Former alumni have filed a class-action lawsuit against sixteen private colleges and universities, accusing the group of breaking antitrust law by colluding to raise the price of attendance since 2003. This “price-fixing cartel” then allegedly set limits on how much financial aid any of their group would offer certain students. The suit also alleges that certain colleges engaged in “need-aware” admissions, dictating how many students that needed financial aid could be admitted. If true, this would directly contradict the self-ascribed “need-blind” admission process all of the schools say they adhere to.
All of the schools have either declined to comment on pending litigation or reaffirmed that their admissions and financial aid decisions are in compliance with all applicable laws.
What is Need-Blind Admission?
Need-blind admissions refers to making admissions decisions without consideration of a potential student’s ability to pay the sticker price of attending a college. It is considered a significant tool to encourage students of ability, regardless of their families’ financial status, to apply to and attend these very elite, very expensive schools. Being need-blind is a statutory requirement for institutions to participate in an antitrust exemption granted by Congress in Section 568 of the Improving America’s Schools Act of 1994. This exemption from certain antitrust laws – pending an institution’s commitment to remaining need-blind – remains in effect until September 30, 2022.
How Do these Schools Allegedly Operate as a “Price-Fixing Cartel?”
The lawsuit alleges that the consortium of elite universities known as “568 Presidents Group” decides on financial aid awards using a framework called the “consensus methodology.” This methodology is “explicitly aimed to reduce or eliminate price competition among its members,” violating federal antitrust laws, the lawsuit alleges. It goes on to say that eliminating competition in financial aid offers is “simply a means of coalescing around a uniform and lower level of aid to all prospective students.”
What Do We Know About These Schools?
The lawsuit alleges many practices and policies that have yet to be proven in court. But there is plenty that we already know about these institutions, based on Department of Education statistics. This fact sheet has pulled out and grouped together some of those data points that can help us begin to answer questions such as: How exclusive are these schools? How wealthy are they? How expensive are they on paper? How expensive are they in practice? Does a student get more interaction with teachers there? Does a student have a higher chance of graduating from there? And the ultimate question, which will vary on a case-by-case basis, are these elite institutions worth it?
The factsheets also points out how much schools varied along some indicators, such as size, wealth, or student-to-faculty ratio, and how homogenous they were along others, such as their graduation rates and their sticker prices to attend.