$284 Million College Financial Aid Class Action Settlement

A total of $284 million class action settlements have been reached involving seventeen universities. Ten large universities have agreed to the financial aid, and more universities may agree, resulting in a larger settlement fund. The financial aid class action lawsuit centers around certain colleges providing a settlement to students who received need-based financial aid, but still had outstanding expenses while attending these universities.

https://www.financialaidantitrustsettlement.com/

 

Sounds like it was cheaper for them to settle than to continue to pay expensive lawyers. If it is true that they were price fixing, then it's yet another example of why free market theories fail. Competition doesn't always result in self-regulation. Seemingly competing organizations can and have conspired to fix prices and wages.

 

I think the non-profit status of schools that price fix should be investigated. Price-fixing is profit driven, and these schools should not be.

 

There is very little actual difference between for-profit and not-for-profit schools. Either can be very aggressive when it comes to recruiting and pricing. I think it is a mistake to paint either sector with a broad brush, even though I think the for-profit sector does attract more bad actors. But both require schools to raise revenues, control costs, recruit students, underpay adjuncts, etc.

 

Yes, there are similarities, but Non-Profits are held to a higher standard.

 

The outcomes aren't the same either. While these Ivy Plus schools were allegedly price fixing (we don't know that they actually were), their students still graduate with little debt, their students receive a lot more aid than they would have at most other colleges and universities, some of these schools cover all costs for students whose households make less than $125k or $150k, and they don't intentionally recruit unprepared students knowing that they have a low chance of graduating. These Ivy Plus schools also devote far more resources to education and pay their faculty significantly more than for-profit colleges do. For-profit colleges devote more money to marketing.