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University of Chicago and Northwestern Among Elite Schools Facing Antitrust Litigation Over Admissions Collusion

Natalie Frank, Ph.D.

A judge has rejected the colleges' attempt to have the case alleging that the schools involved falsely claim they admit all students on a need-blind basis dismissed
Northwestern University along with the University of Chicago named in antitrust lawsuit targeting 16 prestigious US universitiesRdsmith4/Wikipedia

The University of Chicago and Northwestern University are among some of the country's most prestigious universities named in a lawsuit alleging they overcharged financial aid students. The lawsuit was filed by five former students in January against 16 universities, who claimed the schools in question overcharged more than 170,000 financial aid students by a total of at least hundreds of millions of dollars.

According to the lawsuit, the schools used a shared equation to calculate the financial requirements of the students and sometime considered financial status in admissions decisions despite claiming to admit students based on a need-blind basis. This was said to be an effort to limit financial aid given out to students. According to the Federal Trade Commission, this method is a form of price fixing which is "almost always illegal."

The lawsuit asserted that these universities have a long standing policy to use the same formula to set financial aid instead of trying to offer the best packages such that students compete for admissions with the strongest students being admitted. The suit also claims that in a secretive practice called management, these universities give preferential treatment to those who are children of potential doners to encourage the families to donate.

The attorneys representing the Universities named in the lawsuit, attempted to have the suit dismissed based on a Section 568 exemption. This is a limited antitrust exemption that applies to schools who are need-blind in their admissions decisions.

Monday, in the US District Court for the Northern District of Illinois, Judge Matthew F. Kennelly ruled that the class action suit can go forward. He stated that the exemption only applies if all of the schools are 100 percent need-blind in their admissions policy and since there was plausible evidence that several of the schools were not fully need blind the exemption couldn't be used.

Along with the University of Chicago and Northwestern University, other schools named in the suit include Yale University, Georgetown University, Brown University, the California Institute of Technology, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, the Massachusetts Institute of Technology, the University of Notre Dame, the University of Pennsylvania, Rice University and Vanderbilt University.

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