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On Sunday, a lawsuit was filed in Illinois federal court against 16 prestigious universities on behalf of five former college students who believe the schools overcharged more than 170,000 financial aid recipients by “at least hundreds of millions of dollars.”
Some of the country’s most exclusive universities were accused: Brown University, the California Institute of Technology, the University of Chicago, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, the Massachusetts Institute of Technology, the University of Notre Dame, Northwestern University, the University of Pennsylvania, Rice University, Vanderbilt University and Yale University.
The suit alleges that the schools use a shared methodology to calculate applicants’ financial needs, that these schools occasionally consider financial status in the admissions process and that this system amounts to price-fixing, which is “almost always illegal,” according to the Federal Trade Commission.
“Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms,” reads the FTC’s website. “When competitors agree to restrict competition, the result is often higher prices.”
CNBC Make It reached out to all of the universities but most declined to comment. Read more.
