Houston, Texas – Rice University has settled an antitrust lawsuit filed against 17 prestigious private universities across the United States for illegally operating a system that limits the amount of financial aid given to students, according to Rice University's financial statements from last year. announced that it had secured $33.75 million.
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According to the Houston-based university's financial report for last year, first reported by the Houston Chronicle, the university used the funds to settle a “class action lawsuit in which it was named as a co-defendant along with 16 other universities.” It is said that they plan to use it.
Court records related to the lawsuit reviewed Friday show no settlement agreement has yet been reached. Mr. Rice declined to comment on the lawsuit or the financial statements. The plaintiffs did not respond to requests for comment Friday.
Nine former students who attended some of the universities filed a lawsuit in January 2022, alleging that the schools' financial aid and admissions practices raised the cost of attendance. As a result, more than 200,000 students receiving financial aid were overcharged hundreds of millions of dollars, according to court documents. The U.S. Department of Justice supported the case.
That burden falls “particularly on low- and moderate-income families who struggle to pay for a college education and set their children up for success,” the complaint says.
The institutions named as defendants in the lawsuit are Rice University, Brown University, California Institute of Technology, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, Johns Hopkins University, Massachusetts Institute of Technology, and Northwestern University. University, University University. University of Chicago, University of Notre Dame, University of Pennsylvania, Vanderbilt University, Yale University.
For nearly 20 years, universities have come together to develop ways to award financial aid. Such practices are typically prohibited by federal antitrust laws, and their purpose is, in part, to prevent competitors from joining in to fix prices. The schools cooperate because of a federal law that protects universities with so-called “needs-blind” policies (basically, they ignore an applicant's financial situation when making admissions decisions) from antitrust laws. That was recognized. The group called itself the 568 Presidents Group, after the federal law that allowed the cooperation.
The group disbanded in November 2022 after half of the group was accused in a lawsuit of violating policies that ignored their needs.
Plaintiffs allege that nine of the schools involved in the lawsuit considered students' financial circumstances during the admissions process and considered wealthy students and past donations when deciding whether to admit waitlisted or transfer students. It claims to have given priority to children of donors and potential donors. According to the complaint, the system effectively reduced the funding available to students seeking financial aid.
Rice was one of seven defendants who “may or may not have taken into account” the financial needs of applicants, according to the lawsuit, but others involved He said he should have known that the university was not complying with regulations because of joint research.
Some universities have already established permanent residences. The University of Chicago was the first to win a $13.2 million settlement in August. Emory University followed suit shortly after in September, settling for an undisclosed amount. Vanderbilt University also agreed to the settlement. Rice said about 6% of non-operating income in 2023 will be allocated to liquidation.
The remaining defendants involved have until January 31st to gather evidence. A trial date has not yet been set.
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