A string of Ivy League universities in the United States, including Yale and Columbia, reached additional preliminary settlements on Jan. 23 in a case alleging that the institutions engaged in price-fixing tied to student aid.
The largest settlements, amounting to $24 million each, were agreed upon by Columbia University and Duke University, while Yale and Emory agreed to pay $18.5 million each.
Brown University agreed to a $19.5 million settlement, bringing the total combined payment from all the universities to approximately $104.5 million, according to court documents.
The payments are the result of a lawsuit filed in the Northern District of Illinois in February 2022 by former students and parents against more than a dozen renowned schools across the country.
The plaintiffs alleged that approximately 17 elite universities systematically violated U.S. antitrust laws for years by failing to admit students on a fully “need-blind” basis, which is a policy where universities do not consider a student’s ability to pay tuition when determining admission.
They further alleged that the institutions colluded to collectively determine financial aid offers by exchanging information about their respective policies and practices. This exchange occurred, among other methods, through their participation in the “568 Presidents Group,” named after Section 568 of the Improving America’s Schools Act of 1994, which has since been dissolved.
Universities Acted Like ‘Cartel’
According to the lawsuit, in which the plaintiffs referred to the schools as a “cartel,” the practice meant that wealthy students and children of potential donors were favored over others, giving them an unfair advantage.The plaintiffs further argued that the alleged conspiracy led to the schools artificially reducing financial aid and systematically increasing the net tuition prices paid by over 200,000 current and former US college students.
The schools listed in the lawsuit were: Brown University, California Institute of Technology, University of Chicago, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, Johns Hopkins University, Massachusetts Institute of Technology, Northwestern University, the University of Notre Dame, the University of Pennsylvania, Rice University, Vanderbilt University, and Yale University.
The University of Chicago, Emory University, and Rice University have already reached multi-million dollar settlements in the case, while the remaining universities have yet to settle.
Vanderbilt University has also reached an agreement in principle to settle, but the amount of that settlement has not yet been publicly disclosed.
Schools Deny Wrongdoing
All of the schools listed in the lawsuit have vehemently denied any wrongdoing and maintained that all financial aid decisions are made in the best interests of families and in compliance with legal requirements. However, they all agreed to the settlements in exchange for having the cases dismissed.In a statement on Tuesday, Ted Normand, a partner at Freedman Normand Friedland and one of the lead counsel for the plaintiffs, said that the settlements stand to be a “significant benefit for the members of the proposed class.”
Robert D. Gilbert, a partner at Gilbert Litigators & Counselors, said: “It is past time for the presidents and governing bodies of the remaining defendants to stand up and do the right thing for their students and alumni, and resolve the overcharges to middle-class and working-class students that stemmed from the twenty years of collusion on financial aid by elite universities.”
The schools confirmed in separate statements on Tuesday that they had reached settlements with the plaintiffs, but continue to deny any wrongdoing.
Brown spokesperson Brian E. Clark said: “Throughout our limited participation in the group and at all times after we withdrew, Brown has awarded its financial aid exclusively on the basis of student and family financial need.
“We have and continue to make financial aid decisions independently and in alignment with our own institutional methodologies for determining need. And we meet full demonstrated financial need so that no student’s family socioeconomic circumstances prevent them from accessing the benefits of a Brown education.”
“This settlement contains no admission that Yale did anything wrong but allows the university to avoid the cost and disruption of further litigation and to continue its work in making undergraduate education more affordable for more families,” a Yale spokesperson told CNN.
An Emory spokesperson said: “While Emory continues to believe the plaintiffs’ claims have no merit, we are pleased the litigation is behind us. Our focus has been and always will be to make an Emory education accessible to all talented students, regardless of their financial resources, and we look forward to continuing that mission.”
