Education

Yale and Columbia Are Ripping Off Financial Aid Students, Lawsuit Says

By Paul Blest,  Vice

The lawsuit calls the group schools a “price-fixing cartel.”

More than a dozen of the nation’s top universities—including Ivy League universities Yale, Brown, Columbia, Dartmouth, Cornell, and the University of Pennsylvania—allegedly used their financial aid policies to rip off more than 170,000 students for hundreds of millions of dollars, according to a lawsuit filed in Illinois Sunday.

The lawsuit, filed on behalf of five former students, alleges that for two decades, the universities “have participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition, and that in fact has artificially inflated the net price of attendance for students receiving financial aid.”

This “cartel” refers to the 568 Presidents’ Group, a committee of private colleges and universities formed in the late 1990s to create a “consensus methodology” for “determining the family’s ability to pay for college,” or a formula for financial aid, according to the group’s website.

The group was formed after high-profile Justice Department antitrust lawsuits against the Massachusetts Institute of Technology and several Ivy League universities for engaging in fixing the price of tuition and faculty salaries. Federal antitrust legislation passed in 1994 further regulated the process, saying that colleges can work together to share some financial aid information, including a common application for financial aid.

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