Forty of the United States' top private universities are under attack after a lawsuit was filed accusing the institutions of conspiring to charge too much for their education.
According to the lawsuit, these universities disadvantage applicants from divorced or separated homes by including the noncustodial parent's financial history when determining financial aid packages.
Dozens of other top schools, including Harvard, Cornell, Dartmouth, Brown and Yale, were targeted Monday in a class-action lawsuit filed by Boston University students and Cornell University alumni in the U.S. District Court for the Northern District of Illinois.
The lawsuit, which seeks $5 million in monetary damages and a court order to stop the alleged conspiracy, also includes the College Board, the nonprofit that developed the financial aid system the schools allegedly used.
Universities engaged in “concerted action” by requiring an applicant’s non-custodial parent, i.e., a student they do not primarily live with, to provide their financial information to qualify for non-federal financial aid, the lawsuit states. .
The class action lawsuit also alleges that the College Board requires schools to take this information into consideration when determining financial aid allocations, regardless of the noncustodial parent's actual involvement in the applicant's education or financial aid.
“Students were informed that there were no exceptions to the requirement – even though a divorce court order had been issued regarding college expenses,” the lawsuit states.
Universities make financial aid offers based on the financial situation of the applicant's custodial and non-custodial parents. This offer, the case argues, is based on a family contribution from both parents, even if one parent does not intend to contribute to the tuition fees.
The lawsuit adds that the College Board procedure was created by individuals associated with the university that implemented it. For example, the lawsuit alleges that the current chairman of the College Board's Financial Aid Council works at Columbia University and that Harvard's director of financial aid was the nonprofit's president.
According to Hagens Berman, the law firm representing the lawsuit, the alleged “price fixing” agreement increased the cost of tuition by about $6,200 compared to top schools that did not participate in the College Board system.
“The financial burden of college cannot be overstated in today's world, and we believe our antitrust lawyers have found a major impact on the rising cost of higher education,” Steve Berman, managing partner and co-founder of Hagens Berman, the law firm behind the filing, it said in a statement.
“Those affected – particularly college applicants from divorced homes – never thought the alleged scheme was effective, and the students ended up receiving less financial aid than they would have in a fair market,” Berman continued.
The College Board's push to include financial information about noncustodial parents began in 2006, the lawsuit says, and did not include consideration of whether that parent would contribute to the student's education.
The College Board said in a statement that it has received the lawsuit and is reviewing it, but that it is “confident that we will prevail in this lawsuit.”
New York University, which was among the universities cited, told NBC News that the lawsuit lacked credibility. “This lawsuit is without merit and NYU intends to vigorously defend itself and its financial aid policies and procedures,” NYU spokesman John Beckman said in a statement.
Harvard, Cornell, Columbia and Georgetown Universities told NBC News they could not comment on pending litigation.
Brown, Dartmouth, Yale, Fordham and the University of Pennsylvania did not respond to NBC News' requests for comment.
