Dartmouth Caught in Lawsuit

Chicago, IL — A lawsuit filed in January takes aim at sixteen universities for financial aid  price-fixing. The suit claims that university administrations colluded over the course of several years to reduce financial aid awarded to enrolled students. 

If the public wasn’t yet convinced, it seems that some of the country’s most reputable institutions aren’t as virtuous as they appear. The sixteen schools implicated — Brown, the California Institute of Technology, Columbia, Yale, Cornell, Duke, Emory, Georgetown, M.I.T, Northwestern, Notre Dame, the University of Pennsylvania, Rice, Vanderbilt, and yes, dear old Dartmouth — do not consider a student’s ability to pay in the admissions process. As a result, they are legally allowed to collaborate on financial aid calculation under Section 568 of the Higher Education Act. In reality, the suit claims, nine of the universities create measures to skirt their need-blind policy. Vanderbilt and UPenn, for example, consider finances for wait-listed students. Other schools give preference to children of wealthy donors in a move that is neither shocking nor legal, as the case claims. “Privileging the wealthy and disadvantaging the financially needy are inextricably linked… They are two sides of the same coin.” 

Pundits compare this case to a 1990s Supreme Court ruling between the Ivy League, MIT (notably not Ivy League), and the Antitrust Division of the Department of Justice. The case accused MIT of price fixing its need-based scholarships. In response, the school deemed its scholarships as nothing more than charitable gifts that could be trimmed at will. The decision? An agreement that colleges could individually establish systems of need-based aid, but that “collusive establishment of a policy” was to be illegal. Fast forward to 2022 and this settlement appears particularly relevant for the case at hand. 

The complaint cites claims from admissions officers that wealthy applicants are routinely favored in the process. In one instance, Dartmouth is noted for admission of “up to five percent” of the student body through a special list of students created by the development office. These practices are commonplace, the plaintiffs argue. While it could be noted that the wealthy have always faced preferential treatment in admissions, this case draws upon a key paradox: preference for the wealthy under legal price collusion for being “need-blind.” Critics claim that colleges could engage in one practice or the other, but not both.

Dartmouth’s recent expansion of need-blind admissions for all international students has been highly praised and what many consider a long overdue step. This makes the College one of only six institutions in the country to be need-blind for every undergraduate applicant. But does it actually matter in light of this lawsuit? The current behavior towards and treatment of domestic applications might very easily be extendable to international applicants. If being need-blind for all these years still led to the acceptance of the wealthy and price-fixing for the rest, how are we to expect anything different now that international students are put on this “level” playing-field? In Dartmouth’s past and peer institutions’ present (other than the five others with need-blind admissions for international students), they could legally consider the international students’ ability to pay and simply pick the wealthiest applicants if they so choose. Although that option is now legally gone, it could easily be replaced with this price-fixing. 

However, the story does not end here when it comes to suspect admissions practices. There are the wealthy, whose children do not require financial aid and can afford the almost $90K price tag of an elite education. Then there are the ultra-wealthy. These are the men and women who annually donate millions of dollars to these institutions, often just to their alma-mater or one elite college of their choice. These top universities do not deny considering legacy in the application process. Dartmouth admissions acknowledges that about nine percent of the most recent class, that of 2025, were legacy students. However, the truth is that many are not just any-old children of these universities’ alumni, but those at the intersection of legacy status and large donations. Leaked Harvard emails from 2013 in fact reveal admissions employees discussing students whose families made large monetary donations to the University. 

Apart from the legality behind this story, it matters because it influences the composition of our Dartmouth community. In fact, 21% of current Dartmouth students come from the top 1% of households by income in the U.S., while only 2.6% of students come from the bottom 20%. However, the College, in the same way that peer institutions do, loves to flip the script on these statistics in an attempt to paint Dartmouth admissions as being virtuous. The department will give you all sorts of numbers to show you how “well-crafted” the student body is, but they certainly don’t advertise the less palatable ones.