Judge Rejects Claims of Financial Aid Collusion Among Top Universities
A federal judge has officially dismissed a class-action lawsuit that accused Columbia University, along with several other prominent private universities and the College Board, of illegally coordinating to inflate tuition costs. The lawsuit, specifically focused on students from divorced families, claimed these institutions violated antitrust laws by their financial aid practices.
The case, titled Hansen v. Northwestern University et al., was initiated in October 2024 by Maxwell Hansen, a student at Boston University, and Eileen Chang, a former student at Cornell University. They argued that the universities consistently used noncustodial parent (NCP) financial data to calculate aid awards, a practice that allegedly stifled competition and prevented any single institution from offering more flexible or generous financial assistance. The plaintiffs estimated that this alleged coordination led to an average tuition increase of $6,200 for students from separated or divorced families.
Court Finds Allegations Lacked Plausibility
U.S. District Judge Sara L. Ellis dismissed the case without prejudice, meaning the plaintiffs could refile with stronger evidence. In her ruling, Judge Ellis stated that the allegations were “conclusory and lacking in plausibility,” emphasizing that the complaint failed to provide adequate detail to demonstrate an illegal agreement among the universities.
“Nothing in Plaintiffs’ complaint suggests that the University Defendants exchanged their own internal financial aid decision-making processes or guidelines,” Judge Ellis wrote, as reported by the Columbia Spectator. “Nor does the complaint allege that the University Defendants all agreed on the same exact formula for calculating financial aid.”
The court also dismissed claims against universities located outside Illinois due to a lack of personal jurisdiction. Judge Ellis clarified that a mere similarity in financial aid policies across institutions does not, by itself, constitute collusion under federal antitrust law.
The College Board’s Role Under Scrutiny
The lawsuit also implicated the College Board, specifically its CSS Profile system, which Columbia and other private institutions use to gather detailed financial information from families. The plaintiffs contended that coordination was facilitated through the College Board’s CSS Financial Assistance Assembly Council, which focuses on financial guidance and policy research for students. Notably, Jessica Marinaccio, Columbia’s dean of undergraduate admissions and financial aid, chairs this council and serves as a College Board trustee.
Universities Remain Silent, Congressional Interest Peaks
Following the dismissal, Columbia University declined to comment, and the law firm representing the plaintiffs, Hagens Berman Sobol Shapiro LLP, did not respond to inquiries.
Despite the court’s dismissal, the allegations have garnered significant attention from Congress. In April 2025, both the House and Senate judiciary committees formally requested communications related to admissions and financial aid practices from Columbia and other implicated universities, dating back to 2019. These requests cited potential violations of the Sherman Antitrust Act. Legal experts indicate that such congressional inquiries, while not determining liability, can intensify scrutiny on institutional policies.
Columbia’s History of Financial Aid Scrutiny
This isn’t Columbia University’s first encounter with financial aid-related legal challenges. In 2024, the university paid $24 million to settle a separate class-action lawsuit. That case alleged Columbia had misrepresented its financial aid policies as “need-blind” for admitted students. While the current case raised similar questions about fairness and transparency in aid distribution, the court ultimately found insufficient evidence to prove anti-competitive coordination.
Understanding Legal Standards Under the Sherman Act
Under Section 1 of the Sherman Antitrust Act, plaintiffs must demonstrate more than just parallel conduct among defendants. They are required to prove the existence of a “contract, combination, or conspiracy” that unreasonably restrains trade. Judge Ellis concluded that the plaintiffs did not meet this stringent legal standard, reiterating that independent, similar policy decisions by universities are not inherently illegal.
What’s Next for the Plaintiffs?
The plaintiffs have not yet announced whether they intend to appeal the dismissal. The ruling, however, does leave open the possibility for them to revise their complaint and attempt to meet the court’s standard for plausibility. Legal analysts suggest that even without a successful lawsuit, such cases often spark broader discussions and can prompt universities to adjust their policies to avoid any perception of uniformity or anti-competitive behavior. (Based on reports from the Columbia Spectator.)