Lawsuit Instigated against Thirty Prestigious Institutions of Higher Learning for Premature Admission Decisions
Antitrust Lawsuit Accuses Elite U.S. Universities of Inflating Tuition Fees
A class-action lawsuit has been filed against 32 elite colleges and universities in the U.S. District Court of Massachusetts, accusing them of illegally colluding to inflate tuition costs through their Early Decision (ED) admissions policies.
The lawsuit, which marks the second major antitrust claim against prestigious universities' admission policies in recent years, argues that these schools have an agreement not to compete for students admitted through ED programs. This alleged collusion is said to violate federal antitrust laws, specifically the Sherman Act.
The Early Decision process operates by allowing students to apply early in the admissions cycle to the institution they want to attend. If they are accepted, they agree to enroll and accept the college's financial aid offer, withdrawing their applications to other schools. This binding commitment, according to the plaintiffs, is a misrepresentation, as it is framed as legally binding but no legal mechanism actually enforces this commitment.
The schools, it is claimed, mutually agree not to compete for each other’s ED admits, effectively reducing competition. The plaintiffs argue that this agreement results in increased tuition prices, as schools can raise tuition fees without fearing competition for those students who are less sensitive to tuition costs, often wealthier students willing to pay.
The schools are also accused of sharing admitted student lists, facilitating the enforcement of this no-competition agreement. This information sharing is said to occur through memberships like the Consortium on Financing Higher Education and through common application platforms.
As a result of the Early Decision process, students cannot compare financial aid offers, which leads to schools losing incentive to offer competitive financial aid. This particularly disadvantages students seeking aid by limiting their ability to gauge and compare costs, favouring wealthier students who can pay sticker price.
The lawsuit contends that the colleges’ coordinated Early Decision admissions agreements function as an illegal price-fixing scheme that reduces competition and inflates tuition costs for students.
Several institutions have now settled the lawsuit for a cumulative amount in excess of $300 million. The 32 institutions named as defendants include Amherst College, Barnard College, Bowdoin College, Brown University, Bryn Mawr College, Carleton College, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Haverford College, Johns Hopkins University, Macalester College, Middlebury College, Mount Holyoke College, Northwestern University, Oberlin College, Pomona College, Rice University, Smith College, Swarthmore College, Trinity College, University of Chicago, University of Pennsylvania, University of Rochester, Vanderbilt University, Vassar College, Washington University in St. Louis, Wellesley College, Wesleyan University, and Williams College.
The difference in admission odds can be considerable, with acceptance rates often two to three times higher for early-decision versus regular-admissions applicants at prestigious institutions.
The plaintiffs call early decision a "classic per se violation of the antitrust laws," and Benjamin Brown, managing partner at Cohen Milstein Sellers & Toll, one of the law firms representing the plaintiffs, said early decision admissions result in a lack of choice and negotiation leverage for students. Brown University's Senior Vice President for Communications Cass Cliatt stated that the complaint against the university has no merit, and the university is prepared to mount a strong defense.
[1] https://www.nytimes.com/2022/05/20/us/early-decision-college-antitrust-lawsuit.html [2] https://www.washingtonpost.com/education/2022/05/20/early-decision-college-antitrust-lawsuit/ [3] https://www.wsj.com/articles/early-decision-college-admissions-antitrust-lawsuit-filed-11652882401 [4] https://www.insidehighered.com/quicktakes/2022/05/20/antitrust-lawsuit-filed-against-32-elite-colleges-over-early-decision [5] https://www.cnn.com/2022/05/20/us/early-decision-college-antitrust-lawsuit/index.html
- The class-action lawsuit alleges that elite colleges' Early Decision admissions policies, regulated by agreements like the Consortium on Financing Higher Education and common application platforms, could be contributing to inflated tuition fees and limiting students' education-and-self-development opportunities.
- The antitrust lawsuit against 32 elite universities accuses them of colluding to inflate tuition costs through their Early Decision programs, which potentially impacts the finance sector, as this alleged practice may result in increased costs for students seeking financial aid from these institutions.
