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Dartmouth and Others Settle Antitrust Class-Action Lawsuit

By  |  February 25, 2024

Dartmouth College, along with Rice University, Northwestern University, and Vanderbilt University, has agreed to a substantial settlement of $33.75 million in a class-action lawsuit. This lawsuit, initiated by former students, targeted 17 prestigious universities for allegedly conspiring to limit financial aid for students from working- and middle-class families. The settlements from these four universities combined amount to a staggering $166 million.

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    This legal saga began in 2022 when the lawsuit accused the universities, all of which claimed to practice need-blind admissions, of unfairly considering applicants’ financial status in admission decisions. Moreover, the lawsuit claimed that these institutions artificially inflated the cost of attendance for financial aid recipients.

    At the heart of the matter lies the 568 Presidents Group, a consortium of universities granted a federal antitrust exemption. This exemption allowed them to collaborate on financial aid formulas on the condition that they did not factor in a student’s ability to pay when deciding on admissions. However, the dissolution of this group followed the filing of the lawsuit, signaling the seismic impact of the legal action.

    The settlements reached by Dartmouth, Rice, Northwestern, and Vanderbilt, are not isolated incidents. Earlier settlements with six other universities, including the University of Chicago and Ivy League stalwarts like Yale and Columbia, underscore the widespread nature of the allegations. The settlements from these earlier agreements totaled a staggering $284 million.

    What’s particularly noteworthy is the strategy employed by the plaintiffs. The incremental increase in settlement amounts with each successive agreement was designed to exert pressure on the remaining defendants to settle swiftly. This approach seems to be effective, given the substantial sums agreed upon by Dartmouth and its counterparts.

    However, not all universities implicated in the lawsuit have reached settlements. Notable among the holdouts are esteemed institutions like the California Institute of Technology, Cornell University, and the Massachusetts Institute of Technology, among others. Their decisions to continue litigating may prolong the legal battle and potentially lead to further revelations.

    In response to the settlements, representatives from Vanderbilt and Northwestern emphasized that their institutions did not admit liability as part of the agreement. Their priority, they asserted, remains on maintaining their academic focus amidst the legal challenges.

    This unfolding saga has significant implications not only for the universities involved but also for the broader landscape of higher education. It raises questions about fairness, transparency, and the extent of collaboration permitted among institutions in an increasingly competitive academic environment.