16 top colleges sued for price fixing

Sixteen major universities are being sued by former students who allege the schools “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,” CNN reported on Tuesday, January 11, 2022 (read story here).

The lawsuit was filed in an Illinois federal court against Columbia, Dartmouth, Duke, Georgetown, M.I.T., Northwestern, Notre Dame, U. of Pennsylvania, and Vanderbill, and also claims that Brown, Caltech, U. of Chicago, Cornell, Emory, Rice, and Yale) “conspired with the other Defendants.”

If class-action status is granted, the class would include “any US citizen or permanent resident who paid tuition, room, or board at these institutions within varying timeframes from 2003 to the present.”

The plaintiffs allege the main defendants mentioned above have “made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid” in order to “reduce the amount of financial aid they provide to admitted students.” From this it sounds like they’re accused of consciously disfavoring needier students in their admissions processes to reduce their financial aid outlays.

Federal law “allows institutions to collaborate on financial aid formulas if they don’t consider the student’s financial need in admission decisions,” CNN says. In other words, they can use a common methodology for calculating financial aid awards after students are admitted.

The complaint appears to alleged they violated this provision by considering the amount of financial aid applicants would need as part of their admission process. The conspiracy allegations stem from the fact the schools used the shared methodology for making admissions decisions. While the CNN article doesn’t explicitly say so, that would seem to suggest that a student denied admission by any one of the schools because of greater financial need would be turned down by all the others for the same reason, thus bringing collusion into play in admissions determinations.

I trust my local institution of higher pedagogy, the University of Washington in Seattle, would never stoop to such mercenary nickel-and-diming of aspiring scholars, despite its comparatively puny endowment trust (about $4.7 billion as of June 2021, details here).

Return to The-Ave.US Home Page

Comments are closed.