I don’t disagree with you in practice, but the problem is for federal antitrust purposes, it WAS a legal term! Hence the lawsuit, and the settlements.
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I also don’t disagree with this. Technically the need blind schools’ admissions staffs don’t see a student’s financials and level of need, but they (generally) do see parent education level and current jobs, address/zip code, HS profile. Many students address their level of need in essays. Lastly, many of the more selective schools use CollegeBoard Landscape, which shows average household income and other information based on the student’s census tract.
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Agree 100%.
Bumping this, for an update:
A filing in an antitrust lawsuit against some of the nation’s top universities alleges the schools overcharged students by $685 million in a “price-fixing” scheme, raising serious questions about their past admission and financial aid policies.
Every year, according to a motion filed in federal court Monday night, Georgetown University’s then-president would draw up a list of about 80 applicants based on a tracking list that often included information about their parents’ wealth and past donations, but not the applicants’ transcripts, teacher recommendations or personal essays.
“Please Admit,” was often written at the top of the list, the lawsuit contends — and almost all of the applicants were.
Documents and testimony from officials at Georgetown, the University of Notre Dame, the University of Pennsylvania, MIT and other elite schools suggest they appeared to favor wealthy applicants despite their stated policy of accepting students without regard for their financial circumstances. That “need-blind” policy allowed the schools to collaborate on financial aid under federal law, but plaintiffs in the case say the colleges violated the statute by considering students’ family income.
Full article here, gift link:
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This article also does a better job of briefly highlighting some of the major issues in the case than some other articles I remember seeing:
A coalition of highly selective universities, formed in the late 1990s and known as the 568 Presidents Group, collaborated on aid formulas under a 1994 federal antitrust exemption. The exemption applied only if schools engaged in need-blind admissions. But attorneys for the former students say at least nine universities maintained admissions policies that still favored wealthy students in violation of the antitrust exemption, which expired in the fall of 2022.
Attorneys for the plaintiffs argue that many of these schools became more generous with their financial aid after the Presidents Group disbanded in late 2022. They argue that every school named in the case could have awarded 10 percent to 20 percent more institutional aid from unrestricted endowment funds throughout the 20 years but chose to limit aid packages.
And frankly, the memo from Georgetown sounds pretty damning.
The memo also noted the school is “under-funded and under-endowed and we need to do a better job of enlisting the support of America’s wealthiest families and corporations in assisting us. Special interest admits should provide this type of opportunity to enhance and strengthen our future.”
But, can anyone help me to understand this? Is it basically just saying that damages are tripled if there is an anti-trust violation? Would the remaining 6 non-settling colleges actually end up paying the $2B or would it end up in litigation for decades or…? Is the $284M in settlements from the other 10 colleges deducted from the $685M or would it be deducted from the $2B (if the $2B number is actually the final number that the court agrees on)? And what’s the likelihood that the remaining schools that haven’t settled could pay the $2B without going defunct or being severely damaged?
The claimed damages of $685 million, which were detailed in the court filing Monday night, would automatically triple to more than $2 billion under U.S. antitrust laws.
These are the schools being sued that have yet to settle:
Georgetown, Penn, Caltech, MIT, Cornell, Notre Dame and Johns Hopkins continue to fight the lawsuit.
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Good questions! Where are our attorneys? @NiceUnparticularMan? who else?
And remember some of these schools were/are need aware for internationals and/or waitlisted students and/or transfers. Also, some know and even do financial aid pre-reads for recruited athletes.
Another damning quote is that Harvard never joined Presidents’ 568 club because they felt it would decrease their financial aid.
testimony from a former Harvard official who said the school had not joined the group because it would compel the school to reduce its financial aid awards;
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Yes, there is something called joint and several liability for alleged antitrust conspiracies. When there is a jury verdict for damages, first it is tripled, then any settlements are deducted from the tripled amount, and then the defendants who lost at trial have to pay the remainder. There can be wrinkles in individual cases, but that is the legal default.
So the more dangerous antitrust suits tend to settle, including during trial. But not always. In which case it can sometimes be considered a form of “bet the company” litigation.
I am not sure how that will play out here. But if it is actually going to trial, I would not be surprised to see more settlements.
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So the schools that settled would not be at risk of paying more, should their be a trial (and loss) for the schools that didn’t settle? Would love to be a fly on the wall at the schools that haven’t settled…seems foolhardy at this point (but of course we don’t have full information.)
Bet the college here 
I can just see it - the plaintiffs seizing control of MIT and selling it off in pieces, PE style.
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A lot of times they are hoping for some pre-trial legal development that will be favorable for them and then they either get out entirely, or can reach a lower settlement. The ones that actually go to trial may even be looking at things like how jury selection goes, key evidentiary rulings, and so on. This can be a very high stakes game but sometimes defendants that hold out longer “win” that game (paying proportionately less or getting out entirely).
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As noted, Harvard isn’t the lawsuit, so maybe they would be interested in making an offer for the whole thing . . . .
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I can see Harvard’s trustees sitting around the conference table, rubbing their hands in glee at the thought of snapping up MIT in a fire sale. Maybe grab Caltech too while they’re at it. West coast campus and all.
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By the way, the motion filed yesterday that is generating this news is a good example of something a hold out Defendant could be waiting for.
At this step the named plaintiffs are seeking certification of a class action where they will also be representing similarly-situated others. If class certification is denied, they can continue as individuals, but then the stakes are relatively low since they are limited to their own personal damages. If class certification is approved, that is when hundreds of millions in single damages, billions in tripled damages, are potentially at stake.
I don’t know anything in particular about this case, but class certification is not always a given even if the individual plaintiffs seem to have a strong case. There are a variety of other standards they need to meet in order to get class certification, and sometimes defendants succeed in preventing it.
On the other hand, if the class is certified, then some defendants may cave at that point and settle. Unless they have something else they want to try first . . . .
Again, this is all generic speculation, I really don’t know the dynamic in this case specifically. But I thought I would mention it, if people were curious about what sorts of things can happen before trial that could move the settlement needle a lot in one direction or the other.
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It’s interesting that most of the schools have settled, and the first ones to settle did so a much lower cost. (I don’t know if all those settlements have been ‘accepted’ though(
I have nothing to add, but just wanted to thank @NiceUnparticularMan for sharing his knowledge of the legal system here. It definitely helps me to understand some of the decision-making more.
I remember one of the articles mentioning that they wanted each settlement to increase in price, so the longer one held out, the bigger the price one would have to pay.
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This is a common strategy in antitrust cases, sometimes known as “log rolling”. As plaintiffs you more or less make it explicit that you will offer better deals to the defendants who settle earlier, and will demand more from the defendants who settle later. This is a potentially credible threat because of that joint and several liability framework, and the idea is to get funds, and sometimes cooperation, early that can help you sustain the litigation against the hold outs.
When these are class settlements, courts do have to approve them. But usually they are pretty understanding of strategies like this that are obviously to the potential benefit of the class.
Strangely enough, the strategic considerations involved in settling complex antitrust class actions is not usually a popular topic for me at cocktail parties and such. So it is a pleasure when anyone actually cares.
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Chicago being the first to make a deal at $13.5M looks like a pretty smart decision at this point. I’m betting the legal fees of the holdouts are already somewhere in the 7-figure ballpark.
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Personally, I can ignore the tagged wealthy Dean’s/President’s list admits simply because it’s a relatively small proportion of admits (even though it was a violation of Section 568.)
It is but one way the schools in the 568 President’s group flouted the need blind requirement. As discussed above, some of those schools weren’t/still aren’t need blind for international students, and/or transfers, and/or some proportion of recruited athletes either.
The arrogance of these schools is appalling and I am happy to see more schools settling. But, in the big picture, this lawsuit won’t change much in terms of the many advantages that affluent students have in selective college admissions.
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