Affluent Universities Settle Antitrust Lawsuit Over Financial Aid Collusion

Johns Hopkins and Caltech settled a federal antitrust lawsuit, paying $35.2 million combined over illegal financial aid collusion with other elite universities.

Johns Hopkins University and the California Institute of Technology have agreed to settlements in a federal antitrust lawsuit that accused a consortium of 17 wealthy colleges, known as the 568 Presidents Group, of colluding unlawfully on financial aid calculations and overcharging students for years.

Settlement Details

In a recent announcement late Friday, Johns Hopkins disclosed that it would pay $18.5 million to settle the case, while Caltech has settled for $16.7 million.

Both institutions became part of the 568 Presidents Group recently; Johns Hopkins joined in November 2021, and Caltech became a member in 2019.

Class Action Background

The class action lawsuit, which began in January 2022, originally targeted Caltech along with other prestigious universities such as Brown, Columbia, Cornell, Duke, Emory, Georgetown, Northwestern, Rice, Vanderbilt, Yale, Dartmouth College, as well as the Massachusetts Institute of Technology and the Universities of Chicago, Notre Dame, and Pennsylvania.

Johns Hopkins was added to the lawsuit in March 2022.

Antitrust Claims and Group History

So far, 12 of the 17 colleges implicated in the case have reached settlements, amounting to nearly $320 million collectively.

Vanderbilt University holds the largest settlement at $55 million.

Five defendants, including Cornell, Georgetown, MIT, Notre Dame, and Penn, have denied any wrongdoing and continue to fight the antitrust claims in court.

The group is named after a provision in federal law that enabled its members to discuss financial aid processes without breaching antitrust regulations, thanks to their need-blind admissions policies.

This exemption was put into place by Congress after a 1991 scandal involving price-fixing among Ivy League schools and MIT.

However, that legal protection expired in 2022, leading to the group’s dissolution.

The plaintiffs argued that these universities considered applicants’ financial backgrounds during admissions, often giving preference to those with wealthier families or connections from past donations.

They pointed out that some less academically qualified students were accepted due to their placement on “special interest lists,” deviating from the criteria applied to other successful candidates.

Source: Insidehighered