Suit: Colleges Exploited Students of Divorce Seeking Financial Aid

A current Boston University student has teamed up with a Cornell alum to go after dozens of elite private universities that they say conspired to overcharge students, including by exploiting those who had divorced parents. Reuters reports that the proposed class-action lawsuit filed Monday in Illinois names 40 top schools—including Harvard, Yale, Dartmouth, Columbia, Northwestern, NYU, and Stanford—that allegedly took part in the scheme. It also names as a defendant the nonprofit College Board, which provides the financial aid form at the center of the federal complaint.

The suit alleges the College Board conspired with the colleges in question since 2006 to use the rather involved CSS Profile form, which many elite schools use, to gather detailed data on students' financial status, then include the assets of the noncustodial parent in divorce cases in determining what financial aid a student could receive in the form of scholarships—even if that parent didn't contribute money toward their child's education, per the Washington Post. The paper notes that more affluent private institutions tend to ask for the CSS Profile from families; the more common FAFSA form used most in higher education asks only for information on the assets of the custodial parent for financial aid purposes.

The suit notes that "students were told there were no exceptions to the requirement" that they include their noncustodial parent's assets for their financial aid application—"even if a divorce court order was issued concerning college expenses," per NBC News. Hagens Berman, the law firm representing the plaintiffs, says the supposed "price-fixing" plot raised the cost of tuition about $6,200 compared with schools that didn't use the CSS Profile. The attorneys say there are at least 20,000 possible other plaintiffs that could join the suit, which seeks more than $5 million in monetary damages and to halt the practice. In a statement, the College Board said, "We are confident that we will prevail in this action." Most schools named in the suit haven't commented, except for NYU, whose spokesman notes, "This lawsuit has no merit." (More College Board stories.)