DURHAM — Duke University and 15 other elite private universities are being sued for alleged antitrust violations because of how they collaborate to determine financial aid. The lawsuit claims that ultimately favors wealthy students.
As part of a price-fixing cartel, the universities are alleged to have eliminated competition, reduced the financial aid they award to admitted students and artificially inflated the price of attendance, according to the lawsuit filed in Illinois federal court Sunday.
The schools allegedly overcharged 170,000 students who were eligible for financial aid by “at least hundreds of millions of dollars” over two decades, the suit says.
This lawsuit is part of a wave of legal challenges to college admissions practices across the nation, some of which could be argued in front of the U.S. Supreme Court.
UNC-Chapel Hill has defended its application process throughout one high-profile case that’s centered on affirmative action and race-based admissions.
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In both cases, universities are accused of offering advantages for some students that in turn hurt others.
“Privileging the wealthy and disadvantaging the financially needy are inextricably linked,” the lawsuit says. “They are two sides of the same coin.”
Five former students who attended some of the schools filed this class-action lawsuit, including Sia Henry, who graduated from Duke in 2011.
Brown University, Northwestern, Notre Dame, the University of Pennsylvania, Rice, Vanderbilt and Yale are also named in the suit.
The lawsuit claims the schools collaborated as members of the “568 Presidents Group” that uses a set of common standards for determining a family’s ability to pay for college. The group’s name comes from Section 568 of the Higher Education Act, which permits colleges and universities to collaborate on their financial aid formulas.
Under an exemption to federal antitrust laws, schools are allowed to collaborate as long as they admit students on a need-blind basis. The lawsuit alleges these schools don’t qualify for that exemption because they do weigh candidates’ ability to pay in the admissions process.
At least nine of the schools involved, including Duke, have made admissions decisions “taking into account the financial circumstances of applicants and their families” in processes that favored the wealthy, according to the suit.
The former students are seeking damages and that the schools stop conspiring in their pricing and financial-aid policies.
Duke is specifically accused of “maintaining admissions systems that favor the children of wealthy past or potential future donors.”
During his tenure, former Duke President Richard Brodhead admitted that “it would be naïve to say that any university should pay no attention to a family’s ability to help the university and a family’s ability to donate to Duke was a plus factor” in admissions, according to the lawsuit.
Jean Scott, a former director of undergraduate admissions at Duke, also estimated that a “couple of hundred” applicants a year “received special attention as children of prospective donors,” the lawsuit says. Scott also admitted that some students “got in because they were a high priority” for fundraising.
There “was more of this (fundraising-related) input at Duke than at any other institution I ever worked for,” Scott said, as cited in the lawsuit.