Students Allege Price Fixing in Elite College Admissions

A federal class action lawsuit has been filed in Illinois against 16 universities — Brown University, California Institute of Technology, University of Chicago, Columbia University, 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 — alleging these institutions conspired to price fix. And how did these schools try to eliminate the competition, do the students allege? By eliminating competitive financial aid offers by artificially inflating the cost of attendance.

16 Elite Universities Sued for Alleged Anti-Competitive Price Fixing

As Danielle Douglas-Gabriel and Susan Svrluga report for The Washington Post in a piece entitled “Former students sue Georgetown, Columbia and other elite universities over financial aid practices,” “The complaint, filed Sunday in a federal court in Illinois, claims the universities use a shared methodology to calculate financial need in a way that reduces institutional dollars to students from working- and middle-class families. Attorneys estimate that more than 170,000 students who received partial financial aid in the past 18 years have been harmed by the practice…By law, colleges can create common guidelines to determine financial aid if they engage in ‘need-blind’ admissions, accepting students without regard for their financial circumstances. Students who can afford to pay full price are attractive to institutions managing the cost of doling out scholarships and grants. Need-blind policies are meant to create economic and racial diversity at prestigious schools that have long been bastions of wealth and privilege…But attorneys for the former students say at least nine universities…still favor the wealthy by maintaining admissions policies that give a leg up to the children of past or potential donors. Some also consider a students’ ability to pay when admitting them to certain programs or off the waiting list, the lawsuit alleges.”

We Have Long Asserted Need-Blind Admissions Is a Farce

Loyal readers of Ivy Coach’s college admissions blog know all too well where we stand on the issue of “need-blind admissions.” In short, it’s a farce. If colleges were truly need-blind, so many elite universities wouldn’t ask if students need financial aid on their application supplements, which admissions officers can read with their own two eyes. Instead, they’d be blind to this answer. The fact is elite colleges rely on tuition dollars. If they were truly need-blind, they’d risk admitting a class in which every student needed financial aid, which would require deep dips into the endowments. In reality, elite colleges are need-aware. It will thus be interesting to see what comes of this class action lawsuit and if these schools’ “need-blind admissions” policies will hold water in the eyes of the federal court.