3 More Colleges Settle in ‘568 Cartel’ Price-Fixing Case

Three more elite colleges have settled in the “568 Cartel” antitrust case accusing 17 private institutions of conspiring to fix prices and limit financial aid awards.

Dartmouth College, Northwestern University, and Vanderbilt University recently agreed to terms, bringing the total amount of the 10 settlements to $284 million.

Vanderbilt announced its intent to settle last November but didn’t disclose the amount, now revealed to be $55 million. That’s the largest figure to date. The other settlement amounts are as follows:

Since UChicago became the first institution to settle last April, the amounts have grown significantly larger.

Court documents note that plaintiffs’ counsel has pursued a strategy of increasing the settlement amounts with each successive agreement to exert pressure on non-settling defendants to reach agreement imminently or risk having to pay significantly more by waiting, according to a statement shared with BestColleges.

Those non-settling defendants include the following universities:

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, Robert D. Gilbert, a partner of Gilbert Litigators & Counselors and an attorney for the plaintiffs, said in the statement.

The class-action suit — Henry et. al. vs. Brown University et. al., filed in 2022 — alleges these 17 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.

At a court hearing last July, Terri Mascherin, an attorney representing Dartmouth, said the college has considered donations when making admissions decisions.

We put forth a witness last week who gave testimony to the effect that each year in certain admissions decisions, candidates who were on the fence, if you will, would be admitted because of the interest of the alumni affairs and development office, Mascherin said in a court transcript obtained by The Dartmouth, the college’s student newspaper.

Similarly, 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.

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, Julia Jordan, a spokeswoman for Vanderbilt, said in a statement.

Any monetary settlements will benefit all alumni and students included in the class-action suit, the plaintiffs’ attorneys note.

These new settlements will significantly increase the compensation to the class members for the harm we allege the defendants’ cartel caused, Ted Normand, a partner at Freedman Normand Friedland and a lead counsel for the plaintiffs, said in the statement.

Those affected will be notified of the financial implications — restitution that promises to grow substantially as the remaining universities settle this case.