U.C. ordered to pay $40M refund to students

About 40,000 current and former University of California students are due to get $40 million in refunds as a result of an action by the state Supreme Court on Wednesday.

The high court in San Francisco refused to hear the university's appeal of a Court of Appeal decision that concluded the university broke promises not to raise student fees in 2003.

The action means the appeals court ruling, issued in San Francisco in November, is the final decision in the case.

The financial compensation includes both $28 million in refunds and about $12 million in interest.

The largest portion, about $33 million in refunds and interest, is due to about 9,000 students in professional schools such as law, medicine and business whose fees were raised in 2003.

The appeals court said the university violated an implied contract it created when it said on its Web site and some catalogs until 2003 that professional degree fees would remain constant during a student's enrollment.

The professional degree fees are in addition to the educational fees paid by all UC students. The university, citing fiscal problems, began raising the professional fees substantially in 2003.

Another $7 million in refunds and interest is due to 31,000 undergraduate and graduate students whose educational fees were raised in 2003 after they had paid their bills for the spring or summer term.

The court said the paid bills created a contract for that term and the educational fees could not be increased until the following term.

UC spokesman Ricardo Vazquez said, “We're disappointed. It certainly has a financial impact.”

Vazquez said, “The university is looking at its options and consulting with the university community.”

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