The University of Chicago has agreed to settle an antitrust lawsuit that accused the University of conspiring with 16 other highly selective private institutions to limit financial aid packages to students. It is the first institution named in the lawsuit to agree to settle.

The agreement was announced on Wednesday, April 19.

“Plaintiffs and the University of Chicago will now, as quickly as reasonably possible, work to negotiate and finalize a settlement agreement, which plaintiffs would then file with the Court as part of a motion for preliminary approval of the settlement,” said Eric L. Cramer, an attorney representing the plaintiffs, in a statement to the presiding judge.

The lawsuit, filed in January 2022, stemmed from a class action complaint on behalf of alumni from 17 private universities, including Brown, Columbia, Duke, Northwestern, and Yale. The plaintiffs allege that the defendant universities sought to reduce competition amongst themselves by adopting uniform financial aid policies. 

All of the defendants were at one point members of an association known as the 568 Presidents Group. The association is named after Section 568 of the Improving America’s Schools Act, which allowed universities to use the same formula for determining financial aid for all students as long as they adopted need-blind admissions policies.

The University was a member of the 568 Presidents Group from 1998 until 2014. The group was officially dissolved on November 4, 2022, after Congress allowed the Improving America’s Schools Act to expire. 

All former members of the 568 Presidents Group awarded financial aid primarily based on need rather than merit. The members met annually to determine a formula for calculating financial need. The result was that students received similar or identical aid packages from most members. 

The plaintiffs characterized this arrangement as a “price-fixing cartel.” They contend that the practices of the defendants did not fall under the Section 568 exemption because their admissions policies were not truly need-blind. They claim that nine of the defendants disqualified themselves from the exemption by giving preferential consideration to the children of donors or by considering financial need when admitting students off waitlists. The remaining defendants, including the University, used the same financial need formula as the other defendants, thus implicating themselves in the violation. 

The lawsuit alleges that the members of 568 Presidents Group deliberately sought to reduce their financial aid awards while increasing their tuition and living costs. The plaintiffs estimate that 200,000 students may have received reduced aid packages.

In August 2022, the 17 defendants filed a motion to dismiss the case, but the presiding judge denied the motion. Concurrently, the University filed a separate motion to dismiss the individual case against itself, citing its withdrawal from the 568 Presidents Group in 2014. That motion, too, was denied. 

The lawsuit represents all UChicago alumni who received financial aid between 2003, the year the University adopted the 568 Presidents Group formula, and 2014, when the University withdrew from the group. 

The University and the plaintiffs have not yet negotiated the terms of the settlement agreement. After negotiation, the agreement must be approved by the presiding judge before it may be finalized.