A U.S. District judge in Chicago on Monday gave preliminary approval to more than $104 million in settlements among top universities and students who have accused the schools of favoring the wealthy for admission.
The lawsuit was filed in 2022 against 16 major U.S. colleges, including Yale, Georgetown, Northwestern and other prestigious schools, for allegedly engaging in price fixing and limiting student financial aid by using a methodology shared among the schools to calculate financial need for an applicant.
U.S. District Judge Matthew Kennelly in the Northern District of Illinois said in a hearing that the previous agreement among the students and Yale, Columbia, Brown and other schools was reasonable and can move forward.
The case is continuing against 10 other schools, including the Massachusetts Institute of Technology, Dartmouth College and Georgetown University, Reuters first reported.
While schools are allowed to collaborate on their financial aid formulas under federal law, they can only do so if they don’t consider the student’s financial need when it comes to admissions. The lawsuit challenges this, arguing that the universities did take into consideration if a student would be able to pay tuition.
Yale and Emory said they would each pay $18.5 million to settle. Brown agreed to $19.5 million and Columbia and Duke both said they would pay $24 million, Reuters reported. The average payout to members of the class is expected to be $750.
According to the outlet, a lawyer for the students, Eric Cramer, said the students are negotiating with some schools while preparing for trial against others. He said it was in the students’ best interest to resolve the cases with the right amount of money and to pursue further legal action against the schools who refuse to settle.
In 1994, a piece of legislation exempted schools considered need-blind and allowed them to create common guidelines for how to assess an applicant’s financial need. The law essentially allowed schools to bypass bidding wars for low-income students but did not allow them to favor wealthier applicants that would not need as much financial aid.
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