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Some University of Chicago and Northwestern alumni could be seeing thousands of dollars in their bank accounts.
Why it matters: Students who received financial aid at one of the elite colleges may qualify for a refund from a years-long antitrust lawsuit.
Driving the news: The settlement fund sent electronic payments to approved claimants July 20. Payments will be mailed by July 24 to claimants who chose to receive a physical check.
Catch up quick: Current and former financial aid recipients filed a class action complaint against Brown University, University of Chicago, Northwestern University and 14 other elite colleges in January 2022.
- The complaint alleges that the schools "participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition ... and made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid."
Between the lines: If the schools had participated in a "need-blind" admissions policy, meaning they did not consider an applicant's ability to pay as a factor in admission, the universities would have been exempt from antitrust violations.
- Plaintiffs were able to prove the schools were not "need-blind," thus removing the antitrust exemption.
The fine print: Students had to have attended UChicago or Northwestern sometime from fall 2003 to Feb. 28, 2024, received at least some need-based financial aid from the school, and paid part of their tuition, fees, room or board.
- Twelve of the 17 schools have agreed to a settlement.
- Yes, but: Students at all 17 schools who met the requirements are eligible for payment.
The other side: The schools contend those claims lack merit; that the universities' financial aid policies were legal and pro-competitive and that they have valid defenses against the allegations, but the settlement avoids further litigation.
- "The University of Chicago is committed to removing financial barriers for undergraduate students who are admitted to the College and is proud of the extensive financial aid we offer to students," a spokesperson told Axios in a statement.
- Northwestern did not respond to a request for comment.
By the numbers: UChicago has agreed to pay $13.5 million in settlement, and Northwestern has agreed to pay $43.5 million.
Zoom in: Assuming that about half of the estimated 200,000 class members submit timely claims, the average claimant will receive about $2,000 from these settlements.
The fine print: All checks from the settlement become void and the recovery forfeited if not cashed within 90 days of issuance, according to the settlement.
What's next: If the five remaining schools do not settle, the case will go to trial in November in Chicago.
Editor's note: This story has been updated with a comment from the University of Chicago.
