A class action lawsuit was filed against the College Board, Stanford University and 39 other private U.S. universities last Monday, alleging that students with divorced parents are disadvantaged in the financial aid process.
According to the lawsuit, Stanford has required children of divorced parents to include the financial information of the non-custodial parent when applying for financial aid, artificially inflating the cost of tuition. The lawsuit states that the College Board — a company that creates SAT and AP exams, collects financial aid information and connects students with scholarship organizations — pushed the elite universities implicated in the scheme to require this information starting in 2006 through the College Scholarship Service (CSS) profile.
The 40 defendant universities use information on noncustodial parent income from the College Board’s Net Price Calculator (NPC) based on financial data submitted via the CSS profile. The lawsuit alleges that the average net price of tuition is approximately $6,200 more for the 40 defendant universities using the NPC compared to other elite universities that use the Free Application for Federal Student Aid (FAFSA), which does not require students to report noncustodial parent income.
The plaintiffs, Maxwell Hansen and Eileen Chang, represent both themselves and others who are “similarly situated.” Hansen and Chang — students at Boston University (BU) and Cornell University respectively — claim they are both paying artificially high tuition costs because their noncustodial parents’ incomes are factored into their financial aid. The students are represented by Hagens Berman, a class action law firm.
Steve Berman, managing partner of Hagens Berman, wrote in an email to The Daily that two Stanford students have reached out regarding the alleged price fixing and may later be added as plaintiffs if the complaint is amended.
The Daily has reached out to the University for comment.
If the lawsuit is successful, “it might force schools to not ‘agree’ on how to approach aid but to compete for the best students independently as the antitrust laws require,” Berman wrote.
If a student’s non-custodial parent earns a higher income than the student’s custodial parent, the lawsuit alleges that matters are often made worse for the student. According to the lawsuit, Chang’s noncustodial parent was on disability leave while she attended Cornell, but earned a higher income than her custodial parent. According to Chang, the university refused to recognize that her noncustodial parent could not contribute to her education and Chang was forced to pay artificially high tuition costs by taking out loans.
By assuming that noncustodial parents are able to contribute to a student’s tuition, the 40 defendant universities impose prohibitively high costs of education on some children of divorced parents, per the suit. Hansen claims that even though he reported the estimated contribution from his father — a noncustodial parent — as $0, the $20,000 he received in aid to attend BU is disproportionately low and he must pay the remaining balance using student loans.