Student lawsuit says major universities unlawfully limited financial aid

Five students have filed a class-action lawsuit against 16 major universities for allegedly violating antitrust laws and unfairly limiting student financial aid. 

The lawsuit was filed in U.S. District Court in Chicago by on behalf of students who attended the universities named as defendants, reports The Yale Daily News. 

The lawsuit contends that the schools engaged in price fixing and unfairly limited financial aid by using a shared methodology to determine prospective students’ financial need.

The defendants: Columbia University, Dartmouth College, Duke University, Georgetown University, the Massachusetts Institute of Technology, Northwestern University, Notre Dame University, the University of Pennsylvania, Vanderbilt University, Brown University, the California Institute of Technology, the University of Chicago, Cornell University, Emory University, Rice University and Yale University.

The lawsuit contends that more than 170,000 former undergraduate students, going back 18 years, are qualified to join the suit as plaintiffs.

Under federal antitrust law — specifically Section 568 of the Improving America’s Schools Act of 1994 — universities can work together on their financial aid formulas only as long as none of them consider applicants’ financial need in their admissions decisions. 

The lawsuit also argues that some of the defendant schools do take candidates’ ability to pay into account in some circumstances, therefore rendering the entire group ineligible for the antitrust exemption. Namely, the suit alleges that nine out of the 16 schools consider financial need in their admissions process by favoring children of wealthy donors for admission. It also alleges that the subset of schools considers applicants’ finances when admitting them off the wait list. 

“Under a true need-blind admissions system, all students would be admitted without regard to the financial circumstances of the student or student’s family,” the lawsuit says. “Far from following this practice, at least nine defendants for many years have favored wealthy applicants in the admissions process. These nine defendants have thus made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid.”