Elite Universities Allegedly Conspired in Tuition Scheme Targeting Divorced Families

Four students walking in a corridor together.

Top universities face a federal lawsuit alleging a tuition price-fixing scheme that disproportionately affects students from divorced families.

At a Glance

  • Over 40 prestigious universities are accused of inflating tuition fees for students with divorced parents
  • The lawsuit claims schools require noncustodial parent information via CSS Profile, reducing financial aid
  • Plaintiffs seek over $5 million in damages and changes to financial aid policies
  • The case could have broader implications for college admissions and pricing models

Lawsuit Targets Elite Universities and College Board

A federal antitrust lawsuit has been filed against more than 40 private colleges, including Ivy League institutions like Harvard, Yale, and Columbia, accusing them of conspiring to inflate tuition costs for students with divorced or separated parents. The lawsuit, filed in Illinois district court, alleges that these universities, in collaboration with the College Board, have implemented a price-fixing mechanism that unfairly reduces financial aid for students from separated families.

The core of the accusation revolves around the use of the CSS Profile, a financial aid application managed by the College Board. Unlike the standard FAFSA form, the CSS Profile requires information from noncustodial parents, potentially diminishing the financial aid package offered to students from divorced households.

Impact on Students and Families

The lawsuit claims that students from divorced families paid an average of $6,200 more annually due to these policies. This significant financial burden has sparked outrage among affected families and education advocates. The plaintiffs, including a Boston University student and a former Cornell University student, argue that the requirement to disclose noncustodial parents’ financial assets unfairly reduces their available financial aid.

“Those affected – mostly college applicants from divorced homes – could never have foreseen that this alleged scheme was in place, and students are left receiving less financial aid than they would in a fair market,” said Steve Berman, one of the lawyers representing the students.

The lawsuit seeks to address what it describes as systemic inequities in the financial aid allocation process, potentially affecting thousands of students across the country.

Legal Implications and Defense

The case hinges on Section 1 of the Sherman Antitrust Act, which prohibits agreements that unreasonably restrain trade. The plaintiffs argue that the noncustodial parent policy represents a collusive agreement to fix prices, while the defendants maintain that schools independently adopted these policies based on financial needs assessments.

Universities named in the lawsuit have begun to respond. New York University, for instance, has stated its intention to vigorously defend its financial aid policies. The College Board, overseeing the CSS Profile, expressed confidence in prevailing against the lawsuit, stating, “we are confident that we will prevail in this action.”

Potential Outcomes and Broader Implications

If successful, this lawsuit could result in significant damages for affected students and lead to substantial changes in financial aid policies across higher education. It may also increase competition among schools in their financial aid offerings, potentially benefiting students from diverse family backgrounds.

“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 Steve Berman, managing partner and co-founder of the law firm Hagens Berman, which is representing the plaintiffs.

This case follows a previous class action against similar institutions over financial aid price-fixing, which resulted in a $284 million settlement. As the legal process unfolds, it could have far-reaching consequences for college admissions practices, pricing models, and the broader landscape of higher education financing in America.

Sources:

  1. Lawsuit accuses 40 top colleges of inflating prices for students with divorced parents
  2. Harvard, other top universities colluded to inflate tuition for students of divorced parents, suit claims
  3. The $6,200 College Conspiracy: How Top Schools Allegedly Colluded to Inflate Tuition