Carl W. Hittinger (left) and Tyson Herrold (right) of Baker & Hostetler. Courtesy photos Federal Court Decision a Reminder Antitrust Laws Apply to Higher Education
The ruling by the U.S. District Court for the Northern District of Illinois is notable because it held that the "568 Exemption," on which many universities' financial aid systems are based, does not provide antitrust immunity unless all participating universities admit their students on a need-blind basis.
October 07, 2022 at 11:54 AM
6 minute read
Seventeen of U.S. News & World Report's top 25 universities in the nation recently lost their bid to dismiss allegations of an antitrust conspiracy to suppress student financial aid awards. The ruling by the U.S. District Court for the Northern District of Illinois is notable because it held that the "568 Exemption," on which many universities' financial aid systems are based, does not provide antitrust immunity unless all participating universities admit their students on a need-blind basis. More broadly, it is a reminder that the antitrust laws apply to higher education, even public universities, and highlights the risk in relying on narrow exemptions to the antitrust laws in reaching agreements with competitors.
The 568 Exemption to Antitrust Laws
The 586 Exemption dates back to 1989, when the Department of Justice filed a civil antitrust case against the "Ivy Overlap Group," a group of universities alleged to have "collectively determined the amount of financial assistance to award to commonly admitted students" by "employing the same analysis to compute family contributions." After a trip to the U.S. Court of Appeals for the Third Circuit, in 1991 the parties inked a 10-year consent decree in which the universities pledged, among other things, not to agree on "student financial aid," including "how family or parental contribution will be calculated."
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