The University of Chicago has agreed to pay $13.5 million to current and former students as part of an antitrust lawsuit brought against 17 prestigious schools, claiming the institutions artificially inflated tuition prices by keeping financial aid packages low.
The settlement, which was announced Monday, still needs to be approved by the U.S. District Court for the Northern District of Illinois. Under the settlement, the university has not admitted to any wrongdoing and officials maintain they’ve done nothing wrong.
The University of Chicago is the first of the universities to settle in the lawsuit, which was brought against them by five former university students in January of 2022.
The other institutions 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, Rice University, University of Pennsylvania, Vanderbilt University and Yale University.
Per the suit, the institutions were a part of the 568 Presidents Group, an organization made up of universities that allegedly met frequently to swap information about financial aid practices and create a method to assess need-based aid.
The students accused them of violating Section 568 of the Improving America’s Schools Act of 1994, which granted universities an exemption to antitrust laws by enabling them to admit students on a need-blind basis, meaning they wouldn’t consider their financial backgrounds when deciding whether to accept them.
However, the suit accuses the institutions of conspiring to favor wealthy applicants during the admissions process, thereby disfavoring students who needed financial aid. The process was also implemented when deciding whether to admit students onto waitlists, the suit states.
The suit called the universities “gatekeepers of the American dream.”
The five former students are suing the universities on behalf of themselves and others in similar situations. They claim the actions taken by the schools suppressed competition, artificially reduced financial aid and inflated the price to attend the universities.
In addition, the suit alleges that the institutions overcharged approximately 170,000 financial aid recipients by hundreds of millions of dollars.
Separate from the financial payout, the University of Chicago will supply the former students and their attorneys with evidence to assist their litigation efforts against the other institutions.
A hearing will be scheduled for a later date to approve the proposed settlement. Part of the suit seeks to compensate U.S. citizens or permanent residents, or those who purchased tuition or room and board on their behalf, who’ve enrolled in one or more of the universities’ full-time undergraduate programs.
