Close this search box.
Close this search box.

16 of The Nations Most Prestigious Universities are Accused of Price Fixing in New Lawsuit

By Rheingold Giuffra Ruffo Plotkin & Hellman LLP

16 of America’s most elite universities are being sued for allegedly violating antitrust laws by colluding to limit their student’s financial aid.

The lawsuit is being filed by various law firms within the Illinois federal court on behalf of five students who previously attended some of the universities.

The schools are all a part of the 568 Presidents Group, which is an affiliation of colleges and universities which all pledge to admit students on a need-blind basis. The list of schools involved in the litigation are as follows:

  • Brown University
  • California Institute of Technology
  • University of Chicago
  • Columbia University
  • Cornell University
  • Dartmouth College
  • Duke University
  • Emory University
  • Georgetown University
  • Massachusetts Institute of Technology
  • Northwestern University
  • University of Notre Dame
  • University of Pennsylvania
  • Rice University
  • Vanderbilt University
  • Yale University

According to the lawsuit, nine of the universities – Columbia, Duke, Georgetown, Dartmouth, MIT, Notre Dame, UPENN, Vanderbilt, and Northwestern – have favored wealthier candidates when making admissions decisions. In addition, some of these schools also considered applicants’ requests for financial aid when considering which students are given a spot off the waitlist.

The lawsuit alleges that the other seven schools – Brown, Cornell, Rice, Emory, CalTech, UChicago, and Yale – “may or may not have adhered to the need-blind admissions policies, but they nonetheless conspired with the other defendants”.

The plaintiffs state that these universities devised a price-fixing scheme consisting of a particular methodology used to determine how much financial aid would be awarded to each applicant. The lawsuit specifically states that the defendants “have participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition, and that in fact has artificially inflated the net price of attendance for students receiving financial aid.”

If these claims fall true, this would be a grave violation of Section 568 of the Improving America’s Schools Act of 1994 which dictates that universities can collaborate while developing their financial aid formulas, however, they are not permitted to consider financial need when determining which applicants will gain admission.

The five plaintiffs stated that these violations are “particularly egregious because it has narrowed a critical pathway to upward mobility that admission to their institutions represents”.

In addition to demanding that these institutions end their “conspiratorial conduct”, the plaintiffs are seeking compensation for all U.S. citizens and permanent residents who have:

  • Enrolled in one of the listed full-time undergraduate programs
  • Received need-based financial aid
  • Paid tuition or room and board not fully covered by their financial aid award

According to the plaintiffs’ lawyers, over 170,000 former students could be eligible to join the suit as plaintiffs.

This case is potentially far more damaging to the reputation of Universities across America than the infamous 2019 Varsity Blues Scandal. In the former case, the blame was rightfully placed on individual people who behaved criminally and tried to finagle their way into prestigious universities. In this case, however, the blame entirely falls on the institutions themselves for devising a plan to cheat students out of aid money they rightfully deserved.

Related Posts