Dozens of elite universities — including Harvard, Columbia and New York University — allegedly colluded in a price-fixing scheme that has increased the cost of tuition for students with divorced or separated parents, according to a federal lawsuit.
The proposed class-action lawsuit – filed by a Boston University student and Cornell University alum – targets the College Board, the nonprofit which developed the financial aid methodology that the 40 major schools, also named in the complaint, allegedly use.
According to the lawsuit, the College Board conspired with the schools to craft a policy that would take into account the financials and assets of noncustodial parents as justification to deny students scholarships.
Having both parents fill out the CSS Profile allowed the schools to artificially inflate the sum that the family could afford to pay — even if the family has just one breadwinner, it was alleged.
The CSS Profile, which has become the go-to for wealthy private colleges, is considered more comprehensive than the Free Application for Federal Student Aid (FAFSA), which only considers the assets of the custodial parent when calculating financial aid.
Lawyers for the plaintiffs accused the College Board of persuading schools to adopt the policy in 2006.
“The financial burden of college cannot be overstated in today’s world, and we believe our antitrust attorneys have uncovered a major influence on the rising cost of higher education,” said Steve Berman, managing partner and co-founder of the law firm Hagens Berman, which is representing the plaintiffs.
“Those affected — mostly college applicants from divorced homes — could never have foreseen that this alleged scheme was in place, and students are left receiving less financial aid than they would in a fair market.”
The lawsuit, filed in Chicago on Monday, seeks more than $5 million in monetary damages and a court order stopping the alleged pricing conspiracy.
One of the plaintiffs, Maxwell Hansen, said that two schools he attended — BU and American University — would have offered him more financial aid if both schools did not require his father to fill out the CSS Profile despite being informed that his dad would not be contributing money to his education.
Another plaintiff, Eileen Chang, alleged that Cornell refused her request to not consider the assets and financials from her noncustodial parent, who was on a disability income and could not contribute to her education.
Chang claimed that Cornell’s review resulted in an onerous financial burden that required her custodial parent to take out a Parent Plus federal loan to cover the rest of her tuition.
“Absent this agreement the university defendants would have competed in offering financial aid in order to enroll their top candidates,” the lawsuit said.
The College Board in a statement said “we are confident that we will prevail in this action.”
According to the College Board website, less than half of the 270 schools that use the CSS Profile require noncustodial parents to complete the form.
Students may request a waiver if they are no longer in contact with the parent.
Cornell, BU, Northwestern, Harvard, Yale, Dartmouth and Georgetown either declined to comment or did not immediately respond to a request for one.
Other defendants included California Institute of Technology, Columbia, NYU, Stanford and Duke. They also declined to comment or did not immediately respond to a request for comment.
Colleges have relied on the CSS Profile because they have claimed that some families game the system by providing a murky picture of their finances.
Earlier this year, Dartmouth and 16 other universities settled a class-action lawsuit accusing them of violating antitrust laws and conspiring to minimize financial aid for working and middle-class families.
With Post wires
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