Judge permits price-fixing lawsuit to proceed towards Northwestern, University of Chicago, 14 different outstanding universities


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CHICAGO (CBS) — A category motion lawsuit is transferring ahead towards 16 outstanding universities, together with Northwestern University and the University of Chicago, accusing them of holding again monetary assist to college students who certified.

A federal decide on Monday denied a number of motions from the colleges’ protection attorneys, looking for to dismiss the case.

The lawsuit, filed in February, accuses the colleges of participating in a price-fixing method that lowered or eradicated monetary assist.

The swimsuit names 16 defendants: Ivy League colleges Brown University, Columbia University, Cornell University, Dartmouth College, University of Pennsylvania and Yale University, in addition to California Institute of Technology, Duke University, Emory University, Georgetown University, Massachusetts Institute of Technology, Northwestern University, Rice University, University of Chicago, University of Notre Dame and Vanderbilt University.

The lawsuit claims the colleges colluded to set monetary assist packages, whereas some faculties are additionally accused of discriminating towards low-income candidates. At least 170,000 alumni overpaid by “hundreds of millions of dollars,” claims the swimsuit, which was filed by 5 alumni of Duke, Northwestern and Vanderbilt who attended the colleges between 2003 and 2019. They are looking for class-action standing, which might let others be a part of the swimsuit.

All 16 establishments are, or have been, members of the 568 Presidents Group, a consortium that makes use of a standard methodology to find out college students’ monetary assist. An exception to federal antitrust legislation permits members of the group to work collectively to set monetary assist insurance policies.

With Monday’s courtroom ruling, the plaintiffs can now request info from the admission places of work.

History of price-fixing

Back within the Nineteen Nineties, the Justice Department charged a number of elite faculties with price-fixing, together with many present members of the 568 Presidents Group. Those faculties often communicated and gave “essentially the same financial aid award” to any scholar who was admitted to a number of colleges, in accordance with congressional research. The swimsuit ended with a settlement, and a 1994 law allowed faculties to maintain working collectively on monetary assist packages. 

Yet whereas the colleges are approved to collaborate in setting assist guidelines, they continue to be barred from discriminating towards low-income college students of their admissions. In writing the legislation, Congress specified that its aim was to unfold the advantages of economic assist as broadly as potential.

“The need-based financial aid system serves social goals that the antitrust laws do not adequately address — namely, making financial aid available to the broadest number of students solely on the basis of demonstrated need,” Congress wrote, including,  “No student who is otherwise qualified ought to be denied the opportunity to go to one of the nation’s most prestigious schools because of the financial situation of his or her family.”

According to the swimsuit, 9 faculties of the 568 Presidents Group explicitly break that legislation by courting the kids of ultra-wealthy households, declining to confess lower-income college students off wait lists or in any other case contemplating candidates’ monetary circumstances. The different seven defendants “conspired” with the 9, the grievance alleges. 

“Elite, private universities like Defendants are gatekeepers to the American Dream,” the swimsuit states. “Defendants’ misconduct is therefore particularly egregious because it has narrowed a critical pathway to upward mobility that admission to their institutions represents.”

The 568 Presidents Group didn’t reply to a message looking for touch upon the swimsuit.

Wait lists and “enrollment management” 

Three universities — Columbia, Penn and Vanderbilt — explicitly take into account monetary want in dealing with admissions, the swimsuit contends. 

Columbia’s School of General Studies, which has about 2,500 undergraduates who’re nontraditional college students or in dual-degree applications, shouldn’t be need-blind as required below the legislation, in accordance with media reports

Admissions officers for Penn, the place annual attendance prices $83,000, have stated they take into account the monetary wants of waitlisted college students when deciding whether or not to confess them, the grievance states. Vanderbilt, which prices practically $80,000 for one yr, says on its web site that it’s “need aware” when deciding whether or not to confess waitlisted college students.

Other faculties, together with Dartmouth and Notre Dame, use an “enrollment management” system that establishes a method for what number of college students on monetary assist will be admitted to satisfy the colleges’ funds targets, in accordance with the swimsuit. Because these formulation successfully prohibit the whole variety of low-income college students who can attend, the universities utilizing them aren’t actually need-blind, the swimsuit alleges. 

Wooing the rich

Other colleges explicitly search to recruit college students from rich households or give particular consideration to donors’ youngsters, the swimsuit claims. 

At Duke, a “couple of hundred” college students per yr get particular consideration as the kids of potential donors, the swimsuit states. The dean of admissions at Georgetown has stated that “special consideration” is given to “children of Supreme Court justices, senators and so on… because of the opportunities that may bring,” in accordance with the grievance. At Northwestern, the president has been recognized to personally assessment about 550 applications, “including applications associated with wealthy donors,” the swimsuit claims. 

Because elite faculties enroll solely a restricted variety of college students, favoring the rich or well-connected disadvantages others and is tantamount to discrimination, the swimsuit claims. And whereas colleges can resolve as a matter of coverage that they may favor the kids of the wealthy on the expense of everybody else, “they cannot lawfully conspire on financial aid policies,” the grievance states. 

“No one can reasonably dispute whether universities have colluded, or whether they maintain policies favoring potential donors,” Matt Stoller, analysis director of the American Economic Liberties Project, an anti-monopoly group, wrote in a e-newsletter. He added: “Elite universities want to imagine themselves as meritocratic, though in fact they cater to the wealthy professional class and the billionaires who employ them.”



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