Following antitrust expiration, merit and athletic scholarships become an option for the Ivy League
The expiration of section 568 of the 1994 Improving America’s Schools Act has raised questions about the Ivy League’s ability to refrain from offering merit-based scholarships.
Madelyn Kumar, Senior Photographer
Marked by selective admissions rates and worldwide prestige, the eight private universities that compose the Ivy League are known as elite hubs of academic excellence. But these characterizations often fail to recognize how the League first developed: as a Division I athletic conference.
The Ivies do not offer merit scholarships of any kind. This also applies to athletic awards, making Yale and its peers the only eight of the 350 total Division I schools to not offer financial awards to exceptional student athletes.
But now, the question of merit scholarships — including athletic and academic awards — is back up in the air after an exemption in the Improving America’s Schools Act of 1994 expired at the end of September. This expiration follows on the heels of a related financial aid lawsuit against 17 of the nation’s most prestigious schools, including six of the eight Ivies.
Now, Ivy League schools cannot jointly decide to withhold merit scholarships from students, including student athletes, without risking legal repercussions.
“I am always in favor of reducing costs of tuition, in any way and as much as possible,” Sophia Kanga ’25 said. “So generally, I support the idea of merit-based aid. But I would never want merit aid to impede the availability of need-based aid.”
The 568 Presidents Group
Though Yale was founded in 1701, the Ivy League did not officially form until 1954.
In 1945 — nine years before the league was founded — the presidents of the eight Ivy League schools signed the first Ivy Group agreement, in which they decided to collectively not offer any athletic scholarships.
“The members of the Group reaffirm their prohibition of athletic scholarships,” the presidents of the eight schools wrote of their football teams, as part of the first Ivy Group Agreement in 1945. “Athletes shall be admitted as students and awarded financial aid only on the basis of the same academic standards and economic need as are applied to all other students.”
Since 1954, the university presidents extended the agreement — which held that athletic proficiency would not affect admissions decisions — to all sports. Under this standard, student athletes must demonstrate the same academic qualifications as all other admitted students.
In the late 1950s, The Overlap Group — which included the eight Ivy Leagues along with the Massachusetts Institute of Technology — jointly agreed that they would not attempt to outbid each other for talented students. They determined a special formula to calculate financial aid offers, different from Congressionally-derived standards that most universities employed at the time.
In 1991, the Department of Justice brought an antitrust suit against The Overlap Group. The Ivies all settled, and MIT followed suit after a district court ruled in the DOJ’s favor.
In 1992, Congress carved out a temporary exemption in antitrust law. Per the exemption, schools were allowed to coordinate financial aid policies if they admitted all students on a “need-blind” basis — which means none of them could consider an applicant’s financial need in their admissions decisions.
In 1994, Congress passed the Improving America’s Schools Act. Section 568 of the act extended and broadened the temporary exemption. Congress has consistently renewed the exemption for the past 28 years. On Sept. 30, however, it expired.
The 568 Presidents Group, initially a collective of 28 universities that now includes 17, developed in the exemption’s name. Following the tradition of The Overlap Group, the 568 Presidents Group members share the same “consensus methodology” to calculate financial aid packages.
In January, legal firms representing five students who attended several schools in the 568 Presidents Group filed a lawsuit arguing that members of the group — which the suit calls the “568 Cartel” — are not truly need-blind. Only nine of the schools, excluding Yale, were initially named as directly practicing need-conscious admissions. Then in an amended complaint from February, all 17 schools were accused of factoring familial financial circumstances into admissions decisions by considering donor gifts in standard admissions as well as financial means in waitlist and transfer admissions.
“Yale’s financial aid policy is 100% compliant with all applicable laws,” wrote Karen Peart, the University’s interim vice president of communications. Peart offered the News the same comment on Jan. 10, when the lawsuit was initially filed.
The plaintiffs essentially accuse the universities of price-fixing. The lawsuit alleges that the Presidents Group colluded to limit competition by offering the same level of financial aid, therefore maintaining artificially high prices. Under this argument, students pay more than they would without university collaboration.
The expiration of the antitrust exemption in section 568 means that the Ivy League can no longer make a group decision on merit aid. Collectively withholding merit scholarships from students — including from student athletes — could lead to legal repercussions.
Speaking of the University’s broader policy not to offer merit-based aid, Peart called the choice to award financial aid based on financial need “the simplest and most egalitarian way” to support undergraduate students.
She added that the Yale Office of Undergraduate Financial Aid remains “committed to its mission of making a Yale College education affordable, for everyone,” and emphasized the University’s core values of affordability, equity and access.
“Yale is proud to be one of only a small handful of American institutions that guarantee to meet the full demonstrated financial need of all students, regardless of citizenship or immigration status,” Peart wrote.
Under the current Yale policy, Peart said Yale is “proud” to meet demonstrated financial aid of all students.
Though Yale meets 100 percent of students’ demonstrated financial need, that calculation is based on collaborative financial aid formulas among the Presidents Group. For some students, potential academic, athletic or other merit scholarships at other schools may offer them more money — and, thus, a lower financial burden — than the Yale-ascribed evaluation of financial need.
When Kanga was going through the college admissions process, she applied to seven schools. She submitted her Yale application through the University’s early action program, as she already knew Yale was her top-choice school.
Kanga received merit scholarships to the value of a couple of thousand dollars from several state schools she had applied to. Nevertheless, for her, Yale remained the ideal choice. The decision was not predicated on the “slight cost reduction” she would have received in merit aid, but instead, about whether to go to a considerably cheaper in-state public school or a more expensive out-of-state private school.
“If I were looking at two comparable schools, and one was giving a few extra thousand, that incentive could make a difference,” Kanga said. “But the difference between Yale and the schools that were offering merit was considerable enough that the smaller scholarships I had received didn’t matter very much in the decision that my family and I made.”
Other undergraduate programs ranked in the top 20 of the U.S. News Rankings, such as at Vanderbilt University and Rice University, offer full merit scholarships. For some students, the comparable level of prestige among Yale and other top-20 schools can mean that the merit scholarships make all the difference.
Kanga described herself as “wholly supportive” of all efforts to reduce tuition, so she is in favor of Yale offering any additional financial aid, including merit scholarships. She expressed reservations, however, regarding how the University would decide who to disseminate merit awards to as well as the possibility that opening up merit offerings would reduce existing need-based awards.
“When the application process is so rigorous, how do you figure out who deserves merit and who doesn’t? And if they have a set amount of aid they’re willing to offer, I wouldn’t want merit-based assistance to reduce the need-based assistance that they offer,” Kanga said. “But even aside from the conversation of merit-based aid, let’s just reduce tuition altogether.”
With need-based financial aid, the final cost of attendance increases in concurrence with a family’s annual income. For some students, this can mean that Yale ends up cheaper than their in-state school. For others, like Kanga, this is not necessarily the case.
At Yale, families in the $200,000 to $250,000 annual income range have a median net cost of $42,964, based on financial aid data for the class of 2023.
“[Yale is] extremely fortunate to attract students with exceptional talents and abilities — along with great academic strength — without needing to add additional enticements in the form of athletic or merit scholarships,” Peart wrote.
Peart noted that all students admitted to Yale College add “meaningful contributions” to Yale and its surrounding communities.
While no hearing was held in advance of the exemption’s September expiry, Senators Marco Rubio (R-FL) and Mike Lee (R-UT) publicly spoke out against the exemption.
“As a result of the Exemption, anticompetitive agreements, often between Ivy League universities, have impeded hundreds of thousands of students’ ability to receive competitive financial awards while faced with skyrocketing education costs,” Rubio and Lee wrote in an August letter.
While the Ivies now cannot make a collective decision, the schools may still individually decide to continue withholding merit or athletic scholarships from students.
Looking more closely at athletic scholarships
The competition argument also applies to athletes. Some Ivy league student athletes noted that the inflation in costs of attendance harms low- and middle-income athletes in particular.
The eight Ivy League universities are the only schools of the 350 in NCAA’s Division I to not offer athletic scholarships. All other Division I and Division II schools offer athletic awards.
A new league-wide decision on athletic scholarships could mirror the NCAA Division 1 policies, according to lawyers Alan Cotler and Robert Litan LAW ’77 GRD ’87, who wrote a July 2021 article addressing the future of the League. At the moment, Division I allocates athletic awards differently based on sports. For headcount sports, a set number of athletes receive full athletic scholarships, while for equivalency sports, coaches distribute available funds among players.
The National College Players Association declared a victory for college athletes after the “unjust exemption” expired in a Sept. 30 press release. In the press release, four Ivy League athletes underscored the importance of athletic awards, with some disclosing the financial burden they faced, despite receiving financial aid from their university.
Brandon Sherrod ’16, a former Yale basketball player, spoke to the News about the potential of athletic awards at the Ivy League and the benefits it would offer current student-athletes.
“I think access to an Ivy League education should be provided to anyone who has the capability of attending,” Sherrod said. “I feel like the cost — however much or however little — can be prohibitive at times, and there certainly is enough money between Yale’s endowment, donors, boosters, societies and alumni to have scholarship opportunities for athletes who fit the bill.”
Sherrod explained that even though he did not suffer financial hardships during his time at Yale, he would have appreciated graduating without any debt. This would have been the case if he had attended a university with athletic awards.
Given Yale’s generous financial aid policies, Sherrod added that one of the only disadvantages of playing in the Ivy League is the “lack of specialized support,” which is usually provided at Division I schools.
“A lot of the time, paying for school is a deterrent because people don’t have the money to pay or would rather have a clean slate when they are done with school and have it for free.” Sherrod said. “ In some cases, for really good players there are incentives — where boosters or other folks might want to help support either you or your family — based on your athletic ability.”
While, for some student athletes — as with other students, like Kanga — total costs can exceed their financial aid awards, these students often value the academic opportunities offered at Ivy League schools and factor them into their ultimate decision to commit.
“There is a certain uniqueness in the education here at Yale that the fact that there was a lack of an athletic scholarship didn’t really influence my decision during my recruitment process,” fencer Helen Tan ’25 and Ivy League representative for the Student-Athlete Advisory Committee told the News. “Therefore, I valued committing to a University that could provide both academic and athletic opportunities that aligned with my aspirations as a student-athlete — a factor that, in my mind at the time, was above all else.”
In an email to the News, women’s golfer Ashley Au ’24 and communications director for the SAAC echoed Tan’s sentiments. Au wrote the lack of athletic award was a “factor” of consideration during her recruiting process, but ultimately she “knew that [being] a student-athlete at Yale was an opportunity I couldn’t pass up, even if I couldn’t get an athletic scholarship to attend.”
Yale Athletics Administration directed requests for comment to Peart. Yale’s Office of Undergraduate Admissions declined due to ongoing litigation. The Ivy League did not respond to requests for comment.