Northwestern University and the University of Notre Dame have been targeted by a class action lawsuit accusing a group of America's top colleges and universities of illegally conspiring to make students pay considerably more for their education by forcing them to include income from noncustodial parents when calculating their need and eligibility for financial assistance.
Attorneys from the firm of Hagens Berman filed the lawsuit in Chicago federal court on Oct. 7.
The lawsuit was filed on behalf of named plaintiffs Maxwell Hansen and Eileen Chang.
According to the complaint, Hansen is a current student at Boston University, who previously was enrolled at American University in Washington, D.C. from 2021-2023.
The complaint said Chang attended Cornell University from 2017-2021.
The complaint names as defendants many of the most highly regarded U.S. colleges and universities, including Northwestern, Notre Dame, American University, Baylor University, Boston College, Boston University, Brandeis University, Brown University, California Institute of Technology, Carnegie Mellon University, Case Western Reserve University, Columbia University, Cornell, Dartmouth College, Duke University, Emory University, Fordham University, George Washington University, Georgetown University, Harvard University, The Johns Hopkins University, Lehigh University, Massachusetts Institute of Technology, University of Miami, New York University, Northeastern University, University of Pennsylvania, Rice University, University of Rochester, University of Southern California, Southern Methodist University, Stanford University, Syracuse University, Tufts University, Tulane University, Villanova University, Wake Forest University, Washington University in St. Louis, Worcester Polytechnic University and Yale University.
The lawsuit also names as a defendant the College Board, the nonprofit organization that administers the SAT exam and Advanced Placement coursework, and claims to help students navigate the path from high school to college and beyond.
The College Board is governed by representatives of high schools and colleges and universities from throughout the country.
The lawsuit takes aim at a strategy and methodology allegedly deployed by the schools through the College Board since 2006 to calculate and estimate the assets available to the families of current and prospective students, and their ability to pay students' tuition and other college costs.
According to the complaint, colleges and universities in the U.S. typically have used two primary methods to calculate student financial aid need.
The federal government uses the Federal Methodology, as seen on the Free Application for Federal Student Aid (FAFSA), which nearly every high school student in the U.S. completes, to determine eligibility for the Pell Grant and other federal need-based assistance programs.
Many schools, however, use other methods, generally known as the Institutional Methodology, which requires students to complete a College Scholarship Service (CSS) Profile through the College Board to determine financial aid need and eligibility.
According to the complaint, prior to 2006, many schools used their own individual standards for determining such need and aid eligibility.
However, according to the complaint, around 2006, the schools tagged as defendants in the lawsuit allegedly coalesced through the College Board around a so-called agreed price strategy to require students to include information about income and other assets held by non-custodial parents (NCPs), even if those parents were going to contribute nothing to help the student pay for college.
The lawsuit asserts this common strategy has for nearly two decades inflated the cost of attending college for many students and parents alike, reducing their ability to access need-based student financial aid and requiring them to rely instead on expensive student loans, which can take decades to repay.
According to the complaint, for instance, Chang's so-called NCP "is on disability" but "has a much higher income than her custodial parent." According to the complaint, her school, Cornell University, refused her request to remove her NCP's income from her need calculation, even though the NCP was contributing nothing toward her schooling. This allegedly resulted in her custodial parent taking out a so-called Parent Plus loan to fund her $70,000 per year tuition at Cornell.
The lawsuit claims this collective practice to require students to include income and asserts from non-custodial parents has harmed students and families and violated U.S. antitrust law.
The lawsuit seeks to expand the action to include students and custodial parents who submitted a CSS Profile through the College Board to any of the schools targeted as defendants in the lawsuit and included non-custodial parent income on their financial aid applications.
The plaintiffs estimate the class action could include at least 20,000 members.
The plaintiffs are seeking to impose joint and several liability on all of the defendants, as they seek unspecified financial damages, which could be tripled.
They are also seeking attorney fees.
The defendants have not yet responded to the claims in the lawsuit in court.
The plaintiffs are represented by attorneys Steve W. Berman, Daniel J. Kurowski and Rio S. Pierce, of the firm of Hagens Berman Sobol Shapiro LLP, of Seattle, Chicago and Berkeley.
“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 Berman, in a prepared statement announcing the lawsuit. “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.”