REFILE-40 US colleges defeat antitrust lawsuit over financial aid

By Mike Scarcella

Sept 26 (Reuters) - Forty elite private U.S. universities have convinced a U.S. judge to dismiss a lawsuit that accused them of conspiring to overcharge for tuition by including the assets of noncustodial parents in determining financial aid.

In a written decision released on Thursday, U.S. District Judge Sara Ellis in Illinois said the plaintiffs in the proposed class action had not plausibly alleged any agreement among the defendant schools, including Northwestern, Harvard, Yale, Dartmouth, Cornell and Georgetown.

Ellis dismissed the lawsuit without prejudice, which allows the plaintiffs, a Boston University student and a Cornell alum, to file an amended lawsuit.

Lawyers for the plaintiffs and representatives for Northwestern, Boston University, Harvard, Yale, Dartmouth, Cornell and Georgetown did not immediately respond to requests for comment.

The schools named in the lawsuit had denied any wrongdoing.

Ellis also dismissed allegations against the nonprofit College Board, which developed the financial aid methodology that the schools allegedly use. The College Board did not immediately respond to a request for comment.

The lawsuit, filed last year, alleged the College Board in 2006 “made an intentional push to require schools to agree to the consideration of the income and assets of noncustodial parents when making financial aid determinations.”

The defendant schools all require students to submit the information as part of their aid profiles.

The plaintiffs said students pay thousands of dollars more at schools that consider noncustodial finances in financial aid determinations compared to those schools that do not. The students’ lawyers had said there are at least 20,000 prospective class members.

In seeking dismissal of the case, the defendants in a court filing in January said the collection of noncustodial parent information “is undeniably pertinent to a legitimate objective: the accurate calculation and equitable distribution of need-based financial aid.”

A separate proposed class action pending in federal court in Illinois accused 17 elite U.S. colleges of breaching a pledge not to consider students' finances in making admissions decisions.

That litigation has spurred hundreds of millions of dollars in settlements so far.

The case is Hansen v. Northwestern University, U.S. District Court for the Northern District of Illinois, No. 1:24-cv-09667.

Read more:

Top US colleges sued in class action over ‘early decision’ admissions

Class action lawsuits challenge law and medical school application fees

Settlements near $320 mln in college aid lawsuit after Caltech, Johns Hopkins deals

Top US colleges hit with new antitrust lawsuit over financial aid