Elite Universities, Including Yale, Duke, and Columbia, Settle in Antitrust Lawsuit

For nearly 25 years, a group of the nation’s most prestigious universities enjoyed legal protection, exempting them from federal antitrust laws when they shared formulas for assessing prospective students’ financial needs. However, a recent court filing revealed that Brown, Columbia, Duke, Emory, and Yale have collectively agreed to pay $104.5 million to settle a lawsuit accusing them of violating the requirement that their admissions processes be “need-blind.”

This legal provision granted antitrust immunity under the condition that cooperating universities maintain a “need-blind” admissions process, meaning they could not consider a student’s wealth when making admissions decisions. The settlements now raise questions about whether these universities, despite touting generous financial aid, did enough to lower tuition costs.

The universities, including Brown, maintained their decisions were made in the best interests of families and within the law. Brown University stated that resolving the case would allow them to focus resources on further expanding generous aid for students.

The settlements followed the University of Chicago’s agreement to pay $13.5 million to settle its part of the case. Other institutions, such as Cornell, Georgetown, Johns Hopkins, M.I.T., and the University of Pennsylvania, remain entangled in the litigation with no trial date set.

The lawsuit targeted 17 schools affiliated with the 568 Presidents Group, named after the legal provision providing antitrust cover. The case alleged that these universities did not adhere to the need-blind admissions mandate, especially in deliberations over wait-listed applicants, making their financial aid protocols illegal.

Vanderbilt University, for instance, publicly stated in 2018 that it reserved “the right to be need-aware when admitting wait-listed students.” The lawsuit contended that by considering need in any context, these universities violated the conditions of their antitrust exemption.

According to the lawsuit, approximately 200,000 students were overcharged over two decades because the 568 Group eliminated competition on cost, artificially inflating the net price of attendance. The antitrust shield expired in 2022, leading to the disbandment of the 568 Group.

While the universities did not admit wrongdoing, the settlements signal potential concerns about their financial aid practices. Critics argue that more aggressive competition over financial aid could have resulted in greater support for students, reducing their college expenses.

The settlements come as the plaintiffs gain an advantage by streamlining the case, making it less complex for a potential trial. The University of Chicago, while initially claiming the suit was without merit, agreed to share records valuable for litigation against other universities.

Other universities have followed suit, settling to limit financial exposure and the risk of damaging revelations during the legal process. Vanderbilt, which is still finalizing its settlement, emphasized its commitment to providing a world-class education to scholars from diverse backgrounds.

Plaintiffs view the planned settlements as advantageous, not only for the financial compensation to students and lawyers but also for narrowing the list of defendants. By reducing the number of defendants, the case becomes more manageable and less complex, potentially expediting resolution.

Financial aid practices at elite universities have faced antitrust scrutiny in the past. In the late 1980s, the Justice Department investigated price-fixing, resulting in settlements as Ivy League schools sought to avoid protracted legal battles. The current case builds on legal arguments supported by the Justice Department, suggesting that schools settling in this civil case may find support for their claims.

As the legal landscape unfolds, these settlements may prompt a reevaluation of financial aid practices at elite universities and their commitment to making higher education more accessible and affordable for students from all backgrounds.