Cal Tech, Yale, MIT sued for collusion to withhold financial aid – Orange County Register

By Michael Leonard and Janet Lorin | Bloomberg

More than a dozen top U.S. colleges including Cal Tech, Yale, Columbia and MIT have been sued for allegedly conspiring to manipulate the admissions system to withhold financial aid for students and benefit those in need. rich candidate.

The proposed antitrust class action, filed Sunday in federal court in Chicago, accuses the university of “cartel” in a long-term plan to collectively apply “a common formula for determining determine an applicant’s ability to pay” tuition, rather than competing freely for financial aid by trying to attract students through more generous aid offers.

At the same time, more than half of the schools gave preference to wealthy applicants by tilting the scale to favor the children of “past or potential future donors” and “through a covert operations known as “administration of admissions,” according to the complaint.

“Private, elite universities” are “gatekeepers to the American Dream,” making the alleged conduct “particularly egregious because it has narrowed a key pathway to mobility.” growth that their school admissions represent,” according to the lawsuit.

Top School

In addition to Yale and Columbia universities and the Massachusetts Institute of Technology, the defendants in the lawsuit include Brown, University of Chicago, Cornell, Dartmouth, Duke, Emory, Georgetown, Northwestern, Notre Dame, University of Pennsylvania, Rice and Vanderbilt .

The schools allegedly acted illegally in requesting an antitrust waiver under Section 568 of the U.S. School Improvement Act of 1994. The waiver only applies to schools that exercise admissions Necessary blindness, the lawsuit said.

Some of the wealthiest colleges in the US describe themselves as blind to admissions because they don’t consider a family’s finances as a factor to consider before accepting applicants. To qualify for need payments, families must fill out a lengthy questionnaire about their finances.

Colleges use a formula to determine what they will offer in grant aid. They are different, and wealthier schools may be more generous. For example, some colleges do not consider home equity when making financial aid awards.

Shock

With their wealth growing from their endowment performance, universities have been criticized for their high prices, close to $80,000 a year for tuition, accommodation, books and other expenses. Many of the schools named in the lawsuit offer the most generous financial aid to low-income students. About three dozen schools changed their policies more than a decade ago to offer grants rather than loans in financial aid packages.

One top school not among the defendants is Harvard University. It was one of the universities that declined to participate in the so-called 568 Cartel because it would limit the financial aid they could provide, according to the lawsuit.

In 2008, Harvard’s director of financial aid at the time, Sally Donahue, said the school never joined the group because its financial aid formula would yield smaller packages than what it wanted to give, according to the petition.

The case is Henry v. Brown Univ., 22-cv-125, United States District Court, Northern District of Illinois (Chicago).