Lawsuit claims US colleges are working together to limit financial aid

Some of the most competitive universities in the United States are facing a trial, accused of violating an important trade law.

Sixteen schools, including Yale University, Notre Dame University, Georgetown University and Columbia University are accused of working together to withhold student financial aid.

The lawsuit concerns the universities that are part of the group of 568 presidents. This is a group of colleges that have been authorized to work together to maintain common financial aid rules.

The lawsuit, however, calls the schools a “cartel.” A cartel has a negative meaning. It is used to describe an illegal group that works together to make more money. Criminal organizations love drugs gang are often called cartels.

Lawyers for five students filed a lawsuit on January 9. The students represent a group of 170,000 people who the suit says have overpaid for college since 2003.

The lawsuit addresses two issues. The first is that the schools unfairly worked together to decide how much money would be offered to students in need.

The second is that schools have not always chosen the best students. The schools chose the students for reasons such as their ability to pay the full price of college.

Universities will often accept the best students and then compile a list of second-place students who can be accepted later. Decisions made about students on this list can be an important part of the trial.

FILE – A Notre Dame monogram flag flies in front of the Word of Life mural on the campus of the University of Notre Dame in South Bend, Indiana, September 28, 2019.

Danielle Douglas-Gabriel writes about higher education for The Washington Post. She said universities that choose students based on their ability to pay may have violated so-called anti-trust law.

“This lawsuit says ‘well, if these schools are engaging rich students the way we show you they are so they are not blind to need and so they violate that law and therefore violating anti-trust laws.

Antitrust laws are regulations that support competition in the marketplace. The laws do not allow companies, or universities in this case, to agree to sell goods at the same price.

Students who filed the case say the universities worked together to “eliminate Price competition.”

The US government has authorized the 568 Presidents Group to work together to create systems to allocate money to needy students. In return, universities agreed to accept students without first examining their ability to pay. The lawsuit claims that the universities violated this agreement.

In this photo from Friday, April 29, 2016, people stand near the entrance gate to Northwestern University in Evanston, Ill. (Chris Walker/Chicago Tribune via AP)

In this photo from Friday, April 29, 2016, people stand near the entrance gate to Northwestern University in Evanston, Ill. (Chris Walker/Chicago Tribune via AP)

Lawyers also say some universities have limited the amount of money given to needy students by keeping places open for the children of wealthy donors or graduates who could pay the full cost. Universities have saved hundreds of millions of dollars.

The lawsuit represents both the students and the parents who paid the tuition.

Spokespersons for several universities said their schools plan to defend themselves. They obey the law, they say.

International students cannot receive financial aid from the US government, but some do receive money from universities who want to have a diverse group of students.

The lawsuit calls for a jury trial, a disbandment of the 568 group, and for the schools to return the money to students who were affected by the universities’ actions.

Peter McDonough is vice president of the American Council of Education. It’s a group that works with 2,000 colleges and universities in the United States In conversation with the New York Times, he said he doesn’t think the schools will turn out to be in violation of the laws. He said he would be surprised to “find out there is a fire where this smoke is being sent today”.

Douglas-Gabriel said she thinks the schools will work hard to get the courts to throw out the lawsuit. His accusations could be very damaging.

Harvard University is not named in the lawsuit because it is not a member of the group of 568 presidents. Harvard did not join the group when it was formed because the school said it wanted to make more money available to students.

I am Dan Friedell

Dan Friedell wrote this story for Learning English with additional reporting from Reuters.

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words in this story

trialnm a process by which a court makes a decision to end a disagreement between people or organizations

gang nm a group of criminals

tuition fees nm money that is paid to a school for the right to study there

to hire v. to pay serious attention to someone or something

law nm a written law that is formally created by a government

eliminate v. remove (something not wanted or needed): get rid of (something)

diverse adj. made up of people or things different from each other

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