Notable Back-to-School Losses: What Educational Institutions Learned the Hard Way

As summer unofficially ended after the Labor Day weekend, millions of students have headed back to school. Going back to the school grind after summer break can be exciting and nerve-racking for students and teachers, as well as school administrators. (And let’s not forget the parents seeing their kids off to school for the first time – I’m not crying, you’re crying!)

While dealing with the pressures of boosting enrollment and keeping tuition fees down, educational institutions are faced with the challenge of managing growing risks including accidents on and off campus, discrimination cases, data breaches, telemarketing issues, and many other incidents that often lead to lawsuits and substantial payments.

Unfortunately, when it comes to losses, some schools and universities learn the hard way. In one case pulled from Advisen’s loss data, a for-profit education service provider agreed to pay $20 million to settle allegations that it caused the mass sending of spam messages to cell phones of nearly 100,000 people potential customers.

The plaintiffs asserted that the firm violated the federal Telephone Consumer Protection Act (TCPA) when it sent these messages without the users’ consent. The company denied that the text messages violated any law, but ultimately settled with the complainants. The payment was one of the largest TCPA settlements recorded in 2012.

In 2011, huge dollars were also paid to settle a wrongful death lawsuit filed over a school bus accident that led to a woman’s death and her daughter’s injuries. The Highway Patrol report indicated that the school bus driver did not notice that traffic in front of her had come to a stop and braked hard to avoid hitting the vehicle in front of her, causing the 15-ton bus to slide sideways and slam into the victim’s vehicle. The victim suffered catastrophic injuries in the collision and died 10 days later, while her daughter sustained broken bone injuries. In their complaint, the woman’s family claimed the driver and the school he is working for were negligent. The school ended up paying $8.4 million.

These losses illustrate that the risks faced by educational institutions can be daunting. Thus, it is crucial for schools and universities to ensure that an effective risk management program is in place. That way, the students, their teachers, and administrators can focus on what they came to school for – education.

Download Notable Back-to-School Losses

Download Notable Back-to-School Losses to learn more about these and other cases that led to financial losses!





Charlene Farside is EVP and Chief Marketing Officer at Advisen. When she isn’t busy building the global Advisen brand, she is rocking out to one of her favorite heavy metal bands, practicing her guitar skills (or lack thereof), getting tackled by one of her human or fur children, or reading something on her Kindle app. Charlene accepts all music and book recommendations, so if there is something you think she might not be able to live without, send her a note to share – or just say hi!

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