Yale, Duke and Columbia Among Elite Schools to Settle in Price-Fixing Case

For nearly twenty-five years, a group of prestigious universities enjoyed legal immunity from federal antitrust laws as they collaborated on sharing formulas to assess the financial needs of prospective students. This exemption, however, came with a crucial condition: the participating universities’ admissions processes had to be “need-blind,” meaning they couldn’t consider whether a student had the financial means to pay. Recent revelations in a court filing on Tuesday night disclosed that Brown, Columbia, Duke, Emory, and Yale, collectively agreed to pay $104.5 million to settle a lawsuit accusing them of violating this requirement by factoring in financial ability when making admissions decisions for certain applicants.

While the universities did not explicitly admit wrongdoing and resisted claims that their practices negatively impacted students, the settlements raised questions about whether these institutions, which had long touted their commitment to generous financial aid, had done enough to reduce tuition costs. In separate statements, Columbia and Brown denied any wrongdoing, asserting that their financial aid decisions were always in the best interests of students and their families. Brown stated that resolving the case would enable it to focus its resources on expanding generous aid for students.

The settlements with these five universities followed an earlier agreement by the University of Chicago, which agreed to pay $13.5 million to settle its portion of the case. Several other institutions, including Cornell, Georgetown, Johns Hopkins, M.I.T., and the University of Pennsylvania, remain entangled in the litigation with no trial date set.

The lawsuit, targeting 17 schools affiliated with the 568 Presidents Group, alleged that these universities did not adhere to the need-blind admissions mandate when evaluating wait-listed applicants, rendering their financial aid protocols illegal. The case claimed that, over approximately two decades, around 200,000 students were overcharged due to the elimination of cost competition, resulting in artificially inflated net attendance prices.

The antitrust shield that protected these universities expired in 2022, and the 568 Group has disbanded. The lawsuit drew strength from a legal doctrine holding group members responsible for each other’s actions. The case argued that, by considering need in any context, the universities defied the conditions of their antitrust exemption.

Though the University of Chicago initially deemed the suit “without merit,” it eventually settled and shared records valuable for the ongoing litigation against other universities. Some universities, including Vanderbilt, have reached settlements without admitting fault, aiming to limit financial exposure and potential damaging revelations.

Plaintiffs see these settlements as advantageous, not only for the monetary compensation to be distributed among students and lawyers but also for streamlining a complex case by reducing the number of defendants. Emory and Yale are expected to pay $18.5 million each, Brown is settling for $19.5 million, and Columbia and Duke have agreed to pay $24 million each. Rice University separately announced a settlement of almost $34 million.

In their Tuesday filing, plaintiffs’ lawyers revealed that the settlements were pursued individually over time, employing a strategy of increasing settlement amounts to exert pressure on non-settling defendants. The financial aid practices of elite universities have historically faced antitrust scrutiny, with the Justice Department signaling support for some legal arguments underpinning the current civil case. In the late 1980s, the Justice Department initiated an inquiry into price-fixing, resulting in settlements in the 1990s as Ivy League schools sought to avoid protracted legal battles.