Elite Universities Settle in ‘Price-Fixing’ Financial Aid Lawsuit

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Law School Admissions on the Rise

A group of elite universities, including Brown University, Columbia University, Duke University, Emory University, and Yale University, agreed this week to collectively pay $104.5 million to settle a class action lawsuit that accused them of violating federal antitrust laws in their admissions processes, specially fixing the net costs of attendance. Despite the settlement, the institutions in question admitted no wrongdoing. 

Plaintiffs in the suit, filed in January 2022, allege that the 17 universities named in the suit artificially inflated the prices of attendance by reducing financial aid options. The institutions all, at one point, belonged to the 568 Presidents Group, which provided an exemption to antitrust laws and allowed them to share formulas for assessing prospective students’ financial needs, provided their admissions processes were “need-blind” and did not consider a student’s ability to pay. The group disbanded in 2022 after 24 years amid the litigation, meaning the schools no longer had an antitrust shield.

The suit argues that the group’s financial aid protocols were illegal because they did not adhere to the need-blind requirement, especially when considering wait-listed applicants. The plaintiffs’ attorneys claim that approximately 200,000 students over a 20-year span were overcharged.

“Given that a large percentage of families cannot afford an elite university education for their children without financial assistance, the 568 Cartel has enabled [the] defendants to maintain artificially inflated net prices of attendance, through artificially reduced financial aid, without losing admitted students to competitor schools,” the plaintiffs’ complaint reads. 

So far, eight universities named in the case have settled, including the University of Chicago for $13.5 million, Rice University for $33.75 million, and Vanderbilt University for an undisclosed amount. To date, the settlement funds total at least $151 million.

There are currently nine remaining universities named in the lawsuit:

  • The California Institute of Technology
  • Cornell University
  • Dartmouth College
  • Georgetown University
  • Johns Hopkins University
  • Massachusetts Institute of Technology
  • Northwestern University
  • University of Notre Dame du Lac
  • University of Pennsylvania