Colleges and Universities Fixed-price financial aid, allegations of lawsuits

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At this point, it’s no secret that higher education in America is extremely expensive. This is why financial aid is so important: grants and scholarships can change the lives of students, especially those in low-income communities. However, a new lawsuit alleges colleges and universities may be missing out on students who need help the most. As of January 2022, 16 top US 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 – are being sued in federal court for alleged antitrust violations in an illegal price-fixing scheme .

The lawsuit was filed at the end of January 9 on behalf of several former students who attended some of the schools accused of participating in the scheme. The lawsuit alleges that the schools effectively eliminated competitive student financial aid offers by working together to come up with a common practice for determining student financial need. The lawsuit alleges that 16 colleges and universities unlawfully considered their applicants’ ability to pay tuition as a factor in their admission and overcharged partial financial aid recipients in order to keep tuition net and avoid “losing admitted students to competing schools”.

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Under Section 568 of the American Schools Improvement Act of 1994, it’s not illegal for colleges and universities to collaborate on their financial aid packages — but only if they don’t hold consideration of applicants’ financial needs in admissions decisions. However, the lawsuit alleges that the schools “have favored wealthy applicants in the admissions process” for years. “Those [schools] have thus made admissions decisions taking into account the financial circumstances of students and their families, thereby disadvantaging students in need of financial assistance,” the lawsuit alleges. In short, schools would have looked at students’ ability to afford tuition when considering whether or not to accept it.

The lawsuit claims each school allegedly involved in the price-fixing scheme conspired to reduce the amount of financial aid it provides to admitted students, placing them in breach of the Schools Improvement Act 1994 Americans.

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A California Institute of Technology spokesperson responded, “Caltech is currently reviewing the lawsuit and cannot comment on the specific allegations. However, we are confident in our financial aid practices. A Yale University spokesperson also responded, “Yale’s financial aid policy is 100% compliant with all applicable laws. Rice University responded, “After reviewing this lawsuit, we believe it is without merit. Rice University is proud of its financial aid practices, and we stand ready to vigorously defend them in court.

Cornell University, University of Chicago, Columbia University, Dartmouth College, Northwestern University and University of Pennsylvania all declined Elite Daily’s request for comment on their financial aid practices. school. Brown University, Duke University, Emory University, Georgetown University, Massachusetts Institute of Technology, University of Notre Dame and Vanderbilt University did not respond to requests for comment.

The lawsuit seeks to permanently end the alleged illegal collaboration of schools in the calculation of financial aid formulas – and to collect damages. While the lawsuit was filed on behalf of five specific students, according to The Wall Street Journal it could expand and up to 170,000 students who received financial aid at the named schools could be eligible. “For nearly two decades, [involved schools] overcharged more than 170,000 financial aid recipients by at least hundreds of millions of dollars,” the lawsuit alleges.

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The allegations are not the first time schools have been accused of discriminatory admissions practices. According to a 2020 study by The Education Trust, “almost 60% of [highly selective] colleges and universities, the percentage of black students has actually declined since 2000.” Meanwhile, “white students often come from wealthier households, requiring less financial assistance to pay for their education,” per The Hechinger Report.

Although Section 568 of the American Schools Improvement Act of 1994 is set to expire in September 2022 if Congress does not restore it, attorneys handling the case say the schools involved would remain liable for overcharging recipients. partial financial assistance in recent years. So watch this space.

The fixed price financial aid post for colleges and universities, according to the lawsuit, appeared first on Elite Daily.

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