University of Chicago to settle student aid price-fixing lawsuit for $13.5 million

The University of Chicago has agreed to pay $13.5 million to settle a lawsuit alleging it conspired with other top universities to limit the financial aid it awards students.

U. of C. is the first of 17 schools — including Northwestern University, Notre Dame and Ivy League schools — to settle what’s been dubbed the “568 Cartel” class-action lawsuit.

Section 568 of the Improving America’s Schools Act allows universities to share and agree on financial aid award formulas, but only if they don’t consider students’ financial need in admissions.

The lawsuit alleges U. of C. and the other schools broke antitrust laws by illegally considering financial need in admissions while also fixing the price of student aid, thereby limiting competition and the overall amount the schools awarded.

Since 2004, more than 200,000 students have paid higher tuition because of that price fixing, the plaintiffs allege. The settlement will award current and former students affected by the alleged price fixing.

In a statement, U. of C. said, “We look forward to putting this matter behind us,” but maintained that “the plaintiffs’ claims 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,” the school said.

The proposed settlement, filed Monday in federal court in Chicago, must be approved by U.S. District Judge Matthew F. Kennelly.

The plaintiffs agreed to dismiss the case against U. of C. if the school provides documents and a witness, the school’s former director of college aid, to help the case against the other schools.

Northwestern University, which remains a defendant, did not immediately reply to a request for comment.

The case — Henry, et al. v. Brown University, et al. — was filed in January 2022.