Dartmouth, Northwestern, Rice and Vanderbilt settle financial aid lawsuit

By Eva Rothenberg, CNN

New York (CNN) — Four more private universities have agreed to settle a lawsuit which alleged they violated antitrust laws in determining financial aid amounts for admitted students, according to court documents filed Friday.

Dartmouth College, and Rice, Vanderbilt and Northwestern universities agreed to pay a total of $166 million to settle claims filed in a 2022 class action lawsuit alleging the schools colluded on the amount of financial aid awarded to students, while favoring applicants from wealthier families. The settlement comes after Yale, Columbia, Duke, Brown and Emory agreed to pay a combined $104.5 million to settle their portions of the case last month. In 2022, the University of Chicago agreed to settle for $13.5 million.

The agreement is awaiting preliminary approval from a federal judge. If approved, the total settlement amount in this case will now be $284 million.

US antitrust law allows higher education institutions to work together to come up with financial aid awards for applicants as long as they do not weigh any student’s ability to pay tuition when considering whether to accept them, a practice referred to as “need-blind” admission.

But attorneys for the eight former students who brought the lawsuit forward say 17 of the top universities in the country either failed to adhere to need-blind admission or colluded with such schools in setting their financial aid awards, which has reduced price competition among the schools and disfavored students who need financial aid, according to court documents.

CNN reached out to the four schools for comment.

“We are committed to removing financial barriers for our students … We maintain the University did not commit any wrongdoing and that the plaintiffs’ claims are baseless,” a Northwestern spokesperson said in a statement. “However, the University has agreed to settle this case — without admitting liability — so that we can put this matter behind us and focus on Northwestern’s global eminence, excellent teaching, innovative research, and the personal and intellectual growth of our students.”

A spokesperson for Dartmouth said the school “has a long history of making education affordable for generations of students and their families,” adding the school has spent more than a billion dollars in financial aid since 2014. “Nearly 15% of this year’s first-year class is attending Dartmouth without responsibility for paying tuition, housing, meals and many other fees, and more than half of the class receives some form of financial aid. Dartmouth is unwavering in its commitment to provide financial aid based solely on the individual needs of our students.”

A Vanderbilt spokesperson told CNN in a statement: “Though we believe the plaintiffs’ claims are without merit, we have reached a settlement in order to maintain our commitment to the privacy of our students and families and keep our focus on providing talented scholars from all social, cultural and economic backgrounds one of the world’s best undergraduate educations.”

Rice University did not respond to CNN’s request for comment.

“These 10 settlements shine the spotlight on the seven remaining elite universities that have yet to do the right thing and rectify the overcharges to their alumni and students who came from working class and middle class backgrounds,” said Robert Gilbert, one of the lead attorneys representing the former students.

The ratcheting pressure is reflected in the individual amounts each school has settled for. Since Chicago’s settlement, which was finalized in September, the settlement costs have grown steadily steeper. The universities reaching an agreement last month are paying between $18.5 million and $24 million. Meanwhile, Dartmouth, Rice, Vanderbilt and Northwestern’s settlements range from $33.75 million to $55 million each.

The seven remaining universities that have not settled include the University of Pennsylvania, along with Notre Dame, Georgetown, Cornell, Johns Hopkins, the Massachusetts Institute of Technology and the California Institute of Technology.

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