$43.5 Million Payout From Northwestern To Settle Price-Fixing Suit

EVANSTON, IL — Northwestern University officials have agreed to fork over $43.5 million to resolve allegations of illegal price-fixing in admissions.

Northwestern was among 17 selective universities accused of collusion to determine financial aid packages in a federal antitrust lawsuit filed more than two years ago.

Northwestern was joined by three other schools in the latest round of proposed settlements revealed Friday in federal court filings.

Vanderbilt University approved a $55 million settlement, while Dartmouth College and Rice University agreed to pay $33.75 million. That leaves seven more university defendants remaining.

While the schools claimed to admit students without regard to the financial need of applicants, the suit alleged they favored wealthy donors and so-called "legacy" students.

The colleges worked together under what was known as the 568 Presidents Group, a reference to the antitrust exemption that allowed university officials to collaborate on financial aid calculations as long as they were "need-blind" when considering applicants.

According to a court filing last month, attorneys for the plaintiffs “pursued a strategy of increasing the settlement amounts with each successive agreement to exert pressure on non-settling Defendants to reach agreement imminently or risk having to pay significantly more by waiting.”

University of Chicago officials were the first to agree to settle the allegations, paying just $13.5 million to resolve the allegations.

Settlements were approved earlier this month with Brown, Columbia, Duke and Emory universities for a combined $104.5 million.

“It is past time for the presidents and governing bodies of the remaining defendants to stand up and do the right thing for their students and alumni, and resolve the overcharges to middle class and working class students that stemmed from the twenty years of collusion on financial aid by elite universities," said Robert Gilbert, an attorney for the plaintiffs, in a statement following the previous round of proposed settlements.

California Institute of Technology, Cornell University, Georgetown University, Johns Hopkins University, the Massachusetts Institute of Technology, the University of Notre Dame, and the University of Pennsylvania comprise the remaining defendants in the case.

A Northwestern spokesperson emphasized that university officials did not admit liability in the $43.5 million settlement agreement and continue to deny any wrongdoing.

The money from the settlement funds, now totaling $284 million, is set to be distributed among the students in the proposed class, which includes about 200,000 people who were undergraduate students in schools named as defendants.

According to attorneys for the plaintiffs, assuming about half of the class members submit claims on time and a judge awards attorneys' fees as requested, the average claimant will receive about $2,000.

Earlier: Northwestern, Other Universities Run Price-Fixing Cartel: Lawsuit