A lawsuit filed in federal court docket on Sunday accused 16 of the nation’s main non-public universities and schools of conspiring to cut back the monetary help they award to admitted college students via a price-fixing cartel.
The lawsuit, filed in federal court docket in Chicago on behalf of 5 former undergraduates who attended a number of the universities named within the swimsuit, takes purpose at a decades-old antitrust exemption granted to those universities for monetary help selections and claims that the universities have overcharged an estimated 170,000 college students who had been eligible for monetary help over practically 20 years.
The schools accused of wrongdoing are Brown, the California Institute of Expertise, the College of Chicago, Columbia, Cornell, Dartmouth, Duke, Emory, Georgetown, the Massachusetts Institute of Expertise, Northwestern, Notre Dame, the College of Pennsylvania, Rice, Vanderbilt and Yale.
The allegations hinge on a strategy for calculating monetary want. The 16 colleges collaborate in a corporation known as the 568 Presidents Group that makes use of a consensus strategy to evaluating a scholar’s means to pay, in accordance with the lawsuit.
Below federal antitrust legislation, these universities are permitted to collaborate on monetary help formulation if they don’t think about a scholar’s means to pay within the admissions course of, a standing known as “want blind.” The group’s identify is derived from a bit of federal legislation allowing such collaborations: Part 568 of the Greater Schooling Act.
The swimsuit claims that 9 of the faculties aren’t really want blind as a result of for a few years, they’ve discovered methods to contemplate some candidates’ means to pay.
The College of Pennsylvania and Vanderbilt, for instance, have thought-about the monetary wants of wait-listed candidates, the lawsuit says. Different colleges, the lawsuit says, award “particular remedy to the kids of rich” donors, which, given the restricted variety of spots, hurts college students needing monetary help.
The lawsuit claims that the actions of those 9 colleges — Columbia, Dartmouth, Duke, Georgetown, M.I.T., Northwestern, Notre Dame, the College of Pennsylvania and Vanderbilt — render the actions of all 16 universities illegal, turning it into what the swimsuit calls “the 568 Cartel.”
“Privileging the rich and disadvantaging the financially needy are inextricably linked,” the swimsuit stated. “They’re two sides of the identical coin.”
Peter McDonough, vp and common counsel of the American Council on Schooling, an business group whose 2,000 school and college president members embrace leaders of the 16 colleges, stated the case was much like antitrust litigation the Justice Division filed towards Ivy League colleges and M.I.T. within the Nineties.
In the end, he stated, M.I.T. obtained a positive federal appeals court docket ruling and the Justice Division settled its claims.
“I’d be shocked to finally discover that there’s fireplace the place this smoke is being despatched up right this moment,” Mr. McDonough stated, noting that the faculties named within the grievance had been “very antitrust conscious and significantly subtle. They’ve good recommendation supplied to them.”
A number of establishments, together with Columbia, Duke and Rice, declined to touch upon the pending litigation. Karen Peart, a spokeswoman for Yale, stated the college’s “monetary help coverage is 100% compliant with all relevant legal guidelines.”
Neither college is known as within the monetary help lawsuit.
However the lawsuit acknowledged that Harvard, amongst different universities, declined to affix the 568 group as a result of it “would have yielded financial-aid packages that had been smaller than what Harvard needed to award.”