“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 Hagens Berman managing partner and co-founder Steve Berman.
A prospective class-action lawsuit accuses many of the nation’s top-ranked universities of participating in a price-fixing scheme to keep tuition high.
According to NBC News, the lawsuit names forty schools as defendants, including Harvard, Cornell, Dartmouth, Brown, and Yale. It was filed on behalf of a Boston University student and a Cornell University alumnus. Together, the two defendants say that elite colleges have taken advantage of incoming students with divorced or separated parents, who are still required to provide information about their noncustodial parent when applying for need-based financial aid.
Attorneys for the plaintiffs say that the universities engaged in a “concerted action” to require information about applicants’ noncustodial parents. This information would then be considered a factor in the determination of financial aid packages, a service provided by the College Board, a nonprofit and co-defendant in the claim.
Under the College Board’s methodology and rules, schools have to consider noncustodial parents’ incomes, even when noncustodial parents provide little to no support for their children.
“Students were told there were no exceptions to the requirement—even if a divorce court order was issued concerning college expenses,” the lawsuit alleges.
The defendant universities generated financial aid offers using information about students’ custodial and noncustodial parents, presuming that both would contribute to the costs of a child’s college education.
The lawsuit alleges the College Board’s calculation methodology was designed by individuals closely associated with the defendant universities. NBC News notes that the complaint emphasizes that the College Board’s current Financial Assistance Assembly Council chair is currently employed at Columbia University. Another of its chairs has also served as Harvard’s director of financial aid.
The purportedly “price-fixing” scheme increased tuition at participating schools by about $6,200.
“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 Hagens Berman managing partner and co-founder Steve Berman.
“Those affected—mostly college applicants from divorced homes—could never have foreseen this alleged scheme was in place, and students were left receiving less financial aid than they would in a fair market,” said Berman, whose firm filed the lawsuit.
A spokesperson for the College Board told Harvard’s student newspaper, the Harvard Crimson, that the nonprofit is “reviewing” the lawsuit but is “confident that [it] will prevail in this action.”
The lawsuit seeks at least $5 million in damages as well as a court order preventing the defendant universities from continuing to participate in the alleged conspiracy.
Sources
Harvard and Yale among dozens of universities targeted in financial aid price-fixing lawsuit
Harvard, Other Ivies Accused of Violating Federal Antitrust Law in Financial Aid Lawsuit
Syracuse, Cornell universities named in class action lawsuit alleging price fixing strategy
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