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Dartmouth College and Northwestern and Vanderbilt Universities have become the latest institutions to settle a financial aid antitrust lawsuit that accused 17 institutions of illegally colluding to limit student financial aid packages. Dartmouth will pay $33.75 million, Northwestern $43.5 million, and Vanderbilt $55 million.
The class action case filed in January 2022 alleges that the highly selective universities effectively operated a “cartel” by colluding in the way they calculated financial aid awards. As a result, thousands of students overpaid for their education, plaintiffs argue.
Inside Higher Ed reported last month that Rice and Vanderbilt had agreed to settle their portions of the suit, and that Rice had agreed to pay $33.75 million. At the time Vanderbilt did not respond to requests to confirm that it was settling, and how much it was paying.
The settlements by Dartmouth, Northwestern and Vanderbilt bring to 10 the number of the original 17 plaintiffs that have agreed to settle. Collectively, they have agreed to pay $284 million.
The seven remaining are California Institute of Technology, Cornell, Georgetown and Johns Hopkins Universities, Massachusetts Institute of Technology, and the Universities of Notre Dame and Pennsylvania.
“These 10 settlements shine the spotlight on the seven remaining elite institutions that have yet to do the right thing and rectify the overcharges to their alumni and students who came from working-class and middle-class backgrounds,” Robert D. Gilbert, a lawyer for the plaintiffs, said in a statement.
The 17 universities had long collaborated on financial aid formulas under a 1994 federal antitrust exemption, which banned them from weighing applicants’ ability to pay in admissions decisions. The carve-out—known as the 568 Presidents Group, after a section in the Improving America’s Schools Act of 1994—allowed them to discuss financial aid formulas with immunity from federal antitrust laws.
But the plaintiffs, a group of former students, alleged that the 17 defendants have long considered family finances in certain admissions decisions, partly by giving preferential treatment to the children of affluent donors.
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