School prices class action lawsuit overview:
- Who: Plaintiffs Maxwell Hansen and Eileen Chang filed a class action lawsuit against the College Board and dozens of colleges and universities.
- Why: The defendants allegedly conspired to implement a scheme that would cause prospective students applying for non-federal financial aid to pay significantly more.
- Where: The class action lawsuit was filed in Illinois federal court.
Dozens of private universities and colleges face a class action lawsuit filed by two former college students alleging an anticompetitive scheme to raise school prices.
Plaintiffs Maxwell Hansen and Eileen Chang allege the schools, including Harvard, Emory and Yale, allegedly conspired to increase attendance prices through a scheme orchestrated by the College Board, a nonprofit that sets financial aid standards.
“Paying for college is one of the landmark financial burdens millions of students and parents face,” the class action states. “Families often spend years planning and saving to pay for college and may incur long lasting debt, sometimes debt they cannot afford.”
School prices scheme financially harms students, plaintiffs say
The Free Application for Federal Student Aid considers only the custodial parents’ financial information, the class action claims. Students seeking additional financial aid must submit a CSS Profile, which requires noncustodial parents’ financial information without any exceptions.
Factoring noncustodial parents’ financial information into financial aid causes students financial harm in situations where they make more money than students’ custodial parents or where they do not contribute to college tuition, the lawsuit alleges.
About 250 private schools require students to submit a CSS Profile in addition to FAFSA, according to the complaint.
The plaintiffs claim the average tuition cost for the schools engaged in the scheme is $6,200 more than the 10 schools in the top 50 private universities that do not engage in it.
Prior to 2006, schools focused on the custodial parents’ assets. However, the plaintiffs claim the defendants conspired to increase prices by implementing the new pricing strategy considering noncustodial parents’ assets. University employees allegedly helped create the new strategy.
For students raised by single parents, the change “essentially at least doubled their available assets/income practically overnight,” the class action alleges.
The class action lawsuit asserts one count for violating Section 1 of the Sherman Act.
Some universities have already reached settlements over allegations they engaged in a financial aid price-fixing scheme.
What do you think about the allegations that the College Board conspired with top colleges and universities to inflate tuition prices? Join the discussion in the comments.
Hansen and Chang are represented by Steve W. Berman, Daniel J. Kurowski and Rio S. Pierce of Hagens Berman Sobol Shapiro LLP.
The school prices class action lawsuit is Maxwell Hansen, et al. v. Northwestern University, et al., Case No. 1:24-cv-09667, in the U.S. District Court for the Northern District of Illinois.
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