Yale, Duke and Columbia Among Elite Schools to Settle Price-Fixing Case

For nearly a quarter-century, a coterie of the country’s most elite universities had a legal shield: They would be exempt from federal antitrust laws when they shared formulas for measuring the financial needs of prospective students.

But the provision included a crucial requirement: that the cooperating universities’ admissions processes be “need-blind,” meaning they could not take into account whether a prospective student was wealthy enough to pay.

A court filing filed Tuesday night revealed that five of those universities — Brown, Columbia, Duke, Emory and Yale — collectively agreed to pay $104.5 million to settle a lawsuit that accused them of, in effect, weighing ability when they deliberated on destinations. of some applicants.

Although the universities did not admit wrongdoing and resisted accusations that their approach had harmed students, the settlements call into question whether the schools, which spent years extolling the generosity of their financial aid, did everything they could to reduce the license plates.

In separate statements after the court filing, Columbia and Brown denied wrongdoing and maintained that all financial aid decisions were made in the best interests of students and their families. Resolving the case, Brown said, will allow him to “focus his resources on further growth of generous student aid.”

The settlements by the five universities came months after the University of Chicago agreed to pay $13.5 million to settle its part of the case. Other schools, including Cornell, Georgetown, Johns Hopkins, MIT and the University of Pennsylvania, remain mired in litigation, with no trial date set.

The extensive lawsuit It targeted 17 schools, which were, or had been, members of the 568 Presidents Group, named for the legal provision that offered antitrust coverage. The case held that the colleges actually failed to comply with the need-blind admissions mandate when deliberating on waitlisted applicants, making their financial aid protocols illegal.

Vanderbilt University, for example, said on one of its websites in 2018 that it reserved “the right to take need into account when admitting waitlisted students,” echoing previous statements by university employees.

Vanderbilt, based in Nashville, told the court last year that it planned to settle.

By considering necessity in any context, the lawsuit argued, the universities were defying the conditions of their antitrust exemption. Complicating the path for universities, the case was based on a legal doctrine that holds that members of a group are responsible for the actions of others in the same group.

Ultimately, the suit claimed, some 200,000 students over about two decades were overcharged because Group 568 had eliminated cost competition, leaving the net price of attendance “artificially inflated.”

If colleges had competed more aggressively for financial aid, according to the lawsuit, students could have received more support and spent less to attend college.

The antitrust shield expired in 2022 and Group 568 was dissolved.

Although the University of Chicago said the lawsuit was “meritless” when it settled the case, it agreed to share records that could be valuable in litigation against the other universities.

Since then, a handful of other universities have made similar calculations, admitting no fault while limiting both their financial exposure and the risk of damaging disclosures emerging in records or statements.

“While we believe that the plaintiffs’ claims are without merit, we have reached a settlement in the best interest of our continued focus on providing talented scholars from all social, cultural and economic backgrounds with one of the best university educations in the world and the opportunity to graduate. debt-free,” Vanderbilt, which is still finalizing his deal, said in a statement.

For plaintiffs, the planned settlements offer an advantage beyond the surge of money to be divided between students and lawyers: By thinning the ranks of defendants, they also expedite a case that could prove exceptionally complex at trial.

Emory and Yale are expected to pay $18.5 million, and Brown will settle for $19.5 million. Columbia and Duke agreed to pay $24 million each. Regardless of Tuesday’s presentation, Rice University said in a recent financial statement which had agreed to pay almost $34 million.

In their filing Tuesday, plaintiffs’ attorneys said the settlements “were not reached as a group or all at once, but were carried out separately over time.” The attorneys added that they had “pursued a strategy of increasing settlement amounts with each successive agreement or set of agreements to put pressure on non-settled defendants to settle imminently or risk having to pay a lot more waiting.”

Financial aid practices at elite universities have long been the subject of antitrust scrutiny. In the late 1980s, the Justice Department opened an investigation into price fixing, which led to a series of settlements in the 1990s as Ivy League schools sought to avoid potentially titanic legal fights. (MIT rejected a settlement at first and opted for a trial. It later also settled with the government, and the settlement language became a kind of model for Section 568.)

In a filing last year, the Justice Department expressed support for some of the legal arguments behind this current civil case that the schools are resolving.

Stephanie Saul contributed reports.