Dartmouth, Rice, Northwestern and Vanderbilt universities have settled a federal class-action lawsuit that accused them of fixing financial aid offers at the same low rates for students of humble means.
The four institutions agreed in court filings Friday to pay a collective $166 million. That comes on top of $118 million that Brown, Columbia, Duke, Emory, Yale and the University of Chicago have already pledged to resolve the same lawsuit.
To date, 10 out of 17 schools accused in the suit have settled out of court for $284 million.
Several former Duke, Northwestern and Vanderbilt students filed it in January 2022. They represent more than 100,000 people estimated to have paid for tuition or room and board at the campuses starting in 2003.
“These ten settlements shine the spotlight on the seven remaining elite universities that have yet to do the right thing and rectify the overcharges to their alumni and students who came from working class and middle class backgrounds,” said Robert D. Gilbert, an attorney representing the plaintiffs.
The schools that have not settled the lawsuit are the University of Pennsylvania, Georgetown, Cornell, Notre Dame, MIT, Caltech and Johns Hopkins.
According to the complaint filed in Illinois, the universities began meeting in a consortium called the 568 Presidents Group in 1998 to agree on “a uniform and lower level of aid” for need-based students.
The suit claims this “wealth favoritism” violated federal antitrust laws and overcharged millions of hardworking families by hundreds of millions of dollars for tuition, room and board.
All of the institutions have strenuously denied the allegations.
Responding to The Washington Times on Monday, Dartmouth, Rice, Northwestern and Vanderbilt repeated those denials in separate statements. They pointed to numbers showing that each has given hundreds of millions of dollars in financial aid to most of their students.
“We maintain the university did not commit any wrongdoing and that the plaintiffs’ claims are baseless,” said Jon Yates, a vice president for global marketing and communications at Northwestern, which has agreed to pay $43.5 million. “However, the university has agreed to settle this case – without admitting liability – so that we can put this matter behind us and focus on Northwestern’s global eminence, excellent teaching, innovative research, and the personal and intellectual growth of our students.”
Vanderbilt has agreed to pay $55 million, the most of any school.
“Though we believe the plaintiffs’ claims are without merit, we have reached a settlement…to maintain our commitment to the privacy of our students and families and keep our focus on providing talented scholars from all social, cultural and economic backgrounds one of the world’s best undergraduate educations,” Vanderbilt said.
The Houston Chronicle reported last month that internal documents showed Rice had set aside $33.75 million for its settlement. Court filings on Friday confirmed that amount.
“The university never conspired to decrease aid for its students,” Rice said.
Dartmouth has agreed to pay the same amount as Rice.
“Dartmouth is unwavering in its commitment to provide financial aid based solely on the individual needs of our students,” the Ivy League institution said.
Last summer, the University of Chicago became the first school to settle the case, offering $13.5 million to keep it out of court.
In January, Yale offered $18.5 million and Emory $18.5 million to settle out of court. Brown pledged $19.5 million, Columbia $24 million and Duke $24 million.
In an August 2022 ruling, U.S. District Judge Matthew F. Kennelly rejected a motion by the universities to dismiss the case.
The judge wrote that the former students “cited specific evidence” that the schools violated their “need-blind” admission policies by quietly basing financial aid awards on students’ ability to pay tuition.
Need-blind schools promise not to factor the ability to pay into their admissions decisions.
“The Court concludes that, regardless of which interpretation of ‘need-blind’ it adopts, the plaintiffs have plausibly alleged that the defendants do not admit all students on a need-blind basis,” wrote Judge Kennelly, a Clinton appointee.
In a statement of interest filed in July 2022, the Justice Department rejected the schools’ claim to be exempt from higher education antitrust laws.
The universities had cited a 1994 federal education law known as Section 568, which allows need-blind private schools to collaborate with their competitors.
That legal exemption expired on Sept. 30, 2022. The 568 Presidents Group website disappeared from the internet shortly after.
Citing Supreme Court precedent, the DOJ statement argued that the universities’ use of a single “consensus methodology” to calculate need-based financial aid “eliminates an important dimension of price competition among schools.”