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Update:
- Four more universities agreed to $166 million in price-fixing settlements in an antitrust class action lawsuit claiming the schools worked together to limit student financial aid.
- Dartmouth College, Northwestern University, William Marsh Rice University and Vanderbilt University are the third tranche of price-fixing settlements in the student financial aid case that, in total, amounts to $284 million in settlements with 10 universities.
- Vanderbilt will pay $55 million, Northwestern will pay $43.5 million and Rice and Dartmouth will pay $33.75 million apiece in what are the four largest settlement amounts in the class action lawsuit so far.
- Brown, Columbia, Duke, Emory and Yale previously agreed to price-fixing settlements worth $104.5 million.
University price-fixing class action lawsuit overview:
- Who: A group of former students filed a class action lawsuit against a group of 19 of the nation’s most prestigious private universities, including Yale, Georgetown, Columbia and MIT.
- Why: Students claim the universities work together to fix and artificially inflate their net price of admission, harming financial aid recipients who attend.
- Where: The class action lawsuit was filed in Illinois federal court.
(Jan. 12, 2022)
Sixteen of the nation’s most prestigious private universities work together to fix — and subsequently inflate — their net price of admissions, harming financial aid recipients, a new class action lawsuit alleges.
Five former students, led by Sia Henry, claim the universities have created a formula to determine an applicants’ ability to pay while favoring wealthier students for admission.
Former students argue the alleged scheme allows the universities, including Brown, CalTech, Chicago, Columbia, Cornell, Duke, Dartmouth, Emory, Georgetown, MIT, Northwestern, Notre Dame, Penn, Rice, Vanderbilt and Yale, to artificially inflate the net price of admission for students who are also financial aid recipients.
By working together to fix their prices, the universities have, over nearly the past two decades, overcharged around 170,000 financial aid recipients by hundreds of millions of dollars, the class action lawsuit alleges.
Former students want to represent a nationwide class of individuals who received need-based financial aid while attending one of the aforementioned universities undergraduate programs during a time period primarily between 2003 and the present.
Universities created ‘568 Presidents Group’ to receive antitrust exemption, plaintiffs claim
The former students claim the universities created a formula, called the “Consensus Approach,” as a way to “reduce or eliminate price competition” among members of what is known as the “568 Presidents Group.”
The “568” moniker is in homage to Section 568 of the Improving America’s Schools Act of 1994, which grants antitrust law exemption for “two or more institutions of higher education at which ‘all students admitted are admitted on a need-blind basis,’” according to the class action lawsuit.
Former students, however, argue none of the universities can claim a 568 exemption since at least nine — Columbia, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn and Vanderbilt — are known to favor wealthier applicants during the admissions process.
It can be shown that those nine universities favor wealthier applicants due to them having admissions systems that “favor the children of wealthy past or potential future donors,” the class action lawsuit alleges.
Further, the former students claim the universities that are known to favor wealthier applicants have also given waitlist preference to students who it knows will not need financial aid.
While the other seven universities may have been able to claim a 568 exemption, the fact that they have conspired with those who do not abide by need-blind admission policies makes them not eligible as well, the class action lawsuit alleges.
Former students claim the universities have violated Section 1 of the Sherman Act. They are demanding a jury trial and requesting actual damages and/or restitution for themselves and all class members.
In 2020, the U.S. Department of Justice targeted Yale in a lawsuit that accused the university of racial discrimination in its application process.
Have you had to pay more for admission to attend undergraduate programs at a university that is part of the 568 Presidents Group? Let us know in the comments.
The plaintiffs are represented by Gilbert Litigators & Counselors PC, Berger Montague PC, Roche Freedman LLP and Fegan Scott LLC.
The 568 Presidents Group student aid price-fixing class action lawsuit is Henry, et al. v. Brown University, et al., Case No. 1:22-cv-00125, in the U.S. District Court for the Northern District of Illinois.
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