Four More Prestigious Colleges to Settle Price-Fixing Suit for $166 Million
Seventeen schools were accused of colluding on financial-aid calculations; 10 now have agreed to settle
Read in The Wall Street Journal: https://stocks.apple.com/AwbLwFRnpToCCdqQTbYMPPA

Surprising nobody, other than how many schools were left off the list.

Quote:

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Dartmouth College, Northwestern University, Rice University and Vanderbilt University agreed Friday to pay $166 million to settle a lawsuit that accused them and other schools of colluding to determine students' financial-aid packages.
They were part of a group of 17 highly selective institutions that were accused in 2022 of illegal price-fixing; 10 now have settled or formally agreed to do so.
Dartmouth and Rice each will pay $33.75 million, Northwestern will pay $43.5 million and Vanderbilt will pay $55 million to settle the suit, according to filings made in an Illinois federal court Friday. The payments will be directed to a fund for students harmed by the alleged collusion.
The colleges were allowed under a federal antitrust exemption to collaborate on aid calculations, but only if they didn't take financial need into consideration when reviewing applicants. They also couldn't discuss aid offers for individual students. The suit alleged that the schools did consider finances in some circumstances, for instance giving an edge to children of wealthy donors or when selecting candidates from their wait lists.
The colleges worked together under what was called the 568 Presidents Group, a reference to the section of the 1994 legislation that provided the antitrust exemption. The arrangement allowed schools to avoid bidding wars for low-income applicants but also limited how much they could favor wealthy applicants to keep scholarship spending to a minimum. The exemption expired in fall 2022, and the group dissolved that November.
The University of Chicago agreed last year to settle the case for $13.5 million. Emory, Yale, Brown, Columbia and Duke universities filed paperwork in court last month, agreeing to pay a combined $104.5 million. A federal judge in Illinois approved the settlements earlier this month.
Rice referenced a $33.75 million legal settlement in its fiscal 2023 financial report, though that hadn't been confirmed in court filings until Friday. Vanderbilt said in a November filing that it reached "an agreement in principle," but didn't release financial details at the time.
The schools that agreed to settle denied wrongdoing but said settling would avoid the distraction and expense of continued litigation. They also highlighted their substantial financial-aid programs currently available to students.
Seven others are still fighting the antitrust allegations: the 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.
Plaintiffs' attorneys said in a court filing that they expect to continue increasing the settlement amounts with each new agreement, to exert pressure on other defendants to move quickly or risk the prospect of paying even more.

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That's behind a paywall, but my first thought upon reading the headline was "I'll bet Rice is involved". Sure enough...

Maybe they paid but they haven't changed anything. They all charge very similar amounts, they don't really do merit scholarships, and they have similar policies around Early Action and have remarkably similar policies. They all run the same game. The Top 20 or so private schools all work together pretty openly. Nice that some folks got paid but I'm not holding my breath on them starting to compete with each other by making real changes.

That's really interesting to see to Vandy and Rice on that list. In my opinion, those two are fairly well known for giving out merit-based aid, which is extremely rare for many of the very selective schools. Also, it is well-known that if the student's family is among the top 1% income earners, then your admission odds are significantly enhanced.

Are you talking about large donors to these schools, or just wealthier parents' children?

Kool said:

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Are you talking about large donors to these schools, or just wealthier parents' children?

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Just wealthier families. Much of this came to light from last summer's Supreme Court ruling, but it has been common knowledge for awhile among IEC's.

Here's an article discussing their findings, and the main quote I'm referencing.

How The Admission Practices Of Elite Colleges Perpetuate The Advantages Of The Wealthy

"Students from the top 1% of the income distribution are nearly twice as likely to be admitted to Ivy-Plus colleges compared to applicants from low- or middle-income families with comparable SAT/ACT scores."

Interesting information, thanks for sending. A few takeaways I had:

1). The greatest correlation (and probably causation) between higher income and higher Ivy Plus acceptance was for legacy students. That certainly makes sense, right or wrong.
2). I was very surprised to read that the higher income students also disproportionately accounted for the athletes recruited. The only thing I can think of is maybe these students are being recruited for lacrosse, fencing, sailing, rowing, etc. Certainly not football and basketball. Are wealthy children really more gifted athletes across the board?
3) The non academic rating might be influenced by some of the wealthier kids being able to put more things on their resume due to not having to hold down a job, having the wealth to pursue more interesting and diverse activities, the ability to engage collegiate counselors to help buff up their essays and resumes, etc.

I'm not sure anyone could read the study and conclude that schools are taking children from wealthy families because they come from wealthy families. All I would conclude is that children from wealthy families tend to have characteristics that these schools want, and are obviously more likely to be legacies. And, as the study said, legacy status for an Ivy Plus school didn't help at any school other than the school of the parent's attendance.

In my "N" of 1, I have found myself really scratching my head at this entire process. My son is in the top 0.25 percentile (based on the congratulatory letter sent to him by the CEO of the ACT) on his standardized test, and above the top 1% in our state for PSAT based on his NMF status. He is a legacy of an Ivy as well. The deferrals and even outright denials he has received to date have left me absolutely dumbfounded. And he has activities in spades. The only kid in his class who has a near Ivy acceptance had the "hook" of being a first generation student. Quite the opposite of coming from a "wealthy" family. I don't pretend to know what these schools are looking for in students these days, I am just surprised at what I am seeing this year and what I have heard from other parents in years past. Lots of extremely academically gifted kids being rejected by lots of schools and other less gifted kids getting in.

I don't purport to know what schools are looking for these days, but again I am surprised at what my son hasn't been offered at this point.

double b said:

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That's really interesting to see to Vandy and Rice on that list. In my opinion, those two are fairly well known for giving out merit-based aid, which is extremely rare for many of the very selective schools. Also, it is well-known that if the student's family is among the top 1% income earners, then your admission odds are significantly enhanced.

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Yes, because they pay the freight for the affirmative action admits that the schools REALLY want. If my son gets into Rice as a straight, white male, it will be because they want me to effectively pay for not only my kid, but also somebody else's, less qualified and poorer kid. That's the only way $82k in tuition makes any sense - The affluent white parents pay for their kid plus a tag-along affirmative action admit.

You might say "Hold on Buck, how do you know that the kid getting a need based scholarship is not white?". The answer is that it's pretty well documented that hardly any working class whites are ever admitted to any of the elite schools. Whites are only admitted to pay the bills and are then treated like crap by the ungrateful left wing administrations that are milking them dry.

Kool said:

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In my "N" of 1, I have found myself really scratching my head at this entire process. My son is in the top 0.25 percentile (based on the congratulatory letter sent to him by the CEO of the ACT) on his standardized test, and above the top 1% in our state for PSAT based on his NMF status. He is a legacy of an Ivy as well. The deferrals and even outright denials he has received to date have left me absolutely dumbfounded. And he has activities in spades. The only kid in his class who has a near Ivy acceptance had the "hook" of being a first generation student. Quite the opposite of coming from a "wealthy" family. I don't pretend to know what these schools are looking for in students these days, I am just surprised at what I am seeing this year and what I have heard from other parents in years past. Lots of extremely academically gifted kids being rejected by lots of schools and other less gifted kids getting in.

looking for these days, but again I am surprised at what my son hasn't been offered at this point.

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I will say that this year has left me scratching my head more than a few times with the responses I have also seen. For instance, I had a client whose resume, top to bottom, was stronger than the one I had from last year. Last year, the client was admitted into both TAMU Mays Honors (1/4 academic scholarship) and UT McCombs Honors (1/2 academic scholarship). This year, my client was admitted into Mays Business Honors but given Liberal Arts at UT.

Here's another example from another independent education consultant.

• ranked top 1% at a well-ranked TX high school
• 1580 SAT (800 Math)
• State Robotics team
• Summer Internship with Silicon Valley CS company
• Created his own software development app

TAMU: Brown Scholars with Full Academic Scholarship
UT: Denied from Computer Science, admitted into Liberal Arts

This is the first time in all my years that I am seeing such a disparity in the decisions being made and believe it is the result of a few factors.

• Application Numbers: The numbers keep growing each year. Most students searching nationally will apply to at least eight schools. The bulk of the students are applying to 12-15 colleges.
• Test-optional: This is mucking things up, and I'm glad to see that some colleges are bringing test scores back. Regardless of anyone's thoughts, test scores coupled with a solid high school resume are a strong indicator of academic and college success. Now, there are outliers, but from a statistical and probability standpoint, it is hard to refute the evidence. Also, with the return of test scores, you see these application numbers go down.
• Rising Costs of Tuition: Not all colleges review applicants on a need-blind basis, which is ultimately what this article is referencing. These schools need families who are willing to pay the full freight, and trust me, there are plenty who will because of the name of the school. So, applicants who are comparable to their counterparts are more likely to receive a favorable decision if their family can afford it.

Fortunately, TAMU is still somewhat sane with its admission decisions, but it is becoming more challenging each year. For those who are genuinely working toward Ivy-plus or T20 school, it is a dog fight for those schools. I strongly recommend that those families start early, like with the beginning of 9th grade, to prepare for them.

double b said:

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For those who are genuinely working toward Ivy-plus or T20 school, it is a dog fight for those schools. I strongly recommend that those families start early, like with the beginning of 9th grade, to prepare for them.

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From my experience (similar to above I have an N of 1 so far), this is probably good advice. I'd also recommend taking a step back and deciding if that is truly important, though. As a nation we've completely overvalued Ivys/T20s/etc. And spending 300K+ (or worse, taking out that much in student loans) seems insane to me.

scrimp said:

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double b said:

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For those who are genuinely working toward Ivy-plus or T20 school, it is a dog fight for those schools. I strongly recommend that those families start early, like with the beginning of 9th grade, to prepare for them.

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From my experience (similar to above I have an N of 1 so far), this is probably good advice. I'd also recommend taking a step back and deciding if that is truly important, though. As a nation we've completely overvalued Ivys/T20s/etc. And spending 300K+ (or worse, taking out that much in student loans) seems insane to me.

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I think what needs to be understood here is that many families will absolutely pay the price tag of 300k or more.

I am very upfront from the start with the families I choose to work with, and the vast majority completely understand the financial commitment. For many, the parents have already secured this type of money in their child's 509 accounts and are waiting for an opportunity like this. So loans are not even a consideration for them.

scrimp said:

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double b said:

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For those who are genuinely working toward Ivy-plus or T20 school, it is a dog fight for those schools. I strongly recommend that those families start early, like with the beginning of 9th grade, to prepare for them.

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From my experience (similar to above I have an N of 1 so far), this is probably good advice. I'd also recommend taking a step back and deciding if that is truly important, though. As a nation we've completely overvalued Ivys/T20s/etc. And spending 300K+ (or worse, taking out that much in student loans) seems insane to me.

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But yes, I do agree with your thought process. If you are family that will depend on a majority of loans to finance your student's college education, then these schools are most likely not a good fit for you. That is, unless you are willing to mortgage your home.

The rising cost of college is creating a very unfortunate situation in that is creating a larger gap between the percentage of students who are considered "low-income" and "high income" homes, and that gap is only widening.

• Rising Costs of Tuition: Not all colleges review applicants on a need-blind basis, which is ultimately what this article is referencing. These schools need families who are willing to pay the full freight, and trust me, there are plenty who will because of the name of the school. So, applicants who are comparable to their counterparts are more likely to receive a favorable decision if their family can afford it.

Is this measured through the FAFSA, or are there other ways in which these schools measure this?
Just curious.

When I was a high schooler, I was 100% certain that my parents would give me zero dollars for school. That included med school. I didn't bother to apply to any "fancy" schools, as they would have just put me into even more debt. My wife went to an Ivy, but she had to pull out when her family went bankrupt. I believe her first undergraduate degree was, still, from that Ivy.

Through LOTS of schooling on my part and early planning and saving, I am able to be in a position to include more choices for my son. And he, in turn, has performed and done what I have asked of him. Without getting too political, it seems so far that he's being pushed down for other reasons, none of his own doing. I have no proof (other than what my eyes see and what the plaintiffs showed in the Asian students vs. Harvard and UNC SC case) of this, it just seems as if it's "business as usual" in the college application arena. They're not really seeking merit. They're seeking donors, sports victories, and fodder to virtue signal about how diverse they are. My son is already admitted to two state schools, it's just that they aren't great for his area of academic interest.

Kool said:

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Is this measured through the FAFSA, or are there other ways in which these schools measure this?
Just curious.

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That information is collected through a variety of methods.

• FAFSA
• CSS Profile (Primary Method)
• Response requesting "Consideration for Financial Aid"
• Address/Zip Code
• Parent's Education/Occupation

There are a lot of things to unravel on this and no perfect answer. I did hear about a recent study that showed the group far most likely to be rejected at Ivies or near Ivies is the Top 10-1%. The Top 1% and those with financial need are far more likely.

Now part of that is the Top 1% tend to have the most Legacies, athletes/musicians (Most are D3 Schools so only 1 Sport is Scholarship and they have lots of exotic sports that tend to only have rich kids playing them), and the most interesting EC's both because of elite prep schools and opportunities created by wealth or family connections. On the other extreme most poor kids or lower middle class kids simply don't even think to apply so you only get the best of the best. Unfortunately many of them still struggle the most. It's not only a huge academic shock to go from a crappy high school where they dominated and maybe never even took an AP class to an Ivy it's an even bigger cultural shock. To go from a very modest or poor background and suddenly be at a hyper cosmopolitan school with a completely different dynamic is hard for any kid to overcome.

So that leaves the Upper Middle Class kid. They often have great test scores and grades to go with a strong resume but they don't have as much as the kid from Phillips Exeter or Choate or Trinity, They know the value of the Ivy Plus Degree so a lot of them apply but most don't understand how to truly differentiate themselves or just how competitive it really is. They have the fewest advocates as well. It's hard to stand out as an upper middle class kid and in the end most of the people making the admissions decisions are liberal arts majors who are going to have a natural bias even if they don't intend to. One of the best Podcasts I listened to for instance on College Admissions said "When writing your essay realize that what you need to do is write something that a person sitting on their couch in their mid 20s who is reading 50 applications that day and how you can stand out." Who actually reads them? It's not the new hires straight out of school and it's not the Directors. It's the one's in between. So who takes those jobs? It's mainly Liberal Arts majors that worked for the school and then after graduation got offered a job and it seemed like a better option than whatever else they had available.

They don't even intend to be looking to exclude but they are going to naturally gravitate towards people that do things that interest them and are more unusual. It's not a matter of qualifications really. They already have far more qualified candidates than they could ever accept. If that was the bar they would accept 50% or more instead of 10% or less. So the "stats" around grades and test scores are not very relevant when everyone has a 4.0 and 1500+ SAT or thereabouts.

If you take the Top 20 or so Private schools they average about 2k in terms of incoming Freshman (most are definitely less, a few are higher). So that's 40k or so slots that you have about 3.5 million people graduating from High Schools every year. So about .011 Percent. That of course doesn't account for foreign students, the Ivies average about 12%.

The end message? It's fun to think about the elite schools and top kids are competitive. They want to feel like they are the best. That said the focus should be on what is the best fit for them and not who has X or Y rating. You have to do your own research and look for what really matters to you and your kid. It's also eye opening to go to visit some of these schools and talk to the departments and honestly it makes you scratch your head at times on how they come up with the rankings. You need to do what's right for you and block out the noise as much as you can.

As an aside, Texas seems to be the new cool school for elite kids from OOS to apply to along with the other Top Public schools (Michigan, UVA, UNC, GT, Illinois, The UC schools, etc) and ESPECIALLY the highly rated Comp Sci schools. That's why a lot of State of Texas kids are getting in to Texas as Auto Admits for Top 6% but NOT getting into Engineering. There are high performing Asian kids going into Comp Sci like crazy making it hyper competitive. I mean at A&M Comp Sci is ranked 33 in US News but it is the most restrictive Engineering Major in terms of Freshman getting admitted to upper level. Biomedical Engineering is also not as highly ranked (which makes zero sense btw with the salaries, placement rates to Med School, and size and facilities of the program) but is the 2nd most competitive to get into. Texas is #8 in Comp Sci so they get a ton of elite level applications from MIT or Ivy kids that are using it as a Safety. Eventually that will come around to A&M too, as of now Texas has the "new hotness" thing going for it. So many of these kids just pick the Top 25 schools and apply to all of them now, it's pretty easy to do.