures to counter the risk of avoidance of tuition payments made by insolvent parents, such as requiring that students make all tuition payments directly.