Two former students, Maxwell Hansen and Eileen Chang, brought suit against Northwestern University, the College Board, and 39 other private universities in Illinois federal court. They alleged that the institutions engaged in a horizontal conspiracy to inflate net college costs by uniformly requiring noncustodial parents (NCPs) to submit financial information as part of institutional financial aid applications. Plaintiffs alleged that this collective practice, which they referred to as the “NCP Agreed Pricing Strategy,” constituted a per se violation of Section 1 of the Sherman Act by restraining competition in the market for need-based financial aid.
The schools at issue, all highly selective private universities, used the College Board’s CSS Profile and the accompanying “Institutional Methodology” to assess applicants’ ability to pay. Unlike the federal FAFSA form, which only collects financial information from custodial parents, the CSS Profile allows institutions to request income and asset data from NCPs as part of institutional aid calculations. Plaintiffs argued that, by requiring this information, schools systematically increased students’ expected family contributions, particularly for those from divorced households where the NCP may not contribute financially or have any ongoing involvement. This, in turn, reduced the amount of institutional aid awarded, forcing families to borrow more or pay higher out-of-pocket costs.
According to the complaint, this practice was the product of coordinated activity facilitated through the College Board and its Financial Aid Standards and Services Advisory Committee (FASSAC), a committee whose members include representatives from many of the defendant institutions. Plaintiffs alleged that FASSAC meetings and subcommittee reports encouraged alignment on the use of NCP data and that the institutions’ collective adoption of the practice suggested a broader agreement to limit price competition for aid awards.
Plaintiffs claimed that this alleged conspiracy not only resulted in artificially inflated net tuition costs but also unfairly disadvantaged students from single-parent households. Both Hansen and Chang alleged that they were directly impacted by the policy: Hansen’s NCP did not provide financial support but was nevertheless included in his aid calculation, and Chang’s NCP had a disability and limited income, yet Cornell included his finances in determining her aid package.
Defendants moved to dismiss the suit for failure to state a claim in the complaint, and a subset of universities located outside of Illinois challenged the suit for lack of jurisdiction and improper venue. The Court dismissed claims against 15 non-Illinois institutions, including Harvard, MIT, and Duke, for lack of personal jurisdiction and improper venue, finding that mere recruitment of Illinois students and receipt of tuition payments did not establish that these universities transacted business in the district.
As to the merits, to state a claim under Section 1 of the Sherman Act, plaintiffs must allege: (1) a contract, combination or conspiracy; (2) a resultant unreasonable restraint of trade in a relevant market; and (3) an accompanying injury. The Court held that plaintiffs failed to plausibly allege a “contract, combination, or conspiracy.” Although the universities all required NCP data and used the CSS Profile, the Court found the allegations reflected lawful parallel conduct rather than concerted action. The universities adopted the policy over a span of nearly 20 years, and plaintiffs offered no detailed facts showing that any school coordinated its aid practices with others. The Court emphasized that membership in the College Board and participation in its committees did not, without more, suggest an unlawful agreement. Importantly, the CSS Profile policy was not mandatory, and dozens of non-party schools also used it, weakening the inference of collusion among the 40 university defendants.
The Court further rejected plaintiffs’ attempt to rely on the collection of NCP data through the CSS Profile as an anticompetitive information-sharing scheme, noting that there were no allegations that schools shared internal aid formulas, discussed specific awards, or agreed to offer identical aid packages.
Because plaintiffs failed to plead sufficient plus factors to distinguish coordination from independent action, the Court concluded that the allegations were consistent with a wide range of lawful and independent business conduct. The motion to dismiss was granted without prejudice, allowing plaintiffs the opportunity to amend.
Hansen v. Nw. Univ. (N.D.Ill. Sep. 24, 2025) 2025 LX 492302.
Note: When independent schools or universities discuss or adopt similar practices regarding tuition pricing, financial aid formulas, or discounting policies, antitrust liability can arise, even if the intent is not to limit competition. The Sherman Act prohibits agreements among competitors that restrain trade, including coordinated efforts to limit price competition through uniform financial aid criteria.