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Price-Fixing Lawsuit Filed Against Elite Colleges

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A few months ago, we wrote here, when discussing WashU’s move to need-blind admissions, that colleges don’t really practice admissions that don’t consider your ability to pay. We’ve been saying for years that there are just too many ways for colleges to know that you have money. Your private school. Your zip code. The profession of your parents and the activities you engage in. If you’ve come from a privileged background, colleges will figure that out with or without your FAFSA form. And they’ll use that knowledge to help them make decisions, if not in the initial read, at least in the class-shaping process at the end of the process and in their waitlist decisions. Now, a group of former students at a few elite universities have filed a lawsuit against a group of prestigious colleges alleging just that.

If you’ve come from a privileged background, colleges will figure that out with or without your FAFSA form.

The plaintiffs have named sixteen well-known schools in their lawsuit, including Columbia, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, UPenn, Vanderbilt, Brown, CalTech, UChicago, Cornell, Emory, Rice, and Yale. All of these schools are currently or were part of a private group called the 568 President’s Group, which was created for the express purpose of sharing information about what they collectively believe should constitute “financial need.” The group is named for a carve-out in the Sherman Act, which allows schools to discuss this topic without violating antitrust laws, provided that the schools pursue a need-blind admissions process. The problem, according to the former student plaintiffs, is that these schools don’t actually adhere to need-blind admissions and are therefore in violation of the act. The result, they’ve said, is that upwards of 170,000 students eligible for financial aid were given packages that were stymied by the group’s collective price-fixing. Smartly, the students have used the school’s own words against them in the lawsuit. For example, the brief references an interview with Northwestern’s former President, who once admitted to a school newspaper that he reviewed “hundreds of applications” from wealthy donors. If a school is practicing need-blind admissions, how can it know who is wealthy?

It’s unclear whether the suit will generate any returns for its plaintiffs or change the system in any way. But make no mistake, colleges have many ways of knowing whether you’re likely to be able to pay full fare, even if they are technically need-blind. If you can pay full-price, this is an advantage to use in the college admissions process and you should take advantage of it.

Tim Brennan
January 12, 2022
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