Cornell alumni and students who received financial aid anytime between Fall 2003 and February 2024 are beginning to receive payments from a suit alleging Cornell and 16 other institutions conspired to price fix tuition and aid.
The suit, Corzo et. al v. Brown University et. al, alleges the universities worked together to favor wealthy students and reduce financial aid to students through an organization known as the 568 Presidents Group — ultimately violating the Sherman Antitrust Act, which prohibits entities from cooperating to limit competition.
The group was named for an exemption to the Sherman Antitrust Act that allows need-blind institutions to collaborate on financial aid principles to make financial aid similar among universities.
In the lawsuit, a group of student plaintiffs alleged that the universities did not act need blind, instead considering potential admits’ ability to pay, and collaborating to set their aid at similar levels, thereby limiting the choices a student might have in receiving financial aid. Overall, the plaintiffs said, aid was lower than it would have been without the collusion.
On July 2, U.S. District Judge for the Northern District of Illinois Matthew Kennelly ordered the first distribution of settlements to be sent out to affected alumni and students, Cornellians included.
Though Cornell has not yet settled, students and alumni are receiving payments because, under antitrust law, any co-conspirator is held liable for the overall harm, regardless of if a specific university has settled or not.
The payments are being sent from a roughly $319 million fund which twelve schools that have settled — including Duke, Yale, Brown and others — paid into.
“The claim money came at a perfect time when I could benefit the most,” Xiaoyu Duan ’21, a second-year graduate student relying on scholarships, wrote to The Sun. “As a first-generation low-income student, I appreciate how generous Cornell was during my undergraduate years.”
John Wang ’24 received $3,500, and wrote that he felt the amount was fair.
But, “settlement size is not the same thing as an admission of fault by every named defendant, and payment from a fund is not proof of any individual school’s guilt,” University of Buffalo law professor Christine Bartholomew, who specializes in procedural law, wrote in a statement to The Sun.
Cornell is now one of only five institutions, including the University of Pennsylvania, Massachusetts Institute of Technology, Georgetown University and the University of Notre Dame, that have continued litigation as the case hurls towards a possible November trial.
So, why hasn’t the University settled?
“A settlement, even one that disclaims wrongdoing, reads publicly as capitulation,” Bartholomew explained. “A defendant confident in its legal position may prefer vindication at trial over a settlement that will be reported as an admission in all but name.”
The remaining universities contend that their processes were need blind, which they argue protects them under the Section 568 exemption. That point would need to be proven at the trial.
A trial, though, is unlikely. Only 5% of class action suits actually proceed to trial, according to a recent study from Lex Machina.
If Cornell is found not guilty of the conspiracy, students who have received payments will not be affected. However, if Cornell is found liable, students may be eligible for further payments directly from Cornell.
A University spokesperson declined to comment.
Atticus Johnson is a member of the Class of 2028 in the College of Arts and Sciences. He is a news editor for the 144th Editorial Board and can be reached at ajohnson@cornellsun.com.
