Penn Appeals Financial Aid Lawsuit Decision
The University of Pennsylvania is appealing a judge's decision to allow a lawsuit alleging financial aid price-fixing to proceed to trial. While unrelated to accessibility, the high-profile case highlights the intense legal and regulatory scrutiny currently facing the higher education sector. Such litigation underscores the significant legal and reputational costs associated with non-compliance in any area.
- The lawsuit alleges that for nearly two decades, 17 universities, as members of the "568 Presidents Group," used a shared methodology to calculate financial need, which artificially inflated the net price of attendance for students receiving financial aid. - This collaboration was permissible under a limited antitrust exemption from a 1994 law, which allowed schools to collude on financial aid formulas only if they practiced need-blind admissions. - Plaintiffs claim the universities violated the exemption's terms by favoring wealthy applicants in the admissions process, particularly from the waitlist, and giving special consideration to the children of donors. - The 568 Presidents Group disbanded in November 2022, and the federal antitrust exemption expired in September 2022, ending the legal framework that allowed for the coordinated financial aid calculations. - While Penn continues to fight the lawsuit, twelve of the original seventeen universities have settled, including Brown, Columbia, Duke, Yale, and the University of Chicago, with total settlement funds nearing $320 million. - Penn, Cornell, Georgetown, MIT, and Notre Dame are the remaining defendants appealing to have the case dismissed before it reaches a jury trial. - If the remaining universities are found liable, the plaintiffs are seeking damages that could automatically triple to more than $2 billion under U.S. antitrust laws.
