Penn is among 40 elite universities named in a lawsuit that alleges a price fixing scheme to increase the cost of attendance for students coming from divorced or separated homes.
The class action lawsuit — filed in Illinois district court on Oct. 7 by a student at Boston University and a former Cornell University student — is the second antitrust lawsuit related to tuition costs that Penn is facing. The new lawsuit alleges that Penn and the other universities withheld funding from applicants by considering the financial backgrounds of noncustodial parents when determining financial aid packages.
The University did not respond to The Daily Pennsylvanian’s request for comment on the lawsuit.
Hagens Berman — the firm that filed the class action suit — alleges that this practice began in 2006. This was when the College Board implemented a policy requiring financial information for both parents — regardless of custody arrangements or intention to contribute financially to one’s college education — in its College Scholarship Service Profile. The suit claims that this practice has affected over 20,000 students and raised the cost of tuition by approximately $6,200 in comparison to universities that have not implemented it.
The CSS Profile is required for all Penn applicants seeking financial aid and mandates that applicants with noncustodial parents follow the standard policy of including financial information for both parents. According to the lawsuit, this policy was created by individuals connected with the financial aid processes at the sued universities, including Penn.
The suit explicitly names Penn’s former Director of Student Financial Aid William Schilling. Schilling, a 1966 College and 1969 Penn Law School graduate, died in December 2021. He previously served on the College Board’s Financial Aid Standards and Services Advisory Committee and the College Board’s CSS Financial Assistance Assembly Committee.
Earlier this week, Penn announced changes to its financial aid process. Those changes include the requirement that students need only submit the financial information for a non-custodial parent once. Additionally, students are now only required to submit the W-2 form, the form that reports earned wages, for their primary parent.
Penn still faces an ongoing class action lawsuit filed in January 2022. This suit alleges that Penn was among 17 elite universities engaging in a price fixing scheme by collaborating with peer institutions to lower need-based financial aid while inflating the cost of tuition. Penn is one of seven schools that has not yet settled the case, while the other 10 schools have collectively settled for approximately $284 million.
Recently, an email was sent to eligible students informing them that they may be able to claim up to $2,000 as part of the settlement.
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