Massachusetts colleges among 40 elite schools accused of financial aid price-fixing

By Jamy Pombo Sesselman

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    BOSTON (WCVB) — Forty private universities, including several in Massachusetts, are being accused of overcharging for tuition by including the financial backgrounds of noncustodial parents when determining financial aid.

A Boston University student and Cornell University alum filed the class action lawsuit Monday against Boston College, Boston University, Brandeis University, Harvard University, Massachusetts Institute of Technology, Northeastern University, Tufts University, Worcester Polytechnic Institute and 31 other elite schools.

The College Board, which developed the financial aid methodology the colleges use, was also named as a defendant.

Plaintiffs Maxwell Hansen and Eileen Chang allege the defendants “have engaged in a concerted action to require a noncustodial parent of any applicant seeking non-federal financial aid to provide financial information.”

“Defendants’ concerted action has unlawfully caused the net price of education to increase,” the lawsuit reads.

The lawsuit also said starting in 2006, the College Board “made an intentional push to require schools to agree to the consideration of the income and assets of noncustodial parents when making financial aid determinations.”

“Students were told there were no exceptions to the requirement – even if a divorce court order was issued concerning college expenses,” the lawsuit states. “Formulas are then used to generate a financial aid offer. The student then ultimately receives an estimate for the family contribution based on what the two parents can contribute, regardless of whether both parents do actually contribute.”

The plaintiffs allege students pay about $6,200 more to attend schools that include the finances of the noncustodial parent compared to schools that do not.

“The average net price for the 40 defendant universities who use the NCP Agreed Pricing Strategy is approximately $6,200 more than for 10 non-NCP universities in the top 50 private universities – indicative of the anticompetitive effects from defendants’ concerted activity,” the lawsuit alleges.

The lawsuit seeks more than $5 million in monetary damages and a court order to stop the alleged practice.

“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 cofounder of Hagens Berman. “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 defendants include College Board, American University, Baylor University, Boston College, Boston University, Brandeis University, Brown University, California Institute of Technology, Carnegie Mellon University, Case Western Reserve University, The Trustees of Columbia University in the City of New York, Cornell University, Trustees of 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, Northwestern University, University of Notre Dame du Lac, The Trustees of the University of Pennsylvania, William Marsh 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 Saint Louis, Worcester Polytechnic Institute and Yale University.

If you are a noncustodial parent, or a student with a noncustodial parent, click here to find out more about the class-action lawsuit.

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