Education Julia Conley Justice

Antitrust Suit Alleges 16 Elite Universities Colluded to Limit Financial Aid

Healy Hall at Georgetown University.
Healy Hall at Georgetown University. (Gtownsfs / Wikimedia Commons)(CC BY-SA 3.0)

By Julia Conley / Common Dreams

Sixteen elite universities were sued in federal court late Sunday over an alleged price-fixing scheme in which plaintiffs say the schools formed a “cartel” to limit the amount of financial aid they would each offer to low- and middle-income prospective students—breaking antitrust laws.

Five students who previously attended some of the universities filed the federal lawsuit in Illinois, arguing that in defiance of legislation passed in the 1990s, at least some of the schools take families’ financial needs into account when making admissions decisions. The schools in question are part of a group called the “568 Presidents Group,” which was formed after Ivy League schools were charged with price-fixing in 1991 and is supposed to admit students on a “need-blind” basis.

After the schools were accused of colluding with their competitors to set a formula for determining how much financial aid was needed by families—driving up college costs for all students—Congress passed legislation allowing the schools to collaborate on financial aid methodologies, but only if they did not take into account students’ financial needs when making admissions decisions.

According to the lawsuit filed Sunday, Columbia University, Dartmouth College, Duke University, Georgetown University, the Massachusetts Institute of Technology (MIT), Northwestern University, Notre Dame University, the University of Pennsylvania, and Vanderbilt University all take financial needs into account.

“Nine defendants have thus made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid,” the plaintiffs said in court filings.

Seven other universities—Brown University, the California Institute of Technology, the University of Chicago, Cornell University, Emory University, Rice University, and Yale University—are also part of the 568 Presidents Group and may or may not consider financial needs, the lawsuit says.

Several of the schools—including Yale, Columbia, University of Pennsylvania, Notre Dame, and MIT—have among the largest university endowments in the country, ranging from more than $11 billion to more than $31 billion.

The schools—called the “568 Cartel” in the lawsuit—are accused of giving preferable treatment to the children of wealthy donors. The lawsuit cites an article published in the Daily Northwestern in 2019 in which university president Morton Schapiro acknowledged he personally gets involved in certain admissions decisions. Schapiro told the newspaper that applications of “legacy students [and] children whose family members have donated” to the school reach his desk.

The 568 Presidents Group meets several times a year to discuss its financial aid formula.

“In collectively adopting this methodology, and regularly meeting to implement it jointly, the 568 Cartel has explicitly aimed to reduce or eliminate price competition among its members,” the plaintiffs said in the suit. “As a result of this conspiracy, the net price of attendance for financial-aid recipients at defendants’ schools has been artificially inflated.”

The lawsuit specifically alleges that low- and middle-income students were overcharged by “at least hundreds of millions of dollars.” According to the plaintiffs, about 170,000 former students who attended the schools over the past 18 years could be eligible to join the lawsuit.

Former students from lower- and middle-class backgrounds “might have student debt because of illegal collusion,” tweeted organizer Melissa Byrne.

The lawsuit was filed amid growing fury over the student loan debt crisis in the United States, with more than 43 million people owing an average of nearly $40,000 each. Student debt now totals $1.75 trillion and is growing six times faster than the nation’s economy, according to EducationData.org.

The plaintiffs believe former students deserve compensation from the schools if they “paid tuition, room, or board not completely covered by aid” during the time period covered by the lawsuit, according to the Yale Daily News.

“In critical respects, elite, private universities like defendants are gatekeepers to the American Dream,” the plaintiffs said. “defendants’ misconduct is therefore particularly egregious because it has narrowed a critical pathway to upward mobility that admission to their institutions represents.”

4 comments

  1. Does it really matter that poor youth cannot waste at least four years of their lives, and hundreds of thousands of dollars?

    It was not instated to promote knowledge and better income for all, but to enforce class difference and to perpetuate wealth for the rich, and to delude the common people that they had access to prosperity, thus quieting them.

    Other pioneers were Gilman, Dewey, and Rockefeller. They were all wealthy and were connected to psychology and/or secret societies. Dewey said that the purpose of public school was: “to take an active part in determining the social order of the future …according as the teachers align themselves with the newer forces making for social control of economic forces.”

    John Rockefeller said: “I don’t want a nation of thinkers, I want a nation of workers.” He created the General Education Board (later named The Rockefeller Foundation) in 1903 to dispense Rockefeller funds to education. We are all aware that to qualify for funding, you have to fulfill certain requirements. Rockefeller’s influence must not be underestimated.

    What is the benefit of “higher education?” Modern education creates people who are smart enough to accurately repeat what they are told and follow orders; and dumb enough to think this makes them smarter than everyone else. “Governments don’t want well-informed, well-educated people capable of critical thinking. That is against their interests. They want obedient workers, people who are just smart enough to run the machines and do the paperwork, and just dumb enough to passively accept it.”-George Carlin. That same comedian, George Carlin, also said: “Here’s a bumper sticker I’d like to see…We are the proud parents of a child who has resisted his teacher’s attempts to break his spirit and bend him to the will of his corporate masters.”

    Kahn, Michael Lewis. ANGRY LOUD AND CLEAR TRUTH SECOND IMPROVED EDITION: THE GROWTH AND MECHANISMS OF THE ROMERICAN EMPIRE (pp. 203-204). Kindle Edition.

    education. Higher education costs a pretty penny, and a college loan takes decades to repay, and many are unable to repay it, placing them deep in debt. Occupy Wall Street was a protest of college students and graduates who saw that their college degrees would not guarantee them the employment at high wages as had been promised them.

    The way that the leaders of our country see it, when you trap people in a system of debt, they are going to be unlikely to change the system, they won’t be able to afford the time to think. The way I see it, they should have thought before they bought the lies of the system.

    We are taught the values that we are expected to embrace, in fact, none but the ones desired to be, are made so blatantly infused with every part of our environment. Money, prestige, sex-appeal, and appearances. There is little promoting the concept of altruistic community-service, as such positions as police, social workers, and politicians are called public servants, and we all are aware that the public that they serve are the powerful and wealthy.

    The values of independent-thinking, non-conformity, integrity, courage, and strength are not enforced nor encouraged anywhere. Schools teach from early childhood to not question authority, to accept what you are told without challenging, no matter what your intelligence or knowledge says otherwise.

    You are to perform for excelling grades, for a star, for an “honor” button, for a good report card. You seek for teacher’s approval, to be a favorite, and you do as told to acquire that. They do not teach to be internally motivated, to be independent of other’s opinions of you, to have a secure self-esteem in your own worth. You are always afraid of the “permanent record” they have of you, which does indeed exist. Teachers are taught to use psychology of control, and do as trained to, to collect their pay and pension. Students are made to accept that they must learn of subjects of no use nor interest to them, and to bear it. This allows for a worker who will perform tedious dull work that benefits him in no way, and ensures from youth that he will not rebel.

    Kahn, Michael Lewis. ANGRY LOUD AND CLEAR TRUTH SECOND IMPROVED EDITION: THE GROWTH AND MECHANISMS OF THE ROMERICAN EMPIRE (pp. 204-205). Kindle Edition.

  2. Yeah, those elite Ivy League corrupt schools. Yep, I did amazing things at state colleges, and unlike the guy above, there was no obedience, and the amazing people I worked with and studied under, no, they were not obedient. Journalism and marine sciences, two degrees, with tons of anthropology and writing and liberal arts. The point is that real education is ground truthing, but most people can’t live that life.

    I’ve taught in prisons, military bases, on the streets, Occupy Seattle, in colleges from Texas to Washington and Oregon. I have always fought the takers, the compliant ones, and alas, real education is that k12, where the youth need read gardens, real outdoor education, community immersion, and much more. WOrk with homeless, with others, building things, growing things.

    In the end, when we have these so-called upper tier outfits, you get the Kratocracies we have throughout Western culture.

    Now, those elites are in the chambers of perverted power, money managers, law managers, all part of the Complex. They are the enemy.

    We need more people educated, critical thinkers, tied to community visioning processes, and tied to learning how to tear down the systems of oppression.

    This country, United Snakes of Amerikka (named after an Italian map maker?) is Turtle Island, but the country is a reservation and internment camp, dispicable and duplicitious. As that Kahn guy above alludes to, it is a country of inflammatory disease — parasitic, usury, disaster, predatory, casino capitalism that feed off the poor and the struggling majority with fines, incaceration, evictions, penalties, tickets, bail, bonds, tolls, code violations, fees, charges, foreclosures, and more.

    Those elite universities are engines for that sort of treatment of humanity. A few good ones come out the other end of the elite institutions, but not many.

    More community colleges, more arts and thinking and writing, more drama and theater and movie making and hands on building. Soul Craft as Shop Class.

  3. “Settle your quarrels, come together, understand the reality of our situation, understand that fascism is already here, that people are already dying who could be saved, that generations more will live poor butchered half-lives if you fail to act. Do what must be done, discover your humanity and your love in revolution.”

    George L. Jackson

  4. Nationalize all private schools.

    Bulldoze every private school that has produced a US President.

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