A new federal lawsuit accused 16 top universities of illegally colluding to limit financial aid for students, The Wall Street Journal reports.
The lawsuit, filed by five former students in Illinois on Sunday, accuses universities including Yale, Georgetown, Columbia, and Northwestern of antitrust violations.
The lawsuit alleges that the schools are engaged in price-fixing and unfairly limit financial aid by using a shared methodology to determine their formulas for how much aid a student can receive.
Under federal law, universities can collaborate on these formulas but only if they don’t consider students’ financial need in admission decisions. The suit argues that the schools in question violated the rule because they consider applicants’ ability to pay in certain instances.
The suit calls for the permanent aid of the collaboration.
Potential class action:
The other schools included in the lawsuit are Brown, Cal-Tech, University of Chicago, Cornell, Dartmouth, Duke, Emory, MIT, Notre Dame, University of Pennsylvania, Rice, and Vanderbilt.
Lawyers for the plaintiffs said that more than 170,000 former students who received financial aid from the schools over the last 18 years could be eligible to join the lawsuit.
“While conspiring together on a method for awarding financial aid, which raises net tuition prices, defendants also consider the wealth of applicants and their families in making admissions decisions,” said attorney Eric Rosen.
Colleges refute:
A spokesperson for Yale said the school’s "financial aid policy is 100% compliant with all applicable laws."
A Brown spokesperson told Axios that "based on a preliminary review, the complaint against Brown has no merit and Brown is prepared to mount a strong effort to make this clear."
An MIT spokesperson said it is reviewing the filing and "will respond in court in due time."
A Caltech spokesperson said the school is "currently reviewing the lawsuit and cannot comment on the specific allegations. We have confidence, however, in our financial aid practices."
