FOLLOW US

A group of prestigious universities, including the University of Pennsylvania, Georgetown University, Cornell University, the University of Notre Dame, and the Massachusetts Institute of Technology, have filed a motion to dismiss claims made by former students alleging that these schools conspired to limit financial aid offerings. The motion, filed in an Illinois federal court, argues that the claims are unfounded and that evidence demonstrates these institutions compete fiercely for students, have expanded their financial aid programs, and actively reduced the costs for students.

The universities assert that despite extensive discovery, there is no evidence to support the allegations that they colluded to inflate student tuition costs. They emphasize that the data shows significant variability in the way each institution determined financial need and net prices, as well as their efforts to lower net prices for financial aid recipients.

“The conspiracy theory is refuted by the clear evidence that each defendant employed different methods in calculating student need and pricing, all while reducing net costs for aid recipients,” the motion states.

The lawsuit originated from claims that these universities participated in a group known as the 568 Presidents Group, which aimed to establish common financial aid formulas. The plaintiffs argue that this collaboration resulted in limited financial aid for students. However, the universities contend that the adoption of financial aid principles by various schools, both within and outside the alleged conspiracy, does not constitute evidence of an agreement.

In addition to the dismissal motion, the universities have raised a legal defense citing the Section 568 exemption of the Improving America's Schools Act, which permits universities to collaborate on financial aid as long as they admit students on a need-blind basis. They argue that none of the remaining universities in the case considered financial need during the admissions process and that the claims fall outside the statute of limitations.

“Plaintiffs’ arguments ignore the fact that the 568 Presidents Group’s activities were public and well-documented from its inception, and any alleged harm could have been addressed by the students at the time,” the motion explains.

The five universities also argue that the delay in filing the lawsuit, combined with ongoing legal disputes between the plaintiffs’ attorneys, suggests that the case should not proceed. The plaintiffs, however, are seeking to certify a class action that dates back to 2003, claiming over $685 million in damages for students who allegedly suffered due to the financial aid practices.

Representatives for the universities declined to comment further. The case, Henry et al. v. Brown University et al., is being heard in the U.S. District Court for the Northern District of Illinois (Case No. 1:22-cv-00125).