Financial aid settlement form released

By Belinda Zhu     9/25/24 12:24am

Claim forms for the class action financial aid “cartel” lawsuit Rice settled were released Sept. 13. The suit alleged that Rice and 16 other top universities “illegally conspired” to restrict financial aid. Students can submit a claim on the court-approved settlement website https://financialaidantitrustsettlement.com/submit-claim by the Dec. 17, 2024 deadline. 

Rice students and alumni that have matriculated since Fall 2003 may qualify for the settlement if they are U.S. citizens or permanent residents who received partial need-based financial aid. Those who received full aid aren’t eligible, as the alleged limits wouldn’t have affected them.

The amount of money that can be claimed depends on various factors including the net price of the university a claimant attended, the dates of attendance and the number of claims filed, the settlement website says. The Angeion Group estimates that if half of the 200,000 eligible people submit timely claims, the “average claimant” will receive about $2,000.

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Antitrust laws generally prohibit “anticompetitive practices” that could deny consumers lower prices or, in this case, higher financial aid packages. The goal, according to the Federal Trade Commission, is to “keep prices down and quality up.”

Federal law provided certain universities an exemption under Section 568 of the Improving America’s Schools Act of 1994. This allowed groups of schools to use “common principles of analysis” for calculating financial aid, as long as all participating universities were need-blind. The exemption expired on Sept. 30, 2022, and the 568 Presidents Group was dissolved soon after, taking effect on Nov. 3, 2022.

However, some universities were not fully need-blind. For example, Vanderbilt University was accused of “wealth favoritism” by considering the financial status of waitlisted students when determining their admission.

A class action lawsuit was filed in 2022. It claimed the 17 universities worked together on “principles” for determining financial need, allowed under Section 568 of the Improving America’s Schools Act of 1994 for need-blind institutions. While they did not accuse Rice of being need-aware, they argued that the Section 568 exemption only applied to collaborations among fully need-blind universities. They claimed that Rice should have known some members of the 568 Presidents Group were need-aware, and thus, by participating, Rice was involved in illegally limiting financial aid.

“Rice is committed to transforming the lives of students and supporting Owls of all socioeconomic backgrounds through its generous, loan-free financial aid programs and need-blind admissions,” Jeff Falk, the assistant vice president for strategic communications, wrote to the Thresher at the time of the settlement in Feb. 2024. “The university never conspired to decrease aid for its students.”

Rice is one of ten universities, out of the 17 involved, contributing to the $284 million settlement, which will provide payments to students who received partial need-based financial aid. The District Court has entered an order preliminarily approving the settlement for all 17 universities.

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