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Judge denies motion from 17 major universities, including Duke, to dismiss financial aid collusion lawsuit

<p>The Languages Building on Abele Quad.</p>

The Languages Building on Abele Quad.

A district court judge denied a motion to dismiss a lawsuit against 17 elite universities, including Duke, that claims they illegally colluded to limit financial aid. 

In a January lawsuit, former students alleged that universities engaged in price fixing by relying on a shared method to calculate applicants’ financial needs. In April, Duke filed a joint motion alongside other universities to dismiss the antitrust case, claiming that the plaintiffs’ antitrust claim fails because the collaboration they challenge is “exempt from challenge under the antitrust laws.” 

The universities are members of the “568 Presidents Group,” who have agreed on the “Consensus Approach,” which is “a set of common standards for determining the family's ability to pay for college.” Duke has been a member of the 568 Cartel since 1998. 

The opinion, signed by U.S. District Court Judge Matthew F. Kennelly and released on Monday, stated that the plaintiffs plausibly alleged that “all of the [schools] engage in non-need-blind admissions decisions, and they have cited evidence specific to certain schools as examples.”

The court rejected the schools’ argument that the plaintiffs' claims that accrued before January 9, 2018 are time-barred under the four-year antitrust statute of limitations.

The court also disagreed with the schools’ argument that the plaintiffs did not plausibly allege an antitrust injury or antitrust standing. The court cited the lawsuit’s amended complaint, where the plaintiffs claim that the schools would have competed for students by providing more competitive aid packages if the schools had not adopted the Consensus Approach.

The defendants are directed to answer the amended complaint by no later than Sept. 9. 

Plaintiffs filed a memorandum responding to the schools' motion to dismiss the case on June 10. These former students claimed that if each university allocated an additional 2% of its unrestricted endowment funds annually to financial aid, nine of the 17 universities, including Duke, could provide free tuition to current students on financial aid. The net price at the eight other universities would fall by an average of almost $12,000 annually. 

The U.S. Department of Justice filed a statement of interest for the lawsuit in July.

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.


Katie Tan | Managing Editor

Katie Tan is a Trinity junior and managing editor of The Chronicle's 118th volume.

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