In court, Yale and other elite colleges are accused of limiting financial aid

A lawsuit in federal court on Monday accused 16 of the nation’s leading private universities and colleges of conspiring to reduce the fi...


A lawsuit in federal court on Monday accused 16 of the nation’s leading private universities and colleges of conspiring to reduce the financial aid they give to students admitted through a price-fixing cartel.

The trial, filed in Chicago federal court on behalf of five former undergraduates who attended some of the universities named in the lawsuit, seeks a decades-old antitrust exemption granted to those universities for financial aid decisions and claims that colleges overcharged about 170,000 students eligible for financial aid for nearly two decades.

Universities accused of wrongdoing are Brown, the California Institute of Technology, University of Chicago, Columbia, Cornell, Dartmouth, Duke, Emory, Georgetown, Massachusetts Institute of Technology, Northwestern, Notre Dame, University of Pennsylvania, Rice, Vanderbilt and Yale.

The claims are based on a methodology for calculating financial needs. The 16 schools work together in an organization called the 568 Presidents Group that uses a consensus-based approach to assess a student’s ability to pay, according to the lawsuit.

Under federal antitrust law, these universities are allowed to collaborate on financial aid formulas if they ignore a student’s ability to pay in the admissions process, a status called “blind need”. . The name of the group is derived from an article of federal law authorizing such collaborations: article 568 of the Law on Higher Education.

The lawsuit claims that nine of the schools are not actually blind because for many years they found ways to take into account the ability to pay of certain applicants.

The University of Pennsylvania and Vanderbilt, for example, considered the financial needs of waitlisted applicants, according to the lawsuit. Other schools, according to the lawsuit, give “special treatment to the children of wealthy donors,” which, given the limited number of places, hurts students in need of financial aid.

The lawsuit claims the actions of these nine schools – Columbia, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, University of Pennsylvania and Vanderbilt – make the actions of the 16 universities illegal, turning them into what the prosecution calls “The Cartel 568.

“Putting the rich first and disadvantaging the needy are inextricably linked,” the lawsuit said. “These are two sides of the same coin.”

Peter McDonough, vice president and general counsel of the American Council on Education, an industry organization whose 2,000-member college and university presidents include leaders from all 16 schools, said the case was similar to a filed antitrust dispute. by the Department of Justice against the Ivy League schools and MIT. in the 1990s.

Ultimately, he said, MIT won a favorable decision from the federal appeals court and the Justice Department settled its claims.

“I would be surprised to eventually find out that there is a fire where this smoke is being sent today,” McDonough said, noting that the schools named in the complaint were “very aware of antitrust laws and particularly sophisticated” . They are well advised. “

Several institutions, including Columbia, Duke and Rice, declined to comment on the ongoing litigation. Yale spokeswoman Karen Peart said the university’s financial aid policy is 100% compliant with all applicable laws.

No universities are named in the financial aid lawsuit.

But the lawsuit said Harvard, among other universities, had refused to join the 568 group because it “would have produced smaller financial aid than Harvard wanted to grant.”

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Newsrust - US Top News: In court, Yale and other elite colleges are accused of limiting financial aid
In court, Yale and other elite colleges are accused of limiting financial aid
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