A new lawsuit has been filed accusing 40 of the United States’ most prestigious universities of colluding to inflate tuition costs by taking noncustodial parents’ financial assets into account when determining students’ financial aid. According to Reuters, the class action lawsuit, initiated by a Boston University student and a Cornell University graduate, was lodged late Monday in a federal court in Chicago.
Named defendants include major academic institutions such as Harvard, Yale, Cornell, Georgetown, Northwestern and Dartmouth, alongside the nonprofit College Board, which is alleged to have developed the contested financial aid methodology. The lawsuit claims this practice has caused significant financial harm to students, particularly by eliminating competition among the universities in offering financial aid packages to attract top candidates.
The plaintiffs’ attorneys argue that the College Board, in 2006, pushed schools to adopt a policy that considered the assets of noncustodial parents when determining financial aid eligibility. Per Reuters, the schools allegedly coordinated to maintain this practice, which the lawsuit asserts results in students paying thousands of dollars more compared to institutions that do not use this financial assessment method.
“Paying for tuition is a hardship for almost every family,” said Steve Berman, one of the lawyers representing the students, in a statement. “This case seeks to remedy a price-fixing agreement that has raised the cost of paying for college.” Berman further noted that without this alleged collusion, schools would likely have competed to offer more generous financial aid.
The plaintiffs estimate that over 20,000 students may be affected, and the lawsuit seeks over $5 million in damages, as well as an order to halt the alleged price-fixing practices.
The schools named in the lawsuit, including elite institutions such as Stanford, Columbia, New York University, and Duke, either declined to comment or did not immediately respond to requests for statements, per Reuters. The College Board, which has also been named as a defendant, similarly refrained from commenting.
This lawsuit marks the second major antitrust case to target U.S. colleges for financial aid practices in recent years. Earlier, another case filed in Illinois resulted in a judge approving $284 million in settlements with several prominent universities, including Columbia and Brown, over allegations that they favored wealthy applicants in the admissions process.
The latest case, titled Maxwell Hansen and Eileen Chang v. Northwestern University et al, is being heard in the U.S. District Court for the Northern District of Illinois.
Source: Reuters
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