Federal Lawsuit Alleges 16 Elite Universities Engaged In Price Fixing

[TexasTowelie]

Source: Forbes

Sixteen of the nation’s most elite universities are being sued for alleged violations of antitrust laws by colluding to unfairly limit student financial aid.

The lawsuit, which was filed in Illinois federal court by several law firms representing five students who previously attended some of the universities. was first reported in the Wall Street Journal.

The plaintiffs claim that the universities engaged in a price fixing scheme by sharing a methodology for how much financial aid would be awarded to prospective students. Specifically, the suit alleges that the defendant universities “have participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition, and that in fact has artificially inflated the net price of attendance for students receiving financial aid.”

If true, that would be a violation of Section 568 of the Improving America’s Schools Act of 1994, which says that universities can collaborate when they develop their financial aid formulas, but only if they do not consider applicants’ financial need in their individual admission decisions.

Read more: https://www.forbes.com/sites/michaeltnietzel/2022/01/10/federal-lawsuit-alleges-16-elite-universities-engaged-in-price-fixing/?sh=287b3d1a73ad

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The defendants are Brown University, California Institute of Technology, University of Chicago, Columbia University in the City of New York, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, Massachusetts Institute of Technology, Northwestern University, University of Notre Dame, University of Pennsylvania, Rice University, Vanderbilt University, and Yale University.

[bucolic_frolic]

1. Gee, ya think? /nt

[flying_wahini]

2. In other words the most expensive schools are doing it.

They don’t want poor people going there.

[getagrip_already]

8. more like they don't want to be outbid by more aggressive schools....

They are still offering aid, but since they know, and have agreed on how much, it ceases to be a deciding factor for students.

It also allows them to put a cap on financial aid without having to worry about getting skewed acceptance rates.


pretty slimey, but I don't think it's intended to keep poor students out.

[Mr. Evil]

9. Unless,

you can throw a ball, run while holding a ball or, are able to catch a ball while running.

[paleotn]

12. Other than Notre Dame and Duke only in basketball ....

the rest aren't really known for their athletics. In football, Duke, Vanderbilt and Northwestern are the perennial doormats of their power 5 conferences. Rice is the doormat of a non-power 5 conference. The Ivy's don't even give conventional athletic scholarships. Cal Tech competes in NCAA Div III. That's waaaaay out of the money leagues. But the one thing they all have in common is they're academic powerhouses. It's all about non compete agreements for academically gifted students when it comes to aid.

[jmowreader]

16. Two of the schools in the suit are MIT and Caltech

From what I’ve heard, those two schools take you into a room with a football on the table and ask you what it is.

If the answer is, “it is an oblate spheroid with a leather covering. It has a length of X and a circumference of Y. It has a density of W and requires a force of V newtons to cause the surface to deflect. The practical application of this object is unknown at this time, but due to its characteristics I believe it to be a well-preserved artifact of an unknown culture,” you receive the next question, which is “explain what happened at the Great Dome in May 1994” if you’re applying to MIT or “describe the seating at the Red Door Cafe in 1998” for Caltech prospects.

If you say it’s a football, they tell you the University of North Carolina would be a better fit for you.

[Quakerfriend]

3. Interesting that Harvard is not on the list.

My sons attended one of these schools.
We were not eligible for aid but,
I did notice that many of their friends from college were ‘uber’ rich- parents flew around the country to NBA games, one grew up in same CT neighborhood where Oprah and the Clintons had homes, homes in Aspen etc.
This has been going on at many more colleges, as well.

[kimbutgar]

4. or Stanford

[JT45242]

7. Stanford guarantees that people will only have to pay the Family Contribution portion from FAFSA

FAFSA gives you an expected family contribution (what they think the family can afford).

Schools are not required to give you enough financial aid to meet that projection. Those that do are probably not on the lawsuit (Case Western and Stanford are the two that my son applied to),

[kimbutgar]

10. I wish I was smarter when I was younger to go to Stanford ! Sigh!

[marie999]

14. 90% of Harvard's undergraduates pay less than going to a state school.

If parents make under $65,000 tuition is free. There is a sliding scale for others whose parents make less than $150,000. Over half of their students are POC. Of course, Harvard can afford it with an endowment of over $53 billion.

[oldsoftie]

5. Wonder what the total of all their endowments are?

[EarthFirst]

6. The majority of that list is in the top ten...

collectively with 210 billion in endowments on their ledgers.

https://www.usnews.com/education/best-colleges/the-short-list-college/articles/10-universities-with-the-biggest-endowments

Have a look at the top boarding schools endowment funds; many in the billions themselves

https://www.businessinsider.com/richest-boarding-schools-in-america-2016-2

[paleotn]

13. More than the GDP of most countries.

[Yandex]

11. Cancel all student loans from those schools!

Bastards!

[msfiddlestix]

15. Whoa. Had no idea this was a scheme

I'm fuzzy on how it actually works, even though it is laid out in these excerpts.

But that's because my thinking on profit schemes have always been rather dense.