Judge Tosses Antitrust Lawsuit Against 40 Colleges Accused Of Overcharging Students

Case Overview: A judge dismissed an antitrust lawsuit accusing 40 elite colleges of colluding to inflate tuition, though plaintiffs may refile.

Consumers Affected: Students and families applying for financial aid at private universities.

Court: U.S. District Court for the Northern District of Illinois

Forty of the nation’s most prestigious private universities, including Harvard, Yale, Northwestern, and Georgetown, won a major victory this week when a federal judge dismissed a lawsuit accusing them of conspiring to overcharge students for tuition through financial aid practices. 

The ruling found that the plaintiffs, two students, failed to show the schools actually agreed to fix prices, Reuters reports. However, the dismissal was without prejudice, meaning the students who brought the case could try again.

Students Accused Top Colleges of Coordinating to Inflate Tuition

The lawsuit was filed by a Boston University student and a Cornell graduate, who say the schools colluded with the College Board to inflate tuition costs.

According to the complaint, the schools required applicants to submit detailed financial information from noncustodial parents, even when those parents provided no tuition support. 

This practice, the plaintiffs allege, reduced competition and forced students to pay thousands more each year. They argue that without such coordination, colleges might have offered more generous aid packages to attract top candidates.

Both plaintiffs cite personal examples. One said they received limited aid because their father refused to contribute to their education. The other said Cornell factored in their disabled father’s higher income, even though he was unable to help with tuition.

Together, they argued, this system saddled families with crushing loans while shielding schools from market pressure.

Judge Dismisses Case for Lack of Evidence, Leaves Room to Refile

U.S. District Judge Sara Ellis in Illinois found that while the plaintiffs showed the schools acted in parallel, they did not plausibly allege an actual agreement to collude. Without more details on when and how each school adopted the disputed policy, the complaint could not stand, she ruled. 

Ellis also dismissed the claims against the College Board, which created the widely used CSS Profile form, and released dozens of universities from the case for lack of jurisdiction.

The ruling does not end the matter entirely. Because the complaint was dismissed without prejudice, the plaintiffs can attempt to amend and refile.

This isn’t the only time elite universities have been accused of playing fast and loose with antitrust law. A separate lawsuit filed in Boston takes aim at 30 top schools, including Columbia, Duke, and the University of Pennsylvania, along with the Common Application and the Coalition App. That case claims the schools used binding early decision policies to corner the market, locking in students and driving up costs across the board.

Case Details

• Lawsuit: Hansen v. Northwestern University, et al.
• Case Number: 1:24-cv-09667
• Court: U.S. District Court for the Northern District of Illinois

Did you apply for or receive financial aid at a private university? What was your experience with tuition and aid policies? Share in the comments.