Up To $2M University of Southern California Settlement Ends Class Action Over Allegedly Unlawful Late Fees

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The University of Southern California (USC) has agreed to pay up to $2,000,000 to settle a class action lawsuit that alleged the university unlawfully charged and collected late fees from students in violation of California law.

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The USC class action settlement received preliminary approval from the court on December 15, 2025 and covers all current and former USC students who paid or were charged one or more late fees anytime between July 14, 2026 and March 4, 2026, and who have not received a full refund or waiver of those fees.

The court-approved website for the USC late fees settlement can be found at USCFeeSettlement.com.

According to the website, USC settlement class members who file a valid, timely claim form are eligible to receive a one-time cash payment from an aggregate $2 million settlement fund set out exclusively for class member payments. The amount of each cash payment, the agreement states, will equal 30 percent of the late fees levied against a class member during the class period, excluding any fees that were refunded or waived, for a maximum total payment of $225 per claimant.

Class members may receive their settlement payout via check, account credit or electronic payment, the agreement notes, and all checks must be cashed within 90 days of issuance before expiration.

Should the total amount to be paid to class members exceed the $2 million aggregate cap for cash payments, the agreement says that payments may be subject to a pro rata (equal share) reduction.

To file a University of Southern California settlement claim form online, class members can head to this page and log in using the unique ID and PIN found on their received copy of the settlement notice. Alternatively, class members may download a PDF of the claim form from the website to print, fill out and return by mail to the address of the settlement administrator listed on the first page of the document.

All USC settlement claim forms must be submitted online or by mail by June 5, 2026.

In addition to monetary benefits, the settlement also provides significant prospective relief to students.

Firstly, the settlement agreement states that USC shall waive or decline to assess at least 30 percent of the amount of late fees that would normally apply for a period of two years after the effective date of the agreement. The university will have complete discretion in deciding when, why and for whom student fees will be waived, and the agreement estimates the late fee forgiveness will save students approximately $8 million.  

Moreover, the agreement says that within 180 days following the effective date of the settlement, USC will select a ten-week period during which it will not charge any new financial fees, which will save students an estimated total of $2 million.

The court will determine whether to grant final approval to the USC late fee settlement following a hearing on July 1, 2026. Compensation will begin to be distributed to class members only after final approval is granted and any appeals are resolved.

The University of Southern California class action lawsuit alleged that the university issued excessive late fees pursuant to the USC student catalog for unpaid balances, failure to complete the class registration process on time and failing to make payments on time in violation of the California Unfair Competition Law and California Civil Code.

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