The proposed class-action lawsuit, filed Sunday in Illinois federal court on behalf of five former students who attended some of the universities, alleges the schools participated in a price-fixing scheme involving the formula by which financial-aid awards for students are calculated.
Up to 170,000 former undergraduate students who also had financial aid held back by the schools named in the suit could join the case.
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Caltech said in a statement that it is "currently reviewing the lawsuit and cannot comment on the specific allegations. We have confidence, however, in our financial aid practices.''
According to the lawsuit, the defendant universities "have participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition, and that in fact has artificially inflated the net price of attendance for students receiving financial aid.''
The plaintiffs allege a violation of the Improving America's Schools Act of 1994, which says that universities can collaborate when they develop their financial aid formulas, but only if they do not consider applicants' financial need in their individual admission decisions.
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Other universities named as defendants include Columbia, Yale, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn and Vanderbilt.
The lawsuit seeks to prevent future students from suffering alleged "injuries that the ongoing conspiracy has inflicted,'' the document states.
City News Service, Inc. contributed to this report.