The University of Chicago, one of 17 highly selective colleges accused in a class action of violating federal antitrust laws by conspiring by using a common method for allocating financial aid, has agreed to pay $13.5 million to settle the legal claims against it.
The settlement, reported by The Wall Street Journal based on earlier reporting by Reuters, was disclosed in court documents filed in federal district court in Illinois. The settlement between the university and the plaintiffs, a group of five recent graduates of the targeted institutions, still requires approval by the judge in the case.
The institutions are members of the 568 Group, which consists of 21 colleges and universities that claim a federal exemption from antitrust laws in developing and using a common methodology to award need-based aid. The exemption was created by Congress after the Ivy League colleges and MIT were charged by the Justice Department with price-fixing because they consulted one another on the aid to be given to students admitted to more than one institution. The exemption expired last fall.
The court document asserts that the settlement is in the best interests of the plaintiffs because it would assure those suing of a “significant cash recovery” without diminishing the liability of the 16 other universities, and, perhaps ominously for those other institutions, offer the “benefit of certain additional information from UChicago that plaintiffs expect will help their understanding of the conduct of the 568 Group.”
Chicago said in court filings that the settlement is not an admission of liability in the case.
The settlement document also asserts that Chicago had stopped participating in the arrangement in the mid-2010s because, according to the plaintiffs, it was “limiting its ability to compete on price.”