Major Universities Accused of Colluding To Overcharge Students

Major Universities Accused of Colluding To Overcharge Students

A lawsuit accuses 40 universities, including Ivy League giants Harvard and Columbia, of conspiring to hike tuition fees.

At a Glance

  • 40 elite universities, including Harvard and Columbia, are alleged to have colluded to raise tuition fees.
  • The lawsuit targets the College Board’s financial aid methodology affecting students with divorced parents.
  • Plaintiffs claim this scheme unjustly increased students’ financial burdens, reducing their aid.
  • The lawsuit seeks over $5 million in damages and aims to halt the alleged practices.

Allegations Against Universities

A federal lawsuit claims that 40 elite universities, such as Harvard, Columbia, and New York University (NYU), engaged in a price-fixing scheme. The scheme allegedly increased tuition costs for students with divorced or separated parents by requiring financial information from both parents. This allegedly led to decreased scholarship allocations.

The lawsuit specifically accuses the College Board of developing a financial aid methodology that universities have used since 2006. This methodology allegedly requires schools to consider noncustodial parents’ financials, potentially denying scholarships to eligible students.

CSS Profile and Financial Aid

The complaint highlights how the CSS Profile, used by various schools, demands financial information from both parents. This differs from the FAFSA, which only considers the custodial parent’s assets. The added financial burden due to these policies has drastically affected students from divorced homes, leading to reduced financial aid, according to the lawsuit.

“The financial burden of college cannot be overstated in today’s world, and we believe our antitrust attorneys have uncovered a major influence on the rising cost of higher education,” said Steve Berman of Hagens Berman, representing the plaintiffs.

The lawsuit seeks over $5 million in damages alongside legal orders to prevent future price-fixing. The plaintiffs, including a Boston University student and a Cornell University alum, argue their financial aid was unfairly reduced due to these stringent requirements.

Reactions and Legal Endeavors

The College Board has stated confidence in its ability to overcome the lawsuit, despite accusations that its framework was unduly influenced. Many universities, such as NYU, insist the lawsuit lacks merit, indicating they will robustly defend their financial aid policies.

This lawsuit echoes earlier claims resolved this year, where Dartmouth and 16 other universities settled similar allegations. Plaintiffs argue that absent these agreements, universities would actively compete to provide better financial aid offers to top candidates.

This lawsuit, filed in Illinois’s Northern District Court, exposes systemic issues in college financial aid practices. It challenges the transparency and ethics of leading education institutions in prioritizing their financial frameworks over students’ needs.

The case calls for more equitable policies to ensure students aren’t disproportionately disadvantaged based on parental marital status.

Sources

  1. Harvard, other top universities colluded to inflate tuition for students of divorced parents, suit claims
  2. Harvard and Yale among dozens of universities targeted in financial aid price-fixing lawsuit
  3. Elite colleges accused of price-fixing to make divorced parents pay more