The federal lawsuit against Yale and more than a dozen of the country's top universities alleges they violated antitrust laws by sharing a formula to calculate financial need that limited aid offers while favoring admission for wealthy applicants.
The campus of Yale University has trees on it.
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The suit was filed on behalf of five former students who attended three of the schools named in the proposed class-action lawsuit.
The universities are accused of taking part in price fixing by using a shared methodology to determine students' financial need, which the suit argues limited aid by preventing competition to offer more generous aid packages.
According to the filing, universities can work together on determining aid formulas if students are admitted on a need-blind basis.
The suit claims that at least nine of the schools considered the ability of potential students to pay tuition in some admissions and waiting list decisions, which is against the antitrust exemption.
The universities should stop working together to determine financial need because of the lawsuit.
Lawyers told the Wall Street Journal that students who attended the schools using financial aid over the past 18 years could be eligible to join the lawsuit.
The other universities named in the suit are Georgetown University, the California Institute of Technology, the University of Chicago, Columbia University, Cornell University, and the University of Notre Dame.
The key background.
The universities being sued are part of a group of schools that maintain a common financial aid system. According to the Wall Street Journal, the group meets several times a year to discuss formulas. Section 568 of the Improving America's Schools Act (IASA) of 1994 allowed universities to establish a shared financial aid method formula across different schools if financial need not play a role in admission. The lawsuit was filed in the Northern District of Illinois. The partner who is representing the people in the case is a former federal prosecutor who helped convict parents in the case of the Varsity Blues case, in which wealthy families were found to have committed fraud in order to get their children admitted into top universities. The scandal resulted in the imprisonment of two actors, including the one who starred in the movie "Boogie Woogie."
Yale, Georgetown, and other top schools collude to limit student financial aid.
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