College students should soon be receiving the first batch of payments in a $284 million settlement with prestigious American universities accused of colluding to fix financial aid offerings.

A 2022 federal class-action lawsuit alleged 17 elite institutions engaged in “a price-fixing cartel” that reduced financial aid packages for students, effectively overcharging them “by at least hundreds of millions of dollars.”

So far, 10 of those schools have agreed to make settlement payments, including University of Chicago, Emory University, Yale University, Brown University, Columbia University, Duke University, Dartmouth College, Rice University, Northwestern University and Vanderbilt University.

College students should soon be receiving the first batch of payments in a $284 million settlement. Boston Globe via Getty Images

The other defendants included California Institute of Technology, Cornell University, Georgetown University, Johns Hopkins University, Massachusetts Institute of Technology, University of Notre Dame and University of Pennsylvania.

None of the universities have admitted to any wrongdoing.

Electronic settlement payments were sent Monday to students who submitted claims.

Physical checks will be mailed by Friday.

Current and former students who attended any of the 17 institutions named in the lawsuit will receive average payments of $2,000.

The exact payment depends on how many of the estimated 200,000 class members submitted claims in time; the net tuition cost of the university a claimant attended; and the dates of attendance.

The first batch of settlement payments have been sent to students. cunaplus – stock.adobe.com

The deadline to submit a claim has already passed, so those who did not file will not receive payments. 

Eligible claimants included Chicago, Columbia, Cornell, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, Rice, Vanderbilt and Yale students enrolled starting fall term 2003; Brown, Dartmouth and Emory students enrolled starting fall term 2004; Caltech students starting fall term 2019; and Johns Hopkins students starting fall term 2021.

The schools named in the lawsuit allegedly met at least annually to discuss financial aid calculations, which ultimately provided students with less funding than they would have received if there was no collusion, according to the complaint.

A price-fixing scheme would violate Section 568 of the Improving America’s Schools Act of 1994, which permits collaboration between universities when they develop their financial aid formulas, but only if they do not consider applicants’ financial need in their individual admission decisions, the suit said.