Johns Hopkins and Caltech Settle Antitrust Lawsuit for Combined $35.3 Million


Case has netted more than $300M from universities so far.


In a significant development within the higher education sector, Johns Hopkins University and the California Institute of Technology (Caltech) have agreed to settle a federal antitrust lawsuit for a combined total of $35.3 million. This settlement is part of a broader class-action lawsuit involving 17 prestigious universities accused of colluding to limit financial aid and inflate costs for students.

Background of the Lawsuit

The lawsuit, filed in 2022, alleges that the universities, as members of the now-defunct 568 Presidents Group, engaged in illegal price-fixing by collaborating on financial aid formulas. This alleged collusion aimed to reduce competition and keep financial aid packages lower than they might have been in a truly competitive market. The plaintiffs, comprising students and graduates, argued that these practices disproportionately impacted low- and middle-income students who rely heavily on financial aid.

Details of the Settlement

Johns Hopkins University will pay $18.5 million, while Caltech will contribute just under $16.8 million to the settlement fund. Both institutions have denied the allegations but have agreed to the settlement to avoid prolonged litigation. The settlements are pending judicial approval and will bring the total settlement amount from 12 colleges to just under $319 million[1][2].

Implications for Higher Education

This settlement highlights ongoing concerns about accessibility and fairness in higher education. The lawsuit underscores the need for transparency and competition in financial aid practices to ensure that all students have equitable access to higher education opportunities. The case has also drawn attention to the rising costs of tuition and fees at private institutions, which have increased significantly over the past two decades[2].

[1]: Inside Higher Ed [2]: MSN News


References

[1] Johns Hopkins, Caltech Settle in Antitrust Lawsuit

[2] Colleges to Pay $320 Million in Lawsuit: Here’s Who Is Eligible for Payment

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