Yale sued for violating antitrust law by considering financial need in admissions
An update to the antitrust suit filed Tuesday accused Yale and all 17 members of the 568 Presidents Group — a group of top universities — of considering financial need in the admissions process.
Yale Daily News
An amended complaint in the 568 Presidents Group lawsuit directly accused Yale of practicing need-conscious admissions, thus violating antitrust law in its collaboration with other schools to determine financial aid formulas.
On Jan. 9, five alumni sued the 568 Presidents Group — 17 elite universities who collaborate in devising financial aid formulas — on the grounds that they breached section 568 of the 1994 Improving America’s Schools Act, which states that such a collaboration can only exist if all members of the group do not consider financial need in their admissions process. In an earlier complaint, only nine members were alleged to consider student need in their admissions practices. The new complaint charges that all 17 schools, including Yale, factored family finances into the process through methods including the consideration of donor gifts and the examination of ability to pay during waitlist and transfer admissions.
“Defendants have … made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid,” the claim reads. “All Defendants, in turn, have conspired to reduce the amount of financial aid they provide to admitted students.”
The News first reported this development on Feb. 8 after sources close to the case revealed that Yale would likely be named in the amended complaint.
The original Jan. 9 lawsuit was filed against 16 of the 568 Presidents Group’s members. Johns Hopkins University, which joined the Group in 2021, was added in the updated suit.
Previously, only Columbia University, Dartmouth College, Duke University, Georgetown University, the Massachusetts Institute of Technology, Northwestern University, Notre Dame University, the University of Pennsylvania and Vanderbilt University had faced need-aware accusations.
Brown University, the California Institute of Technology, the University of Chicago, Cornell University, Emory University, Rice University and Yale were originally named in the suit solely for being members of the group, but must now reckon with the same charges of their 568 Group peers.
“Yale’s financial aid policy is 100% compliant with all applicable laws,” University Spokesperson Karen Peart wrote in a statement to the News.
Penn State Law School in University Park professor John Lopatka said that on the surface, it seems like charging all the schools with practicing need-conscious admissions does not make a difference because every member of the 568 Presidents Group could be implicated if one school violated the exemption. However, Lopatka explained that accusing all the schools of considering need can prevent the defendants from pushing for a separate view of the law.
“A school that did follow a need-blind policy might argue for a different interpretation, claiming that Congress did not intend to withhold the exemption from any school that followed a need-blind admissions policy even if it collaborated with schools that did not,” Lopatka wrote in an email. “That interpretation is not untenable.”
Lopatka speculated that the plaintiffs might have always intended to sue all 17 institutions for examining need but did not have the evidence to do so.
The updated lawsuit also adds information about the universities’ endowments, citing recent endowment growth as proof that the universities in question have the ability to provide more robust financial aid awards. The lawsuit particularly points to Yale’s 1096 percent endowment growth between 1994 and 2021, when the University’s endowment reached $42.3 billion.
“These facts, the amended complaint contends, illustrate that the defendants easily had, and continue to have, the financial means to provide more generous financial aid awards to their students—in particular, for low- and middle-income families struggling to afford the cost of a university education and to achieve success for their children—if the defendants were not colluding,” a news release from the plaintiffs’ legal team read.
The original suit was filed in the Northern District of Illinois federal court.