Photo Courtesy of Vanderbilt University via Flickr

Almost a month has passed since the filing of a class-action lawsuit against Vanderbilt and a number of other top universities for colluding to fix tuition prices and compromising the need-blind admissions process. I sat down with Professor Rebecca Allensworth from Vanderbilt Law School, who specializes in antitrust law, to explain the case and its validity. 

 The following questions and answers reflect the content of the interview and have only been edited for clarity. 

Gupta: What most students understand of the current case is that schools are withholding financial aid and could be giving more. Is there more to the case than that? 

Allensworth: I think that accurately describes the harm that the case alleges, but it is a little bit complicated how the case says the harm comes about. This is where antitrust comes in. The case is about the schools conspiring to not compete using financial aid packages. A student’s family’s ability to pay gets subtracted from their financial aid package so these schools can save money by exaggerating a family’s ability to pay. But if they were fully competing for students, they may want to do the opposite–to understate your family’s ability to pay and offer you more financial aid to attract you to their school. The plaintiffs say that the schools shared information about families’ ability to pay and all agreed on a kind of formula that kept aid packages artificially low. That’s the alleged antitrust violation, but the schools say they have immunity from the antitrust laws.

Gupta: Do you think the case will be successful? Do you think the claims mounted are valid? 

Allensworth: It really comes to whether or not they have this immunity from antitrust. It’s a law created by the federal government that exempts universities from antitrust as long as they have a need-blind admissions policy. The suit alleges the schools do not have a need-blind admissions policy. Having read the complaint, I think that their allegations that these institutions aren’t immune are at least facially plausible, but I would want to know a lot more about the schools’ admissions policy and how this immunity has been interpreted by the courts before saying anything more. All we have is the complaint right now – it’s just one side of the story.

Gupta: Should the antitrust immunity clause be renewed?

Allensworth: I think that shielding these schools from antitrust liability for some admissions decisions is a good thing to do because there is a solid theoretical argument that if you force these schools to compete fully they won’t have need-blind policies, and without those policies, the student body would end up less diverse economically and racially. I think that it’s appropriate to say that those goals overcome antitrust concerns in these circumstances. The immunity as it’s currently designed probably isn’t perfect. Will it be renewed? I would think so, and one thing that’s interesting about this suit is that it may put extra pressure on Congress to design it better and allow it to function as it was intended.