A class action lawsuit was filed on Sunday against 16 private colleges and universities, accusing them of running a “cartel” and violating antitrust laws in the way they calculate aid, forcing thousands of students to pay more than they should to register.
The lawsuit has been filed by five recent graduates, but seeks certification as a class action suit on behalf of thousands more students.
The targets of the lawsuit are Brown, Columbia, Cornell, Duke, Emory, Georgetown, Northwestern, Rice, Vanderbilt and Yale universities; California Institute of Technology; Dartmouth College; the Massachusetts Institute of Technology; and the universities of Chicago, Notre Dame and Pennsylvania.
Colleges are members of Group 568, which is made up of 21 colleges and universities that claim federal exemption from antitrust laws by developing and using a common methodology to grant aid as needed. The exemption was created by Congress after Ivy League colleges and MIT were tasked by the Justice Department with setting prices because they consulted on how to help admitted students in more than one establishment.
In 1991, all eight members of the Ivy League and MIT were charged with price fixing. The way it worked was for college representatives to get together to discuss their planned offers of help for students who had been admitted to more than one college. This practice limited price competition, prosecutors said. Colleges said the approach allows students to choose colleges based on suitability rather than price. The issue was the subject of much debate, but Ivy League colleges and MIT ultimately agreed to end the practice.
The new lawsuit acknowledges that the colleges have been granted an exemption from antitrust laws, but says nine of the colleges are not in fact blind.
“For many years, at least nine defendants favored wealthy applicants in the admissions process. These nine defendants thus made admission decisions with regard to the financial situation of students and their families, thus disadvantaging students who need financial assistance, ”indicates the trial.
The nine are Columbia, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn and Vanderbilt. The lawsuit accuses them of “failing to conduct their admissions practices without consideration of need, because all have made admissions decisions with due regard to the financial situation of applicants and their families, through policies. and practices that have favored the rich “.
Columbia University is under fire because its school of general studies, which the lawsuit says has 2,500 undergraduates, does not have blind admissions, according to the lawsuit. “The onus of supporting the preservation of Columbia’s prestige and financial accumulation therefore falls on those who can least afford it,” the lawsuit said.
“Dartmouth and Notre Dame are engaging in need-aware admissions through ‘enrollment management’,” the lawsuit accuses. “This is about ‘the systematic integration of admissions functions, the relationship between tuition and fees (pricing) and financial aid, and student retention, as well as the use of research to inform institutional policies and practices. ‘ It is a ‘management paradigm’ that brings together admissions and other institutional functions’ into a holistic institutional approach designed to allow college and university administrators to exert greater influence over the factors that shape their institutions. registrations ”.
The lawsuit also accuses that “many defendants take into account the ‘financial situation’ of applicants through the admission preferences granted to the children of wealthy past or potential donors, so that their chances of admission increase considerably.” If a college does this, the lawsuit charges, they should admit that there is no need to blind.
At Northwestern, President Morton Schapiro admitted that he personally makes decisions on hundreds of candidates a year. The claims it makes decisions about include some children of donors or alumni, as well as children of Northwestern teachers and staff.
At Penn, the lawsuit says, there are “beacons” for tracking applicants who are “a high priority for the institution.” Penn marks applications as “children of donors or potential donors.”
And what about the other seven accused? Brown, Caltech, Chicago, Cornell, Emory, Rice, and Yale “have been members of Cartel 568 for at least part of the past two decades. These seven defendants may or may not have adhered to admission policies blindly, but they nonetheless conspired with the other defendants, ”the trial said.
“In critical respects, elite private universities like [the] the defendants are the guardians of the American dream, ”indicates the trial. “The misconduct of the accused is therefore particularly flagrant because it has reduced a critical path to the upward mobility that admission to their institutions represents. The burden of overbilling the 568 Cartel especially falls on low- and middle-income families who struggle to afford the cost of a college education and succeed for their children. Additionally, unlike previous admissions scandals, such as Varsity Blues, the systematic removal of financial aid by the 568 Cartel is the official policy of its participants.
“Varsity Blues has taken the side door of admissions,” said Eric Rosen, the former federal and state prosecutor who led the Varsity Blues prosecution team and who is now a partner at Roche Freedman, one of the law firms that filed the complaint. “This case goes out the back door – alleging that, while conspiring together on a method of awarding financial aid, which raises prices net of tuition fees, the defendants also favor wealthy applicants in decision-making. ‘admission. The law does not allow them to do both.
None of the colleges prosecuted issued a detailed response, and most did not respond to Inside higher educationrequests for comments. Others said they never comment on litigation against the university.
Caltech said, “Caltech is currently reviewing the lawsuit and cannot comment on the specific allegations. However, we are confident in our financial aid practices.
Yale’s Director of Media Relations said, “Yale’s financial aid policy is 100% compliant with all applicable laws.