But then they are also open about things like GPA, SAT/ACT scores, legacy, and other college admission characteristics that have some correlation to FA need.
Right, and Goldenâs The Price of Admission came out in 2005. So, laches here⊠Applicants should have been aware of what they were getting into and knowingly entered into itâŠ
Yes they have and well since before the 1994 exemption. I think defining âneed blindâ so narrowly is a typical plaintiffsâ âgotchaâ to create liability by using a relatively tortured definition of some statutory provision.
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I have not read the lawsuit, but my thought is that the critical issue will be in proving harm through unfairness caused by price fixing.
In simple terms, plaintiffs need to show actual damages caused by an illegal practice.
I think that a reasonable argument might assert that plaintiffs were in fact helpedânot harmedâby such practices.
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My H said exactly the same thing when he heard about the suit.
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Just reading the WSJ article, the basis of liability is that the schools collaborate on their financial aid methodology/formulas and are allowed to do this based on a specified exemption (Section 568 of the Improving Americaâs Schools Act of 1994). In fact there is an organization of schools set up for such collaboration. https://www.568group.org/home/?q=node/12 A condition of the exemption is that schools must be âneed blindâ. If they are need blind, then there is no liability and we donât get to the question of damages.
The plaintiffs clearly are going for class certification, which is where their payoff is, probably in a hoped for extorted settlement. âLawyers say more than 170,000 former undergraduate students who received partial financial aid at those schools going back up to 18 years could be eligible to join the suit as plaintiffs.â (WSJ article quote)
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Plaintiffs need to prove at least $1 of damages in order to be eligible for an award based on an allegation of an anti-trust violation (unless a statute specifies otherwise).
Plaintiffs may have received more financial aid if others were denied due to financial need. This means that plaintiffs might lack standing to bring a legal action in federal court.
P.S. Would be interesting to know more about each plaintiff.
Was any plaintiff wait-listed and subsequently denied admission allegedly due to need for financial aid ?
It appears that all 5 plaintiffs were admitted to one of the defendant schools. Is their âcomplaintâ that they did not receive enough financial aid ?
Do the plaintiffs have standing to make allegations on behalf of wait-listed and denied applicants ?
Were any of the plaintiffs harmed ?
Do the plaintiffs have standing to sue without any provable damages resulting from the alleged improper practice ?
A reminder that material placed in a lawsuit, or in reporting about a lawsuit, doesnât mean itâs factually true.
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Some background on the original 1991 consent decree:
IVY LEAGUE SCHOOLS AGREE TO HALT COLLABORATION ON FINANCIAL AID - The Washington Post
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On what basis do the plaintiffs consider these schools taking into account applicantsâ financial circumstances in admissions? If itâs based on international applicants, then MIT shouldnât be on the first list of 9 schools (and the schools, other than Yale, on the second list should be). If itâs based on âdonor preferencesâ, then 6 of the 7 schools (other than Caltech) shouldnât be on the second list (and MIT should be on the second list instead). Iâm not sure the plaintiffsâ attorneys have done their homework.
Itâs not really clear. Some of the schoolsâ are likely need aware when making waitist offers, in addition to the schools that are need aware for internationals (so excluding HYP, MIT and Amherst, although Amherst isnât named in the suit).
I agree with the poster who said it will all come down to the definition of need blind.
For example, is it ok that the admission readers know the applicant applied for FA (even though they wouldnât know if an applicant who applies for aid actually qualifies for aid, or how much they would receive)? Is it ok to use the numerous income proxy factors in the admissions decision and/or predictive analytic models?
Hereâs the lawsuit: Case: 1:22-cv-00125.pdf - Google Drive
The part Iâve never understood is why itâs okay for these schools to match the offers from other schools. If a school has set up its FA formula (knowing what the other schools are using), and accepts a student and makes a FA offer based on that formula, why should the student get to say âWell YALE gave me this offer so you should give me that much.â So what? If it is a fair offer made based on the formula, should it matter that Princeton offered more, or that another student didnât get any other peer offers so is stuck with the offer the school originally made?
Thatâs when the games start. The school should set its tuition and fees, set the formula for FA, and then everyone has to live with it (not talking about if a genuine error was made or if circumstances change like a job loss). If a student gets a better offer from Yale or Brown, good for him, and he should go to Yale or Brown.
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I have read the lawsuit. While I do need to reread the lawsuit, my questions remain:
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What are the damages to these 5 plaintiffs ?
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How do these 5 plaintiffs have standing to sue on behalf of wait-listed students who were never admitted ?
Overall, my initial thought is that the lawsuit is seeking permission from the court to engage in a fishing expedition for additional potential plaintiffs who actually suffered provable harm (such as not being admitted from a wait list due to financial need / inability to pay).
I know very little about antitrust law, but this seems to be a very weak attempt to generate court ordered attorneys fees.
What harm has any of the 5 plaintiffs suffered ? More importantly, what provable harm has any of the 5 plaintiffs suffered ?
My impression is that applicants in need of financial aidâincluding the 5 plaintiffsâwere more likely helped by the current system than harmed by it.
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Alternatively, it is where the games end, if the schools feel they have to match an offer from another school. There shouldnât be any outliers to begin with, if they are using the same formula. The ability to match makes it so there is no point in offering a kid more FA (eg trying to woo a kid with money that is dressed up as FA but is really merit).
I am having a hard time understanding how a standardized method for determining need creates harm and collusion when the whole point of FA is to provide access to those who canât afford college. Especially since the sticker price non-FA students pay is inflated to compensate some of the FA and families who make more than $200k can get get FA. Is the argument that the schools should be more generous than they are already? That they should allow bidding wars?
If what they are saying is that FA shouldnât be a consideration re: getting off the waitlist, I expect there are good institutional reasons for allowing wl admits to be treated differently.
If what they are saying is that big donor admits are illegal, that doesnât make much sense to me. That has nothing to do with who gets FA and how much. No one is entitled to FA, but if they are giving it out, I want the schools to at least have a similar way of assessing it.
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The lawsuit has many deficiencies as plead.
Seems like an attempt to get the courtâs blessing to go on a fishing expedition through the discovery process in order to find potential plaintiffs who may have actually suffered provable harm.
One weakness is in attempting to define these 16 National Universities as the only elite institutions of higher education capable of giving students an entree to the best careers. In order to try to define the entire marketplace as these 16 universities, the lawsuit trashes the most highly ranked LACs & highly ranked (top 25 National Universities as determined by US News) state supported universities.
The lawsuit never offers any specific harm suffered by any of the plaintiffs; it just speculates that in a different unspecified system that the plaintiffs would have received more financial aid & would have been charged less by the universities for tuition and, presumably, for other costs of attendance.
Everything alleged in this lawsuit as harm is speculative conjecture.
The lawsuit asserts that all of the typical tests & standards for initiating and advancing an antitrust action are not necessary or magically satisfied.
It will be interesting to read the answer or answers to this lawsuit filed by the defendants.
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In order to buy-in to this lawsuit, it seems that a court would have to agree that these 16 National Universities form an entire ârelevant marketplaceâ. This ignores many elite colleges & universities such as Harvard, Princeton, Michigan, Berkeley, WashUStL, all LACs, etc. including the option to attend any of the other thousands of colleges & universities in the country.
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This is from The Boston Globe:
â One top school that isnât among the defendants is Harvard University. It is among the universities that have declined to participate in the so-called 568 Cartel because it would limit the financial aid they could provide, according to the suit.
In 2008, Harvardâs director of financial aid at the time, Sally Donahue, said the school never joined the group because its financial aid formula would have yielded packages smaller than what it wanted to award, according the the complaint.â
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Admissions folks from 2 other schools (Yale & Dartmouthâif I recall correctly) also made similar statements according to allegations in the lawsuit. But, this does not prove harm to any of the 5 plaintiffs & may not help the case achieve class action status. Such responses may show a preference for awarding larger financial packages to fewer studentsâalthough the cases of Harvard & Princeton are easily distinguishable from the other 16 schools due to their mammoth endowments (overall for Harvard & per student for Princeton).
Also, the formula may allow or achieve other positive results in the financial aid process. Schools with lower endowments may be offering more financial aid to individuals under the formula.
Harvard is a bad example due to its massive wealth that is unmatched by any other university just as Princetonâs endowment per student is unmatched by any other school. Both Harvard & Princeton are not members of this group of 16 universities.
The answer or answers filed in response to this lawsuit are almost certain to present a very different picture. Plaintiffs are, obviously, hoping to satisfy a per se standard of review which is unlikely.
Just because a school could award more financial aid to the point of depleting its endowment does not make it a crime for the school to award less by acting in a fiscally responsible manner.
Lacking in this lawsuit is any showing that any of the 16 schools is actually awarding lower amounts or percentages of financial aid due to use of the financial aid formula used by the group of 16 schools.
What if adhering to the formula resulted in a school awarding higher levels of financial aid than it did prior to adhering to the formula ?
What if adhering to the formula enabled or resulted in schools deciding to award financial aid without loans such as Northwestern University has done ?
What if belonging to the group of 16 heightened awareness of financial aid packages among the schools & applicants to the point that significant improvements were made to the financial aid process which benefited financial aid recipients & their families ?
What if these 16 schools saw a meaningful increase in applications from applicants from lower income families ?
The answer(s) filed should reveal increased benefits to those accepted students in need of financial aid.
Also, it may be wise for the 16 defendants to file separate answers to show the dramatic increased generosity in specific fashion school by school.
Again, in short, where is the harm ? Who was damaged by schools adhering to the formula ?
What if wealthy applicants did not get an offer of admission either from the wait list or in RD, EA, or ED rounds ? Were wealthy applicants harmed by this intense focus on awarding financial aid by this group of 16 schools ?
Did applicants to these 16 schools apply elsewhere ? Were their financial aid packages better, worse, or the same from non-group of 16 schools ?
Focusing on just 16 schools out of several thousand four year universities does not constitute a meaningful âmarketplaceâ for purposes of antitrust allegations. Why not just go to another school ?
Should the courts punish these 16 elite universities for awarding generous financial aid to financially needy applicants ? What would this lead to ?
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I donât think that the question is can they show damages to the 5 plaintiffs, it is are the universities operating in the safe harbor provision correctly. Since they are engaging in an activity that would be illegal without the safe harbor, if they are not following the safe harbor rules, it is easy to show liability.