Lawsuit Filed Against 32 Elite Colleges Over Early Decision Admissions

A new federal lawsuit accuses 32 elite colleges of engaging in an “early decision conspiracy” that inflates the tuition paid by students.

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A class-action lawsuit filed Friday in the U.S. District Court of Massachusetts accuses 32 elite colleges and universities of conspiring to inflate tuition costs through their use of the early decision admissions process.

According to the complaint, filed by four current and former students, the universities “openly participated and are participating in practices that entrench patterns of inequality of access while inflating the price of attendance. Among these is the central practice challenged in this case: a horizontal agreement to reduce or eliminate competition through use of the early decision process.”

The 32 institutions named as defendants are Amherst College, Barnard College, Bowdoin College, Brown University, Bryn Mawr College, Carleton College, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Haverford College, Johns Hopkins University, Macalester College, Middlebury College, Mount Holyoke College, Northwestern University, Oberlin College, Pomona College, Rice University, Smith College, Swarthmore College, Trinity College, University of Chicago, University of Pennsylvania, University of Rochester, Vanderbilt University, Vassar College, Washington University in St. Louis, Wellesley College, Wesleyan University, and Williams College.

Also named as defendants, in what the complaint calls an “early decision conspiracy,” are the Consortium on Financing Higher Education, an organization of highly selective college that shares information on admissions and financial aid, along with the Common Application and Scoir Inc., two college admissions platforms used by the schools.

Under an early-decision admissions process, students who apply early in the admissions cycle to the institution they want to attend receive an admission decision well ahead of the usual notification date. If they are accepted, they agree to enroll and accept the college’s financial aid offer, withdrawing their applications to other schools. Although early-decision agreements are not legally binding, they are traditionally regarded as firm commitments.

Using this system, highly selective schools usually accept a higher percentage of students compared to their regular admission cycle, but in exchange, applicants forego the chance to shop around for better financial aid offers from other schools.

The difference in admission odds can be considerable. According to the college admissions consulting firm, College Transitions, acceptance rates are often two to three times higher for early-decison versus regular-admissions applicants at prestigious institutions.

The plaintiffs claim this trade-off puts “price-sensitive” applicants at a disadvantage because they are forced to make a decision without knowing the full cost of attending one school or the other, a comparison that is less crucial to wealthy students.

Plaintiffs called early decision “a classic per se violation of the antitrust laws,” writing, “ultimately, Early Decision is enforced by mutual agreement between would-be competitors not to compete for students offered admission through Early Decision at other schools.”

The complaint also alleges that although the “agreement is presented in a form that resembles a contract, an applicant’s commitment is not actually legally binding.” Rather than being an “enforceable contractual obligation,” it imposes an “ethical” obligation that “doesn’t have any legal standing.”

Nonethless, colleges themselves benefit from the fact that early decision is not a binding contract, in part because they can withdraw their offers of acceptance if students don’t keep their grades up or engage in some type of prohibited conduct.

The plaintiffs also charge that early decision admissions serve to drive up the price students have to pay for their education. “The schools lose their incentive to compete on price for students admitted through Early Decision, driving up overall ‘top line’ tuition levels and reducing both need-based and merit-based aid for Early Decision admittees. The result is that both Early and non-Early Decision students pay higher prices than they would have paid absent the conspiracy at the center of the Early Decision scheme,” reads the filing.

The pros and cons of early-decision admissions have long been debated. The issue often boils down to the question of whether early-decision is good primarily for institutions or for students. It’s obvious how schools using early-decision benefit: they increase their admission yield (and revenue) and sometimes beat out more selective colleges for applicants who don’t want t0 risk being rejected by a more prestigious school.

But early admissions can discriminate against low-income students in several ways. First, compared to privileged students, non-affluent students generally are less aware of the option and the advantages of applying early. Second, they can’t afford to visit multiple schools before making a well-informed college choice. Third, it’s difficult for low-income students to commit to a college without comparing financial aid offers so they know they’re making a good financial decision.

Elite institutions are aware, of course, of the criticism that early decisions admissions creates a privilege that favors wealthy applicants. Many of them, including several of the defendants in the new lawsuit, participate in QuestBridge, one of the country’s most visible and successful efforts to mitigate some of the bias associated with early-decision admissions.

“Early Decision applicants lose choice and negotiation leverage, while Regular Decision applicants are left to scramble for an artificially diminished number of admission slots doled out at lower acceptance rates,” said Benjamin Brown, managing partner at Cohen Milstein Sellers & Toll, one of the law firms representing the plaintiffs. “We contend that all of this is only made possible by an agreement not to compete that violates bedrock antitrust law.”

Most of the defendants have not yet commented on the lawsuit. However, Brown University’s Senior Vice President for Communications Cass Cliatt told the The Brown Daily Herald that the complaint had no merit and the university “is prepared to mount a strong defense to make this clear.” She added, “Brown has always made decisions about its admissions processes and financial aid independently as part of the University’s longstanding commitment to enhancing access to the benefits of a Brown education regardless of socioeconomic circumstances.”

The lawsuit marks the second major antitrust claim against prestigious universities’ admission polices in recent years. In 2022, several students filed a lawsuit alleging that 17 elite institutions — members of the former “568 Presidents Group” — had colluded with their ”consensus methodology” to extend financial aid offers that artificially inflated the net prices of attendance.

Although they have consistently denied doing anything wrong, the majority of those institutions have now settled the lawsuit for a cumulative amount in excess of $300 million.