University of Chicago agrees to pay $13.5 million to students after being accused of participating in a 'price-fixing cartel' with other prestigious schools to limit financial aid

• University of Chicago agreed to a $13.5 million settlement over claims it conspired with top colleges over financial aid.
• Five former students accused 16 top schools in 2022 of working together to limit financial aid packages.

The University of Chicago became the first of 16 top schools to settle claims it engaged in a scheme to keep financial aid packages low.

In January 2022, five former undergraduate students who attended Duke, Northwestern, and Vanderbilt filed a lawsuit against 16 schools including UChicago, Brown, Yale, and Northwestern. The suit targeted a group called the 568 Presidents Group, which allowed schools to work together to determine common standards for disbursing financial aid.

Through that group, the lawsuit accused the schools of having "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," per the original legal filing. The plaintiffs said the schools favored wealthy applicants and "conspired" to reduce financial aid packages, and that they "overcharged over 170,000 financial-aid recipients by at least hundreds of millions of dollars."

The lawsuit targeted an antitrust exemption in Section 568 of the Higher Education Act that allowed schools to collaborate on financial aid formulas if they are "need blind," meaning they do not consider a student's ability to pay in the admissions process. The plaintiffs claimed the schools' admissions were not truly need blind and found ways to take into account the wealth a prospective student would bring to the school.

Last week, UChicago agreed to a $13.5 million settlement that is still awaiting approval from the US District Court for the Northern District of Illinois. The school agreed to make cash payments to students who attended one of the named schools' full-time undergraduate programs, received financial aid from one of the schools, and directly paid for tuition, fees, room, or board that was not fully covered by financial aid within the following categories. The settlement class period is defined as:

• Attended UChicago, Columbia, Cornell, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, Rice, Vanderbilt, and Yale from 2003 through the settlement date
• Attended Brown, Dartmouth, or Emory from 2004 through the settlement date
• Attended Caltech from 2019 through the settlement date
• Attended Johns Hopkins from 2021 through the settlement date.

According to the legal filing on the proposed settlement, there will be an email and media campaign to notify members of the settlement class of this relief. Members will also be able to access a toll-free number to learn more about the settlement, along with a settlement website where they will be able to find important dates and deadlines regarding the cash payments.

"We look forward to putting this matter behind us and continuing to focus our efforts on expanding access to a transformative undergraduate education," the University of Chicago said in a statement.

The settlement now awaits preliminary and final approval from the court. The named schools did not admit any wrongdoing.