Not a Surprise

When the exemption was given to allow colleges to collude on financial awards in the 1990s, the requirement was that admission was to be. "Need Blind, meaning that they could not favor students with rich parents, even if said parents were big donors.

It comes as no surprise that the elite colleges and institutions have been violating the terms of that exemption for almost as long as it has existed.  (How do you think that Jared Kushner made it into Harvard?)

A filing in an antitrust lawsuit against some of the nation’s top universities alleges the schools overcharged students by $685 million in a “price-fixing” scheme, raising serious questions about their past admission and financial aid policies.

Documents and testimony from officials at Georgetown University, the University of Notre Dame, the University of Pennsylvania, MIT and other elite schools suggest they appeared to favor wealthy applicants despite their stated policy of accepting students without regard for their financial circumstances. That “need-blind” policy allowed the schools to collaborate on financial aid under federal law, but plaintiffs in the case say the colleges violated the statute by considering students’ family income.

Every year, according to a motion filed in federal court Monday night, Georgetown’s then-president would draw up a list of about 80 applicants based on a tracking list that often included information about their parents’ wealth and past donations, but not the applicants’ transcripts, teacher recommendations or personal essays.

“Please Admit,” was often written at the top of the list, the lawsuit contends — and almost all of the applicants were.

Former students accuse 17 elite schools, including most of the Ivy League, of colluding to limit the financial aid packages of working- and middle-class students. The claimed damages of $685 million, which were detailed in the court filing Monday night, would automatically triple to more than $2 billion under U.S. antitrust laws.

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A coalition of highly selective universities, formed in the late 1990s and known as the 568 Presidents Group, collaborated on aid formulas under a 1994 federal antitrust exemption. The exemption applied only if schools engaged in need-blind admissions. But attorneys for the former students say at least nine universities maintained admissions policies that still favored wealthy students in violation of the antitrust exemption, which expired in the fall of 2022.

Meanwhile, according to court documents, the schools’ endowments grew dramatically from a collective total of about $55 billion in 2003 to more than $220 billion in 2022.

Details that emerged in the case Monday included allegations that a former MIT Corporation chair applied pressure for the admission of two wealthy applicants; testimony from a former Harvard official who said the school had not joined the group because it would compel the school to reduce its financial aid awards; and a Vanderbilt University official writing in 2014 that if the statute expired, the school could be forced into a bidding war for students.

The court document contends Notre Dame has admitted that it sometimes granted admission to applicants based on factors that included the donation history, or future capacity, of the applicant’s family.

And at Penn, the suit says, applicants given a special-interest designation — indicating they were from a wealthy or donor family — were more likely to get in. A spokesman for the university said, “Penn’s dean of admissions testified the tag had ‘nothing’ to do with a family’s financial circumstances.” In 2020, Penn left the group to be more generous to students, according to the court filing.

The allegations stem from a class-action lawsuit brought in 2022 by eight former students who said the universities shared a methodology for calculating students’ financial need that reduced the amount of aid the schools provided to low- and middle-income students.

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The group dissolved after the lawsuit was filed.

If the 568 President's group was above board, they would not have dissolved it, and they would not have increased financial aid awards.

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Ted Normand, co-lead attorney for the plaintiffs, said in a statement that rather than competing based on the aid they could afford to distribute, the schools “saved themselves, and cost their students, hundreds of millions of dollars in aid.”

The schools did more than that, they engaged in a fraud on the students conspired to violate federal law.

Frog march administrators out of their offices in handcuffs.