Yale among prestigious colleges accused in lawsuit of financial aid 'price fixing'
Yale University is among the 40 elite universities hit with a lawsuit claiming they overcharged tuition for students with noncustodial parents.
A Boston University student and Cornell University alumnus are suing a slew of schools for participating in a "price-fixing conspiracy" by considering the income and assets of noncustodial parents when making financial aid determinations, according to the federal class action lawsuit filed in Illinois this week.
By requiring both parents to fill out their financial information, colleges have made students with noncustodial parents, including divorced or separated parents and in single-parent homes, pay artificially high prices for their education, according to the lawsuit.
Yale declined a CT Insider request for comment.
Yale requires financial information for both parents to generate a financial aid award, according to the university's financial aid website.
"Yale believes that both parents have a responsibility to contribute toward their child's college education, even if they are divorced or separated," according to Yale's website. "However, we understand that some families may have extenuating circumstances that would require an exception."
The university allows students to petition for a waiver of the noncustodial parent's financial information in such cases, although submission of the waiver petition does not guarantee its approval, according to the website.
The lawsuit targets 40 of the country's top private schools, including Harvard University, Cornell University, Massachusetts Institute of Technology and Brown University. The suit also names the nonprofit College Board, which administers the CSS Profile that some schools such as Yale use to determine a student's financial need, as a defendant.
The complaint says that each named school's financial aid website provides a link to the CSS Profile website for the requirement that all noncustodial parents provide financial information in an aid application. According to College Board's website, a noncustodial parent is typically the parent the student did not live with most of the time during the past year.
One of the plaintiffs in the lawsuit claims that his noncustodial father has not contributed to his tuition, and the other plaintiff is claiming that her noncustodial parent is on disability and has a much higher income than her custodial parent, and was factored into her tuition cost even though the noncustodial parent is unable to contribute.
Because of these noncustodial parent rules, the out-of-pocket cost for students with noncustodial parents is much higher for CSS Profile schools as it reduces the amount of nonfederal institutional aid they can receive, the suit says.
At Yale, the CSS Profile, along with FAFSA, is used to determine eligibility for Yale scholarships, according to the financial aid website. The CSS Profile collects information to award institutional aid funds, provides more detailed information than the FAFSA and is required for all students applying for a Yale scholarship, according to the website.
"Institutional aid is a substantial part of the financial aid package for most Yale College students," according to the website.
The lawsuit claims that beginning in 2006, College Board conspired with the 40 named schools and "made an intentional push to require schools to agree to the consideration of the income and assets of noncustodial parents when making financial aid determinations."
"That concerted action substantially raised the prices that Plaintiffs and Class members pay to attend college," according to the lawsuit.
The lawsuit says that there are at least 20,000 Class members (all applicants for financial aid who submitted a CSS Profile to any of the defendant schools who at the time of applying had a noncustodial parent whose financial information was used as a factor in the amount of aid awarded based on the CSS Profile) that were injured.
The FAFSA, another financial aid form, is required by all schools for federal or state aid and counts only the income of the custodial parent, according to the suit.
Approximately 250 private schools also require the CSS Profile, which has more stringent requirements for aid eligibility, to determine whether to provide additional aid beyond government aid, according to the lawsuit, and counts the income of the custodial parent, the noncustodial parent and the stepparent.
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