A federal judge dismissed a lawsuit last week that accused the College Board and 40 elite universities — including Penn — of engaging in a price-fixing scheme that inflated tuition costs for students with divorced or separated parents.
The lawsuit, initially filed in an Illinois district court in October 2024, alleged that the universities purposely withheld funding from applicants by evaluating the financial backgrounds of noncustodial parents during deliberations over financial aid packages. The Sept. 25 order dismissed the suit outright, arguing that the plaintiff’s arguments lacked plausibility.
“Nothing in Plaintiffs’ complaint suggests that the University Defendants exchanged their own internal financial aid decisionmaking processes or guidelines or otherwise shared with the other University Defendants the amount of financial aid they planned to offer a particular student,” United States District Judge Sara Ellis wrote.
“Nor does the complaint allege that the University Defendants all agreed on the same exact formula for calculating financial aid based on the NCP financial information.”
A University spokesperson declined The Daily Pennsylvanian’s request for comment on the dismissal.
The class-action lawsuit — filed by the law firm Hagens Berman on behalf of a student at Boston University and a former Cornell University student — alleged that a price-fixing practice began in 2006, when the College Board implemented a policy requiring financial information for both parents, regardless of custody arrangements, in its College Scholarship Service Profile.
Penn requires all applicants seeking financial aid to complete the CSS Profile, and applicants with noncustodial parents must also submit financial information from both parents.
After the case was filed, Penn implemented changes to its financial aid process.
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Students are now only required to submit financial information for a noncustodial parent once. In addition, they only need to provide the W-2 form — which details earned wages — for their primary parent.
The dismissal concedes that colleges requiring financial information from noncustodial parents generally increased the cost of tuition but argued that the plaintiffs failed to provide evidence of a price-fixing scheme.
“The complaint also leaves unexplained how or why this particular subset of institutions that require NCP financial information formed an agreement while leaving out others that also collect and use the same information in their financial aid determinations,” Ellis wrote.
David Gringer — an attorney at WilmerHale representing the College Board and Penn — told The Washington Post that the court “correctly held that this case is nothing like a price-fixing conspiracy.”
“Collecting financial information from both an applicant’s parents makes good sense by ensuring that financial aid awards go to those who would benefit from the assistance,” Gringer added.
In August, Penn was named in a separate lawsuit arguing that the early decision admission process disadvantages students, as colleges are not given an incentive to provide accepted applicants increased financial aid.
Penn remains among five universities yet to settle a 2022 antitrust lawsuit over financial aid that could award defendants approximately $2 billion in damages.
The ongoing case accuses Penn and 16 other universities of forming a “price-fixing cartel” that colluded to decrease financial aid and benefit wealthy students.
