First Ivies Settle in ‘568 Cartel’ Price-Fixing Case

Four more universities have settled in the “568 Cartel” antitrust case, agreeing to pay tens of millions of dollars in damages.

Over the past few months, eight institutions in total have settled in this case involving 17 elite universities accused of conspiring to fix prices and limit financial aid awards.

In this latest round, the settlements are as follows:

Last August, the University of Chicago became the first defendant to settle, agreeing to pay $13.5 million. Vanderbilt University followed suit in November, though the financial terms of its settlement haven’t been disclosed.

More recently, Emory University agreed to pay $18.5 million.

“We are pleased the litigation is behind us,” Emory spokeswoman Laura Diamond said in an email to The Washington Post. “Our focus has been and always will be to make an Emory education accessible to all talented students, regardless of their financial resources, and we look forward to continuing that mission.”

Emory’s settlement brings the total amount to $118 million, according to a release. But that amount doesn’t include the $33.75 million Rice University agreed to pay, as noted in the university’s financial statements from fiscal years 2023 and 2022.

In fact, the release, issued by an attorney for the plaintiffs, notes Rice among the institutions yet to settle. However, The Washington Post, among other news sources, noted Rice’s settlement details, which would bring the total damages to roughly $151 million.

The plaintiffs’ attorney did not respond to a query seeking clarification.

In addition to Rice, the release details, the remaining defendants include the University of Pennsylvania, Georgetown University, Cornell University, the University of Notre Dame, the Massachusetts Institute of Technology, the California Institute of Technology, Johns Hopkins University, Dartmouth College, and Northwestern University.

“It is past time for the presidents and governing bodies of the remaining defendants to stand up and do the right thing for their students and alumni, and resolve the overcharges to middle-class and working-class students that stemmed from the twenty years of collusion on financial aid by elite universities,” said Robert D. Gilbert, a partner of Gilbert Litigators & Counselors, one of the firms representing the plaintiffs, in the release.

The class-action suit — Henry et. al. vs. Brown University et. al., filed in 2022 — alleges these private colleges are in violation of the Sherman Antitrust Act because they failed to uphold a commitment to need-blind admissions as required by Section 568 of the Improving America’s Schools Act of 1994.

This congressional sanction, which expired in September 2022, allowed colleges to formulate common approaches to awarding need-based financial aid — provided they strictly adhered to need-blind admissions.

The claim contends these universities conspired to artificially reduce financial aid awards and increase the net cost of attendance through the use of a consensus methodology for determining aid. Since 2004, more than 200,000 students have paid higher tuition and incurred larger debt absent competition among these institutions, the suit alleges.

Moreover, these colleges strayed from their need-blind commitment by favoring wealthy families in some admissions decisions, claims the lawsuit. They considered the financial need of students on the waitlist, engaged in enrollment management practices to secure full-pay students, and wooed kids of donors or potential donors.

Last fall, lawyers for the plaintiffs claimed Vanderbilt was eager to admit the children of its wealthiest donors, even if some were not up to Vanderbilt’s exacting standards.

Any monetary decisions resulting from this case could benefit all plaintiffs. The UChicago documents made clear that alumni and students involved in the suit would be notified of the financial ramifications of any settlements.