Forty of the nation’s leading private colleges and universities, including Carnegie Mellon University, are accused in a federal class-action lawsuit of conspiring with the College Board to, in effect, overcharge students.
The suit was filed Monday in Chicago before the U.S. District Court for the Northern District of Illinois.
The lawsuit says the alleged price-fixing agreement increased the cost of tuition by about $6,200 when compared to top schools not participating in the College Board’s agreement.
Specifically, it accuses the defendants of engaging “in a concerted action to require noncustodial parents — typically the parent that the student did not live with most of the time during the past year — of applicants seeking non-federal financial aid to provide financial information,” according to Hagens Berman, the law firm representing the plaintiffs.
“The College Board then requires schools to take this sum into consideration for financial aid allotments, regardless of the parent’s actual involvement or financial assistance,” the law firm said in a statement announcing the suit.
Absent this agreement, the lawsuit states, schools would compete in offering financial aid to enroll top candidates.
“Starting in 2006, College Board made an intentional push to require schools to agree to the consideration of the income and assets of noncustodial parents when making financial aid determinations,” the complaint states.
“Defendants’ concerted action has unlawfully caused the net price of education to increase. Net price is the cost per student of tuition plus room and board, decreased by financial aid,” according to the complaint.
Officials at Carnegie Mellon could not immediately be reached for comment Tuesday. Other Pennsylvania schools named as defendants include Lehigh University, the University of Pennsylvania and Villanova University.
Elsewhere, the defendant list includes the Ivy League schools Harvard, Cornell, Yale, Dartmouth and Brown universities, as well as other elite institutions coast to coast.
The College Board said in a statement, “we are confident that we will prevail in this action,” according to the Reuters news agency. It said lawyers for the students estimate there are at least 20,000 prospective class members who were harmed by the alleged conduct.
It lists two plaintiffs, Maxwell Hansen and Eileen Chang, that it said were harmed by the practice.
According to the 52-page complaint, Hansen attended American University from fall 2021 through fall 2023, later transferring to Boston University where he is currently enrolled.
Hansen received about $15,000 a year in financial aid from American and about $20,000 a year from Boston University. He is paying the rest of his tuition with student loans. His mother is a co-signer; his father has not contributed, according to the suit.
“Hansen paid artificially high prices and continued through present for American University and Boston University because of Defendants’ anticompetitive practices and thereby suffered antitrust injury,” the complaint alleges. “Until recent weeks, Hansen did not know that Defendants had entered into the conspiracy alleged in this Complaint or that the conspiracy caused him to suffer financial harm.”
Eileen Chang attended Cornell. One of her parents is on disability and has a much higher income than her other parent. Cornell’s tuition was about $70,000 a year for her.
She received both federal and nonfederal need-based financial aid.
“Chang emailed Cornell University’s financial aid office to ask if they could remove her noncustodial parent’s income because this parent was on disability and unable to contribute. Chang’s request was denied, and she was told that noncustodial parents are expected to help pay tuition. Chang’s custodial parent took out a Parent Plus loan to pay for the rest of her tuition. She paid artificially high prices to attend Cornell University because of Defendants’ anticompetitive practices and thereby suffered antitrust injury.”
According to Reuters, the plaintiffs and attorneys seek more than $5 million in monetary damages and a court order to end the alleged pricing conspiracy.