Federal law allows schools to collaborate on their formulas for determining the amount of financial aid to award students, but they are not allowed to consider an applicant’s need for aid when determining whether to accept their application to become a student. A recent class-action lawsuit against 16 major U.S. universities alleges that, not only were the universities collaborating on their financial aid formulas, but that they did so in order to fix their prices, and that their actions unfairly limited the financial aid students were able to receive. The federal lawsuit also alleges that the defendants do factor an applicant’s need for aid in their admissions decisions and is therefore claiming they should not be eligible for the antitrust exemption.
Not only did this allegedly cheat undergraduate applicants out of financial aid, but if the allegations are true, they also would have made it more difficult for underprivileged candidates to gain admission to the universities.
The lawsuit is seeking a permanent injunction against the schools’ ability to collaborate on financial aid formulas, as well as damages to five former students who attended some of the schools.
But the five named plaintiffs are just the tip of the iceberg. The financial aid lawsuit currently names 16 of the biggest universities in the U.S. as defendants, including Georgetown University, Northwestern University, and Yale University. With so many schools listed as defendants in the federal financial aid lawsuit, the attorneys representing the plaintiffs think more than 170,000 undergraduate students who received at least partial financial aid from those schools over the past 18 years could be eligible to participate in the federal class-action lawsuit. Continue reading ›