University Of Chicago Settles Class-Action Financial Aid Lawsuit For $13.5M

The University of Chicago has settled a lawsuit that accused the school of conspiring with other educational institutions to restrict financial aid to students.

According to the Hyde Park Herald, the University of Chicago has settled a class-action lawsuit against it and 16 other colleges and universities. The lawsuit, filed by current and former students, alleges that a “cartel” of 17 schools engaged in a “price-fixing conspiracy” restricting financial aid packages to the students.

The Chicago school is the first of the 17 accused of this practice to settle. It issued a written statement about the settlement and said that the claims based in the lawsuit are “without merit.”

“The University of Chicago is committed to removing financial barriers for undergraduate students who are admitted to the College and is proud of the extensive financial aid we offer to students,” a spokesperson said. “We look forward to putting this matter behind us and continuing to focus our efforts on expanding access to a transformative undergraduate education.”

The settlement has to be finalized and validated by the judge in the matter, U.S. District Judge Matthew Kennelly. The school has agreed to pay the students a $13.5 million settlement. The University of Chicago has also stated that it will provide documents and other information to plaintiffs to show the school’s financial aid practices.

Business Insider reported that the other schools involved in the lawsuit include: Columbia, Cornell, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, Rice, Vanderbilt, Yale, Brown, Dartmouth, Emory, Caltech, and Johns Hopkins.

All 17 institutions are accused of artificially inflating tuition for more than 170,000 students over the past two decades.

The suit was filed early last year in an Illinois federal court alleging the schools, which are part of the now-dissolved 568 Presidents Group, had incorporated a shared methodology to calculate the students’ financial needs for the past 20 years.

“The 568 Cartel has explicitly aimed to reduce or eliminate price competition among its members,” the lawsuit said. “As a result of this conspiracy, the net price of attendance for financial-aid recipients at Defendants’ schools has been artificially inflated.”

The group was discontinued after this lawsuit was filed in 2022.