More institutions settle financial aid antitrust lawsuit

January 24, 2024
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Eight of 17 defendants have now settled in a federal financial aid antitrust lawsuit.

Photo illustration by Justin Morrison/Inside Higher Ed | Getty Images

After more than a year of litigation regarding a federal antitrust lawsuit against 17 wealthy universities, more institutions reached preliminary settlement agreements Tuesday.

Brown, Columbia, Duke and Yale Universities all filed settlement agreements Tuesday, according to court documents. Emory University also filed documents to formally settle, though Inside Higher Ed reported last week that Emory had already noted a settlement agreement in its fall financial documents. Those institutions join the University of Chicago, which was the first to settle back in August, as well as Rice and Vanderbilt Universities, which quietly settled in the fall or reached agreements to do so pending court approval.

The latest settlement filings mean nine defendants remain in the case.

The lawsuit was brought by a group of former students against 17 institutions known as the 568 Presidents Group, a reference to a carve-out in the Improving America’s Schools Act of 1994 that allowed them to discuss financial aid formulas with immunity from federal antitrust laws due to their need-blind status. However, plaintiffs have alleged that the 17 need-blind institutions considered family finances in admissions decisions, which ultimately amounted to illegal collusion on financial aid formulas. The universities are accused of favoring affluent applicants and ultimately overcharging students for tuition and fees for years.

Legal counsel for the plaintiffs allege that as many as 200,000 students may have been affected.

Plaintiffs initially filed suit against Brown University, the California Institute of Technology, the University of Chicago, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, the Massachusetts Institute of Technology, Northwestern University, the University of Notre Dame, the University of Pennsylvania, Rice University, Vanderbilt University and Yale University. Johns Hopkins University was added later.

Of the institutions that have settled, Rice has the highest known price tag: $33.7 million, according to university financial documents. Columbia and Duke reached preliminary settlement agreements for $24 million each, while Brown struck a deal for $19.5 million and Yale and Emory are on the hook for $18.5 million. Chicago settled for $13.2 million last year. The settlement amount for Vanderbilt has not yet been reported and does not appear in court records.

Altogether, the known settlements add up to more than $151 million.

Robert D. Gilbert, a partner at Gilbert Litigators & Counselors, which represents the plaintiffs, said in a press release, “It is past time for the presidents and governing bodies of the remaining defendants to stand up and do the right thing for their students and alumni, and resolve the overcharges to middle class and working class students that stemmed from the twenty years of collusion on financial aid by elite universities.” 

Brown was the first institution to offer comment on the settlement Tuesday night, noting in a statement from university spokesperson Brian Clark that “the claims have no merit” but that “ongoing litigation would divert significant resources from Brown’s focus on its core priorities.”

Clark added that he believed Brown would have prevailed in litigation.

Vanderbilt, which settled earlier, struck a similar tone.

“Though we believe the plaintiffs’ claims are without merit, we have reached a settlement in order to maintain our commitment to the privacy of our students and families and keep our focus on providing talented scholars from all social, cultural and economic backgrounds one of the world’s best undergraduate educations,” a university spokesperson said by email.

Emory also denied any wrongdoing related to its settlement.

“While Emory continues to believe the plaintiffs’ claims have no merit, we are pleased the litigation is behind us,” university spokesperson Laura Diamond said by email. “Our focus has been and always will be to make an Emory education accessible to all talented students, regardless of their financial resources, and we look forward to continuing that mission.”

The preliminary settlement agreements filed Tuesday evening are subject to court approval.

Inside Higher Ed reached out to Columbia, Duke and Yale for comment on Tuesday evening immediately after the settlement agreements were filed but none responded with a comment.

The remaining nine defendants—Caltech, Cornell, Dartmouth, Georgetown, MIT, Northwestern, Notre Dame, Penn and Johns Hopkins—did not respond to requests for comment late Tuesday.

This is a developing story and will be updated.



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