Ivy League Schools Accused of Operating as a 'Pricing Cartel'

Defining Collusion in Higher Education

• ⚖️ Collusion is defined as competitors agreeing to fix or control prices, potentially by limiting supply, sharing information, or dividing markets.
• 🏫 The Ivy League institutions are accused of a long history of colluding, dating back to the 1958 formation of the Ivy Overlap Group.

Historical Price-Fixing Mechanisms

• 🤝 The Ivy Overlap Group created a common formula to ensure admitted students paid the same maximum price, regardless of the institution chosen.
• 📜 Operating under an expired antitrust exemption, the 568 President's Working Group also established common formulas to prevent price competition among elite institutions.

Impact on College Costs

• 💰 The opaque financial aid system and alleged collusion enable Ivy League colleges to charge higher prices than in a competitive market.
• 📈 A billion-dollar consulting industry reportedly assists these institutions in determining and charging families the maximum affordable amount.

Ongoing Litigation and Enforcement Gaps

• 🏛️ Current litigation in the Northern District of Illinois is examining whether institutions continue to use revenue-maximizing formulas for financial aid awards.
• 💸 Twelve of seventeen member institutions have settled for a total of $320 million, with documents in the ongoing case potentially challenging remaining defendants.
• 🔍 Enforcement gaps have allowed these institutions to effectively operate as a pricing cartel, with students often feeling captive to the price once admitted.

The Value of a Degree

• 🎓 The estimated cost of attendance at Brown for the 2025-2026 academic year is nearly $97,284, valuing the institution's degree at almost $400,000.
• 🤔 Questions are raised about whether this valuation is empirically justified, especially for students who may struggle to afford such costs upfront.