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Settlement reached in financial aid lawsuit involving top MBA programs

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Last Updated on February 25, 2024 by Robert C. Hoopes

Four prestigious private universities, Dartmouth College, Rice, Vanderbilt, and Northwestern, have recently agreed to settle a lawsuit alleging violations of antitrust laws related to financial aid determination. The total settlement amount is a staggering $166 million, contributing to a total of $284 million if approved by a federal judge.

The lawsuit accused these universities of colluding on financial aid amounts, which allegedly favored wealthier families while neglecting to follow need-blind admission practices. This settlement follows previous agreements reached with other institutions including Yale, Columbia, Duke, Brown, Emory, and the University of Chicago.

Attorneys representing former students argue that 17 top universities failed to uphold need-blind admission or engaged in collusion when setting financial aid. Despite these accusations, Northwestern, Dartmouth, and Vanderbilt assert their commitment to providing financial aid based strictly on students’ needs.

These settlements aim to rectify overcharges that affected alumni and students from working and middle-class backgrounds. The costs of these settlements have been steadily increasing, ranging between $33.75 million to $55 million for each university involved.

Attention is now shifting towards the remaining seven elite universities that have not yet settled in this case. It is clear that the repercussions of this lawsuit are significant, shedding light on the complex and often murky dynamics of financial aid distribution within higher education institutions.

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