Major Universities Used Unfair Methodology To Calculate Student Financial Aid, New Lawsuit Alleges

Sixteen major universities in the U.S. were served a lawsuit in the Illinois federal court system Sunday over an alleged violation of antitrust law related to financial aid.

The suit alleges the universities, including Yale, Duke, Georgetown and Cornell, used an unfair, shared practice for determining student financial aid awards, as well as conducted price-fixing that “artificially inflated the net price of attendance for students receiving financial aid.”
Section 568 of the Improving America’s Schools Act of 1994 allows schools to be exempt from antitrust laws that would otherwise prohibit them from creating a common standard for calculating applicants’ financial need, provided that they make need-blind admissions decisions, according to The Wall Street Journal.

The class-action lawsuit claims at least nine of the defendants “for many years have favored wealthy applicants in the admissions process” during points in the admissions process and “made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid.” It alleges the other seven schools “may or may not have adhered to need-blind admissions policies” but “nonetheless conspired with the other Defendants.”