Dartmouth College, Northwestern University and Vanderbilt University became the latest institutions to settle a financial aid antitrust lawsuit that accused 17 colleges of illegally colluding to limit student financial aid packages. Dartmouth will pay $33.75 million, Northwestern will pay $43.5 million, and Vanderbilt will pay $55 million.
The class action lawsuit, filed in January 2022, alleges that highly selective colleges colluded in the way they calculate financial aid amounts, effectively operating a “cartel.” As a result, thousands of students overpaid for their education, the plaintiffs claim.
Inside higher education Last month, Rice and Vanderbilt agreed to settle their parts of the lawsuit, with Rice reportedly agreeing to pay $33.75 million. At the time, Vanderbilt did not respond to a request to confirm whether there was a settlement and how much it would be paid.
The settlement by Dartmouth, Northwestern and Vanderbilt brings them to 10 of the 17 plaintiffs who agreed to the original settlement. Together they agreed to pay $284 million.
The remaining seven universities are California Institute of Technology, Cornell University, Georgetown University, Johns Hopkins University, Massachusetts Institute of Technology, University of Notre Dame, and University of Pennsylvania.
“These 10 settlements shine a spotlight on the remaining seven elite institutions that have yet to do the right thing and correct excessive fees for graduates and students from working-class and middle-class backgrounds,” said attorney Robert D. Gilbert. he said in a statement for the plaintiffs.
The 17 colleges have long collaborated on financial aid formulas under a 1994 federal antitrust exemption that prohibited them from evaluating applicants' ability to pay in admissions decisions. The split, known as the 568 Presidents Group, under some provisions of the Improving America's Schools Act of 1994, allowed them to discuss a financial aid formula that would be exempt from federal antitrust laws.
But the plaintiffs, a group of former students, alleged that the 17 defendants had long considered family finances in certain admissions decisions, in part providing preferential treatment to the children of wealthy donors.