College students are beginning to receive payments from a $284 million settlement related to allegations of financial aid price-fixing by 17 prestigious American universities. Electronic payments were sent out Monday, with physical checks scheduled for mailing by Friday.
A federal class-action lawsuit filed in 2022 accused the institutions of operating as a "price-fixing cartel" that reduced financial aid packages, thereby overcharging students by "at least hundreds of millions of dollars."
Ten universities have so far agreed to settlement terms: the University of Chicago, Emory University, Yale University, Brown University, Columbia University, Duke University, Dartmouth College, Rice University, Northwestern University, and Vanderbilt University.
The other defendants named in the lawsuit include the California Institute of Technology, Cornell University, Georgetown University, Johns Hopkins University, Massachusetts Institute of Technology, University of Notre Dame, and the University of Pennsylvania. None of the institutions have admitted to any wrongdoing.
Current and former students who attended any of the 17 named universities are eligible for an average payment of $2,000. The final amount for each claimant depends on factors such as the number of claims submitted, the net tuition cost at the attended university, and the duration of enrollment. The deadline to file a claim has passed.
Eligible attendance periods varied by institution. For example, students at Chicago, Columbia, Cornell, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, Rice, Vanderbilt, and Yale were eligible if enrolled starting in the fall term of 2003. Brown, Dartmouth, and Emory students were eligible if enrolled starting in the fall term of 2004. Caltech students were eligible from the fall term of 2019, and Johns Hopkins students from the fall term of 2021.
According to the lawsuit's complaint, the universities allegedly convened at least annually to discuss financial aid calculations. This practice, the suit contended, resulted in students receiving less financial aid than they would have if the schools had not colluded. The lawsuit cited Section 568 of the Improving America’s Schools Act of 1994, which permits universities to collaborate on financial aid formulas, provided they do not consider applicants' financial need in admission decisions.