Elite colleges accused of price-fixing to make divorced parents pay more

Forty of the country's top colleges were sued this week and accused of colluding in a price-fixing scheme that has increased the cost of college for students with divorced or separated parents.

A Cornell University alum and Boston University student filed the federal lawsuit Monday that takes aim at the CSS Profile, a form some schools use to determine a student's financial need. The complaint alleges that the nonprofit College Board, which administers the form, conspired with schools named in the complaint to develop a policy in 2006 to consider the assets of noncustodial parents in its calculation. The point was to deny students institutional scholarships, the lawsuit alleges.

By requiring both parents to fill out the CSS Profile, colleges could provide an artificially high estimate of what the family could afford to pay, even if only one parent provides financial support for the student, according to the complaint. Attorneys say the College Board pushed schools to adopt the policy, arguing that institutions should have a consistent approach.

The lawsuit, filed in a federal court in Illinois, estimates that nationwide at least 20,000 prospective class members have been harmed by the practice over the past 18 years. Attorneys are seeking class-action status.

"The financial burden of college cannot be overstated in today's world, and we believe our antitrust attorneys have uncovered a major influence on the rising cost of higher education," said Steve Berman, managing partner and co-founder of the law firm Hagens Berman, which is representing the plaintiffs. "Those affected — mostly college applicants from divorced homes — could never have foreseen that this alleged scheme was in place, and students are left receiving less financial aid than they would in a fair market."

Maxwell Hansen, one of the plaintiffs in the case, said he indicated on the CSS Profile that his father would not contribute money to his education but American University still required his dad to fill out the form. The same was true when Hansen transferred to Boston University last year. Although both schools provided some financial aid, Hansen and his attorneys suspect he could have received more if not for the requirement.

Eileen Chang, the other plaintiff in the case, said she asked Cornell University to remove her noncustodial parent, who received disability income and could not contribute to her education, from its financial aid calculation, according to the complaint. The university refused and Chang's custodial parent had to take out a Parent Plus federal loan to cover the rest of her tuition.

Some of the nation's most prestigious and pricey universities are named in the complaint , including much of the Ivy League and top-tier research institutions such as the University of Southern California, MIT and New York University.

"This lawsuit has no merit and NYU intends to vigorously defend itself and its financial aid policies and procedures," said John Beckman, a spokesperson for NYU.

Harvard, Georgetown, Brandeis and Duke universities declined to comment on pending litigation, while USC and Tufts University said they are still reviewing the filing.

According to the complaint, the colleges involved in the lawsuit either had employees participate in creating the College Board policy, implemented the policy or require students to submit information about noncustodial parents to determine need-based financial aid.

In a statement, the College Board said "we are confident that we will prevail in this action."

Less than half of the 270 colleges that use the CSS Profile require noncustodial parents to complete the form, according to the College Board's website . Students can request a waiver if they are no longer in contact with the parent.

Colleges, especially wealthy private institutions, have gravitated to the CSS Profile because it offers a more detailed look at family finances than the Free Application for Federal Student Aid. The FAFSA only considers the custodial parent's assets in calculating need-based financial aid.

Colleges have complained that some families find ways to game the system by withholding a complete picture of their finances. Yet students are increasingly questioning whether colleges are themselves manipulating financial aid practices to hold onto more of their institutional dollars.

In 2022, a group of former college students filed a class-action lawsuit against 16 elite schools, including Georgetown, Columbia and Brown universities, for allegedly conspiring to limit financial aid for admitted students. Ten universities, including Columbia and Yale, have so far settled in that case for a total of $284 million.