Sixteen major universities, including Yale, Brown, Notre Dame, and Dartmouth, are being sued for antitrust violations accusing the schools of working together to limit financial aid. The Wall Street Journal reported on Monday alleged that this group of schools engaged in price-fixing and unfairly limited aid by relying on a shared method to calculate applicants’ financial needs.
The lawsuit was filed in the Northern District of Illinois by five former students who attended one of the 16 schools. Lawyers also stated that 170,000 former undergraduate students who received partial financial aid at those schools going back up to 18 years could be eligible to join the suit as plaintiffs.
From the Wall Street Journal:
According to a lawsuit filed in Illinois federal court late Sunday by law firms representing five former students who attended some of the schools, the universities engaged in price fixing and unfairly limited aid by using a shared methodology to calculate applicants’ financial need.
Schools are allowed under federal law to collaborate on their formulas, but only if they don’t consider applicants’ financial need in admissions decisions. The suit alleges these schools do weigh candidates’ ability to pay in certain circumstances, and therefore shouldn’t be eligible for the antitrust exemption.
The formal complaint goes on to allege these schools overcharged 170,000 financial aid recipients by “at least hundreds of millions of dollars” over 20 years. Also, according to the lawsuit, every school named in this lawsuit is members of the “568 Presidents Group,” which formed a set of common standards for determining the family’s ability to pay for college.
The lawsuit, which includes Eric Rosen, a partner at law firm Roche Freedman had this to say:
“While conspiring together on a method for awarding financial aid, which raises net tuition prices, defendants also consider the wealth of applicants and their families in making admissions decisions,” said Rosen to WSJ.
When the Wall Street Journal reached out for comment, a Yale spokeswoman said the school’s financial aid policy is “100% compliant with all applicable laws,” while a Cal Tech spokeswoman said the school has confidence in its aid practices, and a Brown spokesman said the complaint was without merit.