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A federal judge late last week threw out a lawsuit in which a group of former students alleged that the recently shuttered Mount Ida College and its former officials had breached their contracts with and fiduciary duty to the students by failing to disclose information about its troubled financial situation. But the judge, Richard G. Stearns, dismissed the students' claims because, essentially, the college had little to no obligation to the students.
The former students sued after Mount Ida closed last year, prompting state scrutiny into the obligations of private nonprofit colleges in financial danger. The students alleged among other things that Mount Ida and the former officials had defrauded them and breached their contract with them by failing to disclose information about its precarious financial state.
But citing Massachusetts law, Stearns said that "merely paying tuition in exchange for an education does not create a contract," and "Massachusetts courts have consistently held that no fiduciary relationship exists between a student and his or her college."
