Dartmouth among 40 schools accused in lawsuit of financial aid price-fixing
Oct. 9—A class-action lawsuit filed in Illinois this week against 40 private colleges and universities, including Dartmouth College, and the College Board alleges a price-fixing strategy that boosted the cost of college for some students, particularly those from divorced or separated families.
The lawsuit, filed by the Seattle-based law firm Hagens Berman on Oct. 7 in the U.S. District Court for the Northern District of Illinois, alleges the schools engaged in a concerted action to require noncustodial parents — usually the parent a student did not live with the majority of the previous year — of applicants seeking non-federal financial aid to provide financial information on the College Board's CSS Profile application.
The College Board then requires schools to take that parent's data into consideration for financial aid allotments, regardless of the parent's actual involvement or financial assistance, the lawsuit claims. Without this agreement, the lawsuit states, schools would compete in offering financial aid to enroll top candidates.
The lawsuit claims the alleged price-fixing agreement increased the cost of tuition by approximately $6,200 when compared with top schools not participating in the College Board's agreement.
"The financial burden of college cannot be overstated in today's world, and we believe our antitrust attorneys have uncovered a major influence on the rising cost of higher education," Steve Berman, managing partner and cofounder of Hagens Berman, said in a statement.
"Those affected — mostly college applicants from divorced homes — could never have foreseen that this alleged scheme was in place, and students are left receiving less financial aid than they would in a fair market."
Dartmouth's Office of Communications did not respond Wednesday to a request for comment on the lawsuit.
"Students were told there were no exceptions to the requirement — even if a divorce court order was issued concerning college expenses," the lawsuit states. "Formulas are then used to generate a financial aid offer. The student then ultimately receives an estimate for the family contribution based on what the two parents can contribute, regardless of whether both parents do actually contribute."
The lawsuit details the increase in costs using an example where a student whose parents are divorced is applying to colleges. It draws a distinction between schools that only require the Free Application for Federal Student Aid (FAFSA) and those that also require the College Board's CSS Profile application.
FAFSA calculates
"Consider a FAFSA school that costs $35,000 and a Profile school that costs $75,000," the lawsuit states. "This student's custodial parent is unmarried, earns a modest income and rents a home. Her noncustodial parent earns high income, is remarried to a high earner and owns a home. The FAFSA school counts only the income of the custodial parent. The CSS Profile counts the income of the custodial parent, the noncustodial parent and the stepparent.
"FAFSA calculates the family contribution at $10,000 ... (while) the CSS Profile calculates it at $50,000."
In addition to Dartmouth College, the lawsuit names 39 other higher learning institutions including: Stanford University, Yale University, University of Notre Dame, Harvard University, Massachusetts Institute of Technology, Northeastern University, Tufts University, Worcester Polytechnic Institute, Boston College and Boston University.
