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Brown University, MIT, Dartmouth named in lawsuit for allegedly conspiring to reduce financial aid

The lawsuit accuses 16 private universities of participating “in a price-fixing cartel” that has “artificially inflated the net price of attendance for students receiving financial aid”

Brown UniversityBarry Chin/Globe Staff/The Boston Globe

PROVIDENCE — Brown University, the Massachusetts Institute of Technology, and Dartmouth College were among 16 schools named in a new lawsuit that claimed it had violated federal antitrust laws and conspired with administrators at other universities to determine financial aid awards for students.

The lawsuit, filed Sunday in a US District Court in Illinois, alleges that these private national universities have “participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition, and that in fact has artificially inflated the net price of attendance for students receiving financial aid.”

The five plaintiffs listed on the lawsuit include former students from Northwestern, Duke, and Vanderbilt universities.

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The suit asked for class-action status that would cover any US citizen or permanent resident who had to attend at any of the named universities between 2003 to present day. These payments could include the cost of tuition, room, and board.

The former students also asked for a permanent injunction against this alleged conspiracy and said in the suit that they would also seek restitution and damages to be determined in court.

Brown was not accused of going against its need-blind admissions policy in the suit, but plaintiffs claimed that because Brown is a member of the 568 Presidents Group, which is an organization of schools that standardized financial aid practices, that the university conspired with other schools that did not maintain need-blind admissions, and that they violated the Improving America’s Schools Act of 1994.

Nine schools — Massachusetts Institute of Technology, Northwestern, Notre Dame, the University of Pennsylvania, Vanderbilt, Columbia, Dartmouth, Duke, and Georgetown — allegedly made admission decisions with regard to the financial circumstances of students and their families, and disfavored those students who needed financial aid, the lawsuit said.

The lawsuit also claims that seven other colleges — Brown, the California Institute of Technology, Chicago University, Cornell, Emory, Rice and Yale — “may or may not have adhered to need-blind admissions policies, but they nonetheless conspired with other Defendants.”

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Under the Improving America’s Schools Act of 1994, universities are allowed to collaborate on financial aid calculation procedures. But universities cannot weigh students’ financial needs when making admission decisions.

The suit alleges that Brown, a private non-profit and member of the Ivy League, has a “generally wealthy and privileged” undergraduate student body. The suit alleges that the median family income of undergraduates is $204,200 and that 19 percent of undergraduates come from the top 1 percent of the country’s income distribution and 70 percent come from the top 20 percent.

“Only 4.1 percent come from the bottom 20 percent of the income distribution,” the suit alleged.

Brown’s endowment reached $6.9 billion after generating a more than 50 percent return in 2021.

“Based on a preliminary review, the complaint against Brown has no merit and Brown is prepared to mount a strong effort to make this clear,” university spokesman Brian Clark said in a statement to the Globe. “Brown is fully committed to making admission decisions for U.S. undergraduate applicants independent of ability to pay tuition, and we meet the full demonstrated financial need of those students who matriculate.

He said Brown has not been served with the lawsuit, and only knows it was named based on media reports. If they are served with the complaint, Clark said the university will “conduct a full review and respond as appropriate through the legal process.”

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Brown joined the 568 Presidents Group in 1998 and left in 2012. The University now uses the College Board’s Institutional Methodology to determine financial contribution that is expected of families when paying tuition.

Only Brown alum who were enrolled at the university from 2004 to 2012 can join the suit.

“In critical respects, elite, private universities like Defendants are gatekeepers to the American Dream. Defendants’ misconduct is therefore particularly egregious because it has narrowed a critical pathway to upward mobility that admission to their institutions represents,” read the suit. “The burden of the 568 Cartel’s overcharges falls in particular on low- and middle-income families struggling to afford the cost of a university education and to achieve success for their children.”


Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her on Twitter @alexagagosz and on Instagram @AlexaGagosz.