Sixteen universities, including Duke, engaged in price fixing and unfairly limited aid by relying on a shared method to calculate applicants’ financial needs, according to the January lawsuit brought by former students. Johns Hopkins University was added as the 17th defendant in an amended complaint in February.
The initial lawsuit alleges that by eliminating price competition, the 16 universities have artificially inflated the price of attendance for financial aid recipients. Over almost 20 years, the schools have overcharged 170,000 financial aid recipients by “at least hundreds of millions of dollars.”
But according to the defendants’ motion, the plaintiffs’ antitrust claim fails because the collaboration they challenge is “exempt from challenge under the antitrust laws.”
“Even if that were not the case, Plaintiffs fail to plausibly allege a violation of the Sherman Act, have alleged injuries that are too speculative to satisfy antitrust injury and standing requirements, and have raised claims that are time-barred,” the motion read.
Also known as the 568 Cartel, this group of universities agreed on the “Consensus Approach,” which is “a set of common standards for determining the family's ability to pay for college,” according to the January complaint.
The restraint of interstate trade and commerce is a violation of Section 1 of the Sherman Act, which outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize."
The universities would be immune from violating antitrust laws if they had complied with the 568 Exemption, which “allowed the 568 Cartel members to eliminate incentives to compete if all of the members admitted all students on a need-blind basis,” the January complaint reads. However, at least nine of the schools involved, including Duke, have not qualified for the exemption because they “made admissions decisions taking into account the financial circumstances of applicants and their families, through policies and practices that favored the wealthy.”
The five plaintiffs of the original complaint in January included Sia Henry, who graduated from Duke in 2011.
Duke declined to comment “beyond what is stated in the motion,” per Michael Schoenfeld, vice president for public affairs and government relations.
In addition to Duke, the suit accused Brown University, the California Institute of Technology, the University of Chicago, Columbia University, Cornell University, Dartmouth College, Emory University, Georgetown University, Johns Hopkins University, the Massachusetts Institute of Technology, Northwestern University, Notre Dame University, the University of Pennsylvania, Rice University, Vanderbilt University and Yale University.
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Katie Tan is a Trinity junior and digital strategy director of The Chronicle's 119th volume. She was previously managing editor for Volume 118.