A federal lawsuit asserts 16 of the nation’s most elite universities collaborate to reduce financial aid for admitted students and inflate their cost of attendance, through a “price-fixing cartel.”
Filed in the Northeast District of Illinois Jan. 9, on behalf of five former undergraduates of Duke, Northwestern and Vanderbilt, the suit claims that nine out of the 16 institutions– Columbia, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, and Vanderbilt– have made admission decisions “with regard” to applicants’ financial circumstances, contradicting their policies of need-blind admissions— applicants’ financial need statuses do not play a role in their entry to the school.
According to the lawsuit, these nine universities maintain admissions systems which favor wealthy applicants and allow financial need to play a factor in determining waitlist admissions.
The other seven defendants of the accused universities include: Brown, CalTech, UChicago, Cornell, Emory, Rice and Yale.
The 16 aforementioned universities joined forces in an organization called the “568 Presidents Group,” through which the participants have agreed on “a set of common standards for determining the family’s ability to pay for college,” also known as the “Consensus Approach.” Through this they can pinpoint how much of the university’s tuition plus room and board fees the student can afford before introducing financial aid.
With that information, the institutions in the group have falsely elevated the net price of attendance for students requiring financial aid, to “reduce or eliminate price competition among its members,” overcharging over 170,000 students with hundreds of millions of dollars.
According to CNBC, most of the accused schools chose not to respond to the allegations, but Yale, Rice and Brown have responded with statements in their defense.
Rice University issued a statement: “After reviewing this lawsuit, we believe it is without merit. Rice University is proud of its financial aid practices and we are prepared to vigorously defend them in court.”.
The ongoing affirmative action case involving Harvard and UNC Chapel Hill, the Operation Varsity Blues scandal in 2019 and now this financial need lawsuit, creates issues concerning the admissions practices at reputable universities.
“This recent lawsuit reminds us that universities have an ethical responsibility to practice financial aid policies that are fair for all applicants,” College Advisor Erik McLeod said.
“It’s also important that they are honest and transparent in how they make their aid decisions. But even though these institutions are facing suit, they still remain fantastic schools that we will continue to recommend to our students.”
The case will be tried in court and more information about the decision will come soon.