Dartmouth College, along with 15 other colleges and universities, has been accused in a class action lawsuit filed on Sunday of creating a “price-fixing cartel” that has been “artificially inflating” the price of attendance for decades.
“We have conducted a multi-year investigation of these practices, which we allege are unlawful, and we plan to vindicate the rights of more than 170,000 financial aid students and their families whom we believe have been overcharged by these elite universities,” an attorney in the case, Robert D. Gilbert, said in a press release regarding the lawsuit on Monday.
The complaint was filed in the United States District Court of Northern District of Illinois Eastern Division, in Chicago, by a group of national law firms — Roche Freedman, Gilbert Litigators & Counselors, Berger Montague and FeganScott.
The 16 defendants named in the complaint are Brown University, California Institute of Technology, University of Chicago, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, Massachusetts Institute Of Technology, Northwestern University, University of Notre Dame, University Of Pennsylvania, Rice University, Vanderbilt University and Yale University.
The lawsuit alleges these institutions are “the country’s most elite, private universities” and have “unlawfully conspired to reduce the amount of financial aid they provide to admitted students, effectively fixing the net price of attendance,” the press release said.
The lawsuit goes on to say that the defendants participate in the cartel claiming the protection of Section 568 of the Improving America’s Schools Act of 1994, the “568 Exemption.”
“This exemption from the antitrust laws, which otherwise prohibit conspiracies among competitors, applies to two or more institutions of higher education at which “all students admitted are admitted on a need-blind basis.” Section 568 defines “on a need-blind basis” to mean “without regard to the financial circumstances of the student involved or the student’s family,” the lawsuit says.
“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. Far from following this practice, at least nine Defendants for many years have favored wealthy applicants in the admissions process. These nine Defendants have thus made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid. All Defendants, in turn, have conspired to reduce the amount of financial aid they provide to admitted students. This conspiracy, which has existed (with slightly varying membership) for many years, thus falls outside the exemption from the antitrust laws.”
In the press release Monday, the group of attorneys said, “the lawsuit seeks to put a halt to these allegedly unlawful activities and to recover damages to make the class members whole.
“Varsity Blues took on the side door of admissions. This case takes on the back door—alleging that, while conspiring together on a method for awarding financial aid, which raises net tuition prices, defendants also favor wealthy applicants in making admissions decisions. The law does not allow them to do both,” said one of the attorneys Eric Rosen, the former federal and state prosecutor who led the Varsity Blues prosecution team and is a current Roche Freedman partner.
Citing the lawsuit as an “ongoing” legal matter, Dartmouth College spokesperson Diana Lawrence declined to comment Wednesday.
Brazer Communications, a marketing firm representing the plaintiffs’ law firms, also declined to comment.