A lawsuit alleging that forty of the best private colleges in the United States conspired to overcharge students for their education has put the schools under scrutiny.
According to the complaint, these colleges defrauded applicants from divorced or separated households by incorporating noncustodial parents’ financial histories when calculating financial assistance packages.
A Boston University student and Cornell University graduate filed a class-action complaint in the United States District Court for the Northern District of Illinois on Monday, targeting Harvard, Cornell, Dartmouth, Brown, and Yale, among dozens of other prestigious colleges.
The complaint, which seeks $5 million in monetary damages and a court order to halt the alleged conspiracy, also names the College Board, a nonprofit that created the financial aid system that the schools allegedly employed.
According to the complaint, the colleges used “a concerted action” to compel an applicant’s noncustodial parents, or the parent with whom a student does not generally live, to furnish financial information in order to be eligible for nonfederal financial aid.
The class-action lawsuit also claims that the College Board mandates institutions to use such information when establishing financial aid allotments, regardless of the noncustodial parent’s actual engagement in or financial contribution to an applicant’s education.
The complaint claims that “students were told there were no exceptions to the requirement—even if a divorce court order was issued concerning college expenses.”
Universities made financial assistance offers based on an applicant’s custodial and noncustodial parents’ financial situations. The complaint asserts that these offers relied on a family contribution from both parents, even if one parent had no intention of contributing to the tuition.
The complaint also asserts that individuals with connections to the colleges that utilized the College Board’s methodology devised it. For example, the complaint claims that the College Board’s current head of the Financial Assistance Assembly Council works at Columbia University and that Harvard’s director of financial assistance formerly chaired the charity.
According to Hagens Berman, the legal firm defending the plaintiffs, the claimed “price-fixing” arrangement raised tuition costs by approximately $6,200 when compared to top institutions that did not use the College Board’s methodology.
Steve Berman, managing partner and co-founder of Hagens Berman, the law firm behind the filing, stated, “We believe our antitrust attorneys have uncovered a major influence on the rising cost of higher education.”
According to Berman, “Those affected—mostly college applicants from divorced homes—could never have foreseen that this alleged scheme was in place, and students end up receiving less financial aid than they would in a fair market.”
The College Board’s campaign to incorporate noncustodial parents’ financial information began in 2006, according to the lawsuit, and never took into account whether that parent would contribute to the student’s education.
Despite receiving and studying the case, the College Board is “confident that we will prevail in this action.”
New York University, which was one of the colleges mentioned, told NBC News that the case had no credibility. “This lawsuit has no merit, and NYU intends to vigorously defend itself, as well as its financial aid policies and procedures,” NYU spokesperson John Beckman stated.
Harvard, Cornell, Columbia, and Georgetown University all informed NBC News that they couldn’t comment on ongoing lawsuits.
Brown, Dartmouth, Yale, Fordham, and the University of Pennsylvania did not return calls for comment.