Federal Lawsuit Claims Elite Universities Collude To Block Financial Aid

A lawsuit filed this week in federal court alleges that a group of elite universities, including some Ivy League schools, have illegally conspired to limit student access to financial aid improperly.

The complaint alleges that the defendant schools use a shared formula for calculating the financial need of students applying for admission. That need determination is then used to determine an applicant’s prospective financial assistance package.

That collaborative process is permitted under federal law but uses calculation in admission decisions. The lawsuit alleges that the schools use aid determinations in making admission decisions. If proven, that allegation would allow the plaintiffs to claim that universities’ exemptions from federal antitrust law should be removed.

The plaintiffs in the case are all former students of the defendant universities who claim that they were improperly denied financial aid. The lawsuit names 16 universities as defendants, including Yale, Columbia, Georgetown, Brown, Cornell, Dartmouth, and the Massachusetts Institute of Technology.

The plaintiffs claim that the defendant schools use financial need in admissions decisions by giving applicants who are children of wealthy donors an advantage in being granted admission. The case has been filed as schools nationwide are making significant changes in admissions policies. Harvard is one of several schools even deciding to make standardized admissions tests optional.

The new case is the second significant lawsuit filed against Yale recently. A lawsuit filed in November claims that three administrators at the school conspired to “blackball” two students of color from work opportunities in retaliation for their refusal to participate in making false allegations against Yale law professor Amy Chua, who became an enemy of the Yale Administration.

That case names Yale Law Dean Heather Gerken, Associate Dean Ellen Cosgrove, and Diversity Director Yaseen Eldik. That same group of administrators was involved in an unrelated issue at Yale in October when they allegedly applied pressure to a Native American law student to issue an apology to classmates for inviting them to his “trap house.”

A spokesperson for Yale addressed the case filed this week by saying that the university’s financial aid and admission policies are “100 percent” in compliance with federal law.