Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Financial aid price-fixing scheme class action against elite universities dismissed, (Sep 29, 2025)

By Kenneth H. Ryesky, M.B.A., J.D.

Less than one-fourth of the colleges and universities that require financial aid applicants to submit tax returns and other financial data from noncustodial parents were named as defendants.

The federal district court in Chicago has dismissed a putative class action case against the College Board and 40 elite higher education institutions. Fifteen universities were dismissed from the case for want of proper venue and lack of specific personal jurisdiction. Having dismissed these defendants from the case, the court then dismissed the case for failure to state a claim upon which relief could be granted. The initial complaint having never been amended, these dismissals were all without prejudice (Hansen v. Northeastern University, No. 1:24-cv-09667 (N.D. Ill. Sept. 24, 2025)).

Background. The College Board is a not-for-profit corporation chartered by the State of New York for educational purposes, specifically including, inter alia, "the continuance and development of a program of tests and examinations" and facilitation of "a medium for the cooperation of secondary schools, colleges, and other institutions of higher learning and for the discussion of their common problems." The College Board's membership includes colleges and universities, many of which are popularly regarded as elite and distinguished; the College Board's governing officials are largely drawn from high-ranking personnel of such educational institutions.

The College Scholarship Service (CSS), the College Board's financial aid division, has developed standards and processes for College Board member institutions to award financial aid to their students; these include the CSS Profile® application submitted by students seeking non-federal need-based financial assistance. Approximately 250 College Board member institutions require the use of the CSS Profile® in their financial aid application processes.

The CSS Profile® is distinct from the Free Application for Federal Student Aid (FAFSA®), which is for student financial assistance from the federal government. Prospective students are frequently advised to submit both the CSS Profile® and the FAFSA® to finance their higher educations. The CSS Profile® requests more detailed information than does the FAFSA®, and while the FAFSA® is submitted to the government at no cost to the student, the CSS Profile® imposes a per-college application fee upon the student.

In 2006, the CSS updated its model methodology for evaluating student financial needs, whereby the student's family is "viewed as a set of relationships rather than a domestic unit." Such methodology permits the colleges to consider the financial resources of noncustodial parents (NCPs) of students who live (or during their minority, had lived) subject to the legal custody of only one of their biological or adoptive parents. The CSS Profile® accordingly provides for financial information of the students' NCPs. FAFSA® has no NCP information requirement or provision.

Two college students who had NCPs filed a putative class action lawsuit against 40 schools plus the College Board alleging that the requirement for NCPs to provide financial information on the CSS Profile® constituted an illegal conspiracy under the Sherman Act [15 U.S.C. § 1]. The defendant groups are (1) all of the named schools; (2) of all the named schools, the Non-Illinois Defendants; and (3) the College Board itself. The defendants have moved for dismissal for failure to state a claim [Fed. R. Civ. P. 12(b)(6)].

Venue. The judge found that the district court was not the appropriate venue with respect to the non-Illinois defendants. Under the antitrust law venue statute, venue is proper in the district where a corporate defendant "is an inhabitant, is found, or transacts business" [15 U.S.C. § 22]. The Non-Illinois Defendant schools are obviously neither found nor inhabit the district, so the court analyzed whether they transacted business in the district. Here, the alleged advertising and recruitment efforts by the Non-Illinois Defendant schools were insufficient to create the minimum contacts to transact business district, inasmuch as the major planning and coordination of those activities and the student acceptance and financial aid decisions were not made within the district, notwithstanding the relatively small percentage of district residents who were the affected students in the proposed class.

Personal jurisdiction-specific. The court found no basis for specific personal jurisdiction over the Non-Illinois Defendants. Here, the named plaintiffs in the class action case did not adequately connect the injuries they alleged they had suffered to any alleged conduct in Illinois. The court therefore dismissed the Non-Illinois Defendants from the case.

Failure to state a claim. The court ruled that the plaintiffs had failed to state a claim upon which relief could be granted. Here, the sole count in the complaint was a Sherman Act claim [15 U.S.C. § 1]. There was no direct evidence of the agreement constituting the requisite contract, combination, or conspiracy, and the circumstantial evidence proffered constituted at best "an allegation of parallel conduct and a bare assertion of conspiracy." This, standing alone, was insufficient. There were no allegations asserted of any "'plus factors,' or 'economic actions and outcomes that are largely inconsistent with unilateral conduct but largely consistent with explicitly coordinated action'" upon which to infer an agreement.

Moreover, the College Board specifically provides in its own directives that consideration of NCP information rests with the individual College Board members, and that most of the institutions that use the CSS Profile do not require NCP financial information. There was nothing to suggest any exchange or sharing of internal information or data among the 40 named schools relating to their decision-making processes.

The Case is No. 1:24-cv-09667.

Judge: Ellis, S.

Attorneys: Craig R. Spiegel (Hagens Berman Sobol Shapiro LLP) for Maxwell Hansen and Eileen Chang. Scott David Stein (Sidley Austin LLP) for Northwestern University. Amy Beth Manning (McGuireWoods LLP) for American University. Edward M. Casmere (Norton Rose Fulbright US LLP) for Baylor University. Matthew Lawrence Kutcher (Cooley LLP) for Boston College, Boston University and Brandeis University. Jon R. Roellke (Morgan, Lewis & Bockius LLP) for Brown University. Christopher E. Ondeck (Proskauer Rose LLP) for California Institute of Technology. James A. Morsch (Saul Ewing Arnstein & Lehr LLP) for Carnegie Mellon University.

Companies: Northwestern University; American University; Baylor University; Boston College; Boston University; Brandeis University; Brown University; California Institute of Technology; Carnegie Mellon University

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