Yale & 15 Other Elite US Universities Accused of Illegally Reducing Student Financial Aid

A lawsuit filed in a federal court in Chicago Monday has accused 16 major universities and colleges in the United States of limiting financial aid for students.

It alleges 16 US universities, including Yale and the Massachusetts Institute of Technology (MIT), broke antitrust laws collaborating to reduce student financial aid by using a shared methodology to determine students’ ability to pay, Erudera.com reports.

The lawsuit which was filed by lawyers of five former students who studied in these universities indicates that universities have overcharged some 170,000 students for almost two decades, although the latter were eligible to receive financial aid.

Under federal antitrust law or Section 568 of the Higher Education Act, these universities are permitted to work jointly on financial aid formulas in case they don’t consider the financial needs of applicants during the admission process.

According to the lawsuit, nine of the accused institutions have been considering some applicants’ financial needs during the admission and favoring children of wealthy families.

“Under a true need-blind admissions system, all students would be admitted without regard to the financial circumstances of the student or student’s family,” the complaint reads.

The 16 higher education institutions accused of limiting student financial aid have been collaborating in the so-called group “568 Presidents”, using a consensus approach to determine students or their parents’ ability to pay for education.

“While conspiring together on a method for awarding financial aid, which raises net tuition prices, defendants also consider the wealth of applicants and their families in making admissions decisions,” Eric Rosen, a partner at one of the firms filing the lawsuit told The Wall Street Journal.

All 16 universities that have been sued are:

• Yale University
• Brown University
• Columbia University
• Cornell University
• Dartmouth University
• Duke University
• Emory University
• Georgetown University
• Rice University
• Vanderbilt University
• Northwestern University
• Notre Dame University
• The University of Chicago
• The University of Pennsylvania
• The Massachusetts Institute of Technology
• The California Institute of Technology

Following the events, Yale University spokesperson Karen Peart told Yale Daily News that the university’s financial aid policy is “100% compliant with all applicable laws.”

Back in 2020, under Trump’s administration, the US Department of Justice (DOJ) sued Yale University for violating national law with its affirmative action practices. However, in early 2021, DOJ under President Joe Biden dropped the discrimination lawsuit against Yale.