- Over a dozen top US universities are accused of conspiring to limit students' financial aid.
- A new lawsuit alleges that 16 schools violated antitrust laws and conspired together.
- The suit alleges that the universities have overcharged 170,000 students who received financial aid.
Sixteen universities in the US have been accused of violating antitrust laws and conspiring together to decide how much financial aid should be awarded to students, according to court documents reviewed by Insider.
A lawsuit filed in federal court on Sunday accused the universities of being a "cartel" that "limits competition in financial-aid offers from supposedly competing schools, driving down aid packages and thereby driving up the net price of attendance for aid-eligible students."
The suit alleges that the universities have overcharged 170,000 students who received financial aid by "at least hundreds of millions of dollars."
Named in the suit are Brown University, California Institute of Technology, the University of Chicago, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, Massachusetts Institute of Technology, Northwestern University, the University of Notre Dame, the University of Pennsylvania, Rice University, Vanderbilt University, and Yale University.
Five former undergraduate students who attended Duke, Northwestern, and Vanderbilt filed the suit together in the US District Court for the Northern District of Illinois.
The lawsuit ties back to legislation Congress passed in 1994 that exempts universities that practice need-blind admissions from antitrust laws. In response to the legislation, 28 schools created the 568 Presidents Group in that allows them to work together to determine common standards of financial aid.
The suit, however, alleges that some of the universities, including some involved in the 568 Presidents Group, favored wealthier applicants over those who needed financial aid during the admissions process, thus rejecting the premise of "need-blind" admissions.
In doing so, the schools worked together to "restrain price competition relating to their provision of financial aid for students," the lawsuit alleges.
The former students who filed the lawsuit are now asking the court to determine the filing be maintained as a class-action lawsuit and award a permanent injunction that would ban the schools from "continuing to illegally conspire regarding their pricing and financial-aid policies."
A spokesperson for Brown University told Insider that the complaint against the school has "no merit."
"Brown is fully committed to making admission decisions for US undergraduate applicants independent of ability to pay tuition, and we meet the full demonstrated financial need of those students who matriculate," the spokesperson said. "If we are served with the complaint, we will conduct a full review and respond as appropriate through the legal process."
Northwestern, Cornell, Emory, Rice, Duke, and the University of Pennsylvania declined to comment on the lawsuit. The other universities could not be immediately reached by Insider for comment.