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> The prospective class action filed last year against 17 schools alleged a price-fixing conspiracy in which schools restricted financial aid, causing a class o

by graphe 4y ago

> The prospective class action filed last year against 17 schools alleged a price-fixing conspiracy in which schools restricted financial aid, causing a class of potentially more than 200,000 students to over-pay for tuition by tens of millions of dollars. The lawsuit survived an early bid by the schools to dismiss it. What does this mean? They didn't qualify for student aid, they qualifed and were denied, or they went to a school, saw they could have paid less and were upset?

Spivak 4y ago
One school cuts their financial aid program, sucks but not illegal. Every school cuts their financial aid program, smells like price fixing. Students would have chosen a school with a more attractive financial aid program, which is a real effect — it’s super common to apply a bunch of similar schools and go to the one that gives you the most financial aid but the allegation is that all the programs dried up all at once and not going to college at all pretty much isn’t an option for a lot of fields. Without some kind of intervention that prevents employers using college degrees for employment decisions we’re gonna be here a while.
- lolinder 4y ago
  > it’s super common to apply a bunch of similar schools and go to the one that gives you the most financial aid but the allegation is that all the programs dried up all at once and not going to college at all pretty much isn’t an option for a lot of fields. Not going to one of the "elite" schools is, though, and it's not like financial aid disappeared at all the state schools. The reputational difference between the state schools and the ivy league has been narrowing a lot in recent years in response to numerous scandals like this and a lot of improvement from the state schools. Is there any reason for the government to step in here, rather than just letting the ivy league continue to destroy its reputation?
  - Spivak 4y ago
    Assuming it’s true, I think the government should step in because price fixing is illegal, really doesn’t matter who or why, and the students who paid more because of this scheme should be compensated. And having all these schools’ names be dragged through the mud during the court proceedings will further your goal.
    - graphe 4y ago
      Is price fixing illegal? It’s applied very inconsistently. Farmers have their prices fixed. Shkreli wasn’t so lucky. During hurricanes it was illegal to raise prices. But Nixon enacted a price freeze too.
  - billiallards 4y ago
    >The reputational difference between the state schools and the ivy league has been narrowing a lot in recent years in response to numerous scandals like this and a lot of improvement from the state schools. The elite schools are considered "elite" not because they offer a better education, but because they ensure that your classmates will be valuable network contacts after you graduate. From the perspective of the school, admitting people who are already wealthy/successful is preferable to admitting people who may become successful in the future. The school's status depends on having a disproportionately large population from the former group. They act this way because the business world works similarly: you are more valuable if you are already on a first-name basis with high-level executives and politicals, because you can listen to the wind and bring your contacts in on the businesses that you are involved in. All of that is a long-winded rephrasing of the old truism: it's not about what you know, but who you know.
    - FormerBandmate 4y ago
      > All of that is a long-winded rephrasing of the old truism: it's not about what you know, but who you know. This is how organizations die, political, corporate, non-profit, or any other type. People who are good at knowing other people frequently aren’t the best person for the job, and selecting for newcomers who are good at knowing other people over work leads to aristocrats and manipulative sociopaths taking over, and then you have GE, a company that lost its ability to innovate, could only copy hot trends popular among Wall Street poorly, moved into finance and oil despite having no expertise in these fields to the tune of billion dollar losses, and is now a mess in the process of being broken up and dissolved. On a much greater scale, Putin’s Russia works a lot like this, which has led it to become an incompetent brutal dictatorship that terrorizes its citizens and also can’t even take over Ukraine, one of the poorest country in Europe and its direct neighbor, because everyone who was competent got pushed out or killed.
caddemon 4y ago
No the students did receive aid and they probably received more aid than they would at almost any other school in the country. Of course there are cheaper sticker price options like in-state public universities, but specifically talking about the aid, it is quite good at elite schools. If people want to be mad about kids getting ripped off they should be mad at mediocre private U that has the same sticker price with a worse product and substantially worse aid packages. Anyway the claim in the lawsuit about lost money is really just theoretical - most of the top schools collaborate in developing methods to determine how much aid a student should receive. The lawsuit is claiming that if the top schools could not "collude" on aid, students would have gotten more of it. However I think that is a massive assumption that is not going to play out the way they would like. These schools reject 100s of qualified people every year that would gladly take a spot with current aid packages. There might be an occasional superstar that schools do compete over, but your average small town middle class 1600 SAT kid is super fucking replaceable. Hell I could see aid being lower if schools didn't "collude", because being part of this need blind consortium is good PR. The lesser schools that give lesser aid are the ones that supposedly don't collude. Legally it will be an interesting case though - the reason these schools are allowed to work together on aid package formulas is because they practice need blind admissions, which really only the top unis do. The lawsuit argues that admissions is not actually need blind, because of preferential admission for wealthy donors and some other admissions dynamics that are more common and inadvertently factor in wealth. That makes this discovery highly relevant to the case, and while I think need blind status will be ultimately upheld, I'm sure the schools don't want the info getting out. Interestingly, the initial lawsuit is based purely on public info and a handful of salty (unclear why) students. There isn't private info about people's aid packages or anything like that supporting it as far as I can find. I suspect the people suing realized they had an argument the schools weren't actually need blind, and that is what they actually wanted to challenge, so they dug up an argument about supposed low ball aid packages because the need blind schools form an aid consortium. A lot of the articles about the lawsuit have left out critical details about what is actually being claimed, the claims make no sense until you realize this is actually about challenging need blind status. Here is an article that does touch on the key issues: https://www.nytimes.com/2022/01/10/us/financial-aid-lawsuit-colleges.html https://www.nytimes.com/2022/01/10/us/financial-aid-lawsuit-...

by graphe 4y ago

Spivak 4y ago

One school cuts their financial aid program, sucks but not illegal. Every school cuts their financial aid program, smells like price fixing. Students would have chosen a school with a more attractive financial aid program, which is a real effect — it’s super common to apply a bunch of similar schools and go to the one that gives you the most financial aid but the allegation is that all the programs dried up all at once and not going to college at all pretty much isn’t an option for a lot of fields. Without some kind of intervention that prevents employers using college degrees for employment decisions we’re gonna be here a while.

lolinder 4y ago
> it’s super common to apply a bunch of similar schools and go to the one that gives you the most financial aid but the allegation is that all the programs dried up all at once and not going to college at all pretty much isn’t an option for a lot of fields. Not going to one of the "elite" schools is, though, and it's not like financial aid disappeared at all the state schools. The reputational difference between the state schools and the ivy league has been narrowing a lot in recent years in response to numerous scandals like this and a lot of improvement from the state schools. Is there any reason for the government to step in here, rather than just letting the ivy league continue to destroy its reputation?
- Spivak 4y ago
  Assuming it’s true, I think the government should step in because price fixing is illegal, really doesn’t matter who or why, and the students who paid more because of this scheme should be compensated. And having all these schools’ names be dragged through the mud during the court proceedings will further your goal.
  - graphe 4y ago
    Is price fixing illegal? It’s applied very inconsistently. Farmers have their prices fixed. Shkreli wasn’t so lucky. During hurricanes it was illegal to raise prices. But Nixon enacted a price freeze too.
- billiallards 4y ago
  >The reputational difference between the state schools and the ivy league has been narrowing a lot in recent years in response to numerous scandals like this and a lot of improvement from the state schools. The elite schools are considered "elite" not because they offer a better education, but because they ensure that your classmates will be valuable network contacts after you graduate. From the perspective of the school, admitting people who are already wealthy/successful is preferable to admitting people who may become successful in the future. The school's status depends on having a disproportionately large population from the former group. They act this way because the business world works similarly: you are more valuable if you are already on a first-name basis with high-level executives and politicals, because you can listen to the wind and bring your contacts in on the businesses that you are involved in. All of that is a long-winded rephrasing of the old truism: it's not about what you know, but who you know.
  - FormerBandmate 4y ago
    > All of that is a long-winded rephrasing of the old truism: it's not about what you know, but who you know. This is how organizations die, political, corporate, non-profit, or any other type. People who are good at knowing other people frequently aren’t the best person for the job, and selecting for newcomers who are good at knowing other people over work leads to aristocrats and manipulative sociopaths taking over, and then you have GE, a company that lost its ability to innovate, could only copy hot trends popular among Wall Street poorly, moved into finance and oil despite having no expertise in these fields to the tune of billion dollar losses, and is now a mess in the process of being broken up and dissolved. On a much greater scale, Putin’s Russia works a lot like this, which has led it to become an incompetent brutal dictatorship that terrorizes its citizens and also can’t even take over Ukraine, one of the poorest country in Europe and its direct neighbor, because everyone who was competent got pushed out or killed.

caddemon 4y ago

No the students did receive aid and they probably received more aid than they would at almost any other school in the country. Of course there are cheaper sticker price options like in-state public universities, but specifically talking about the aid, it is quite good at elite schools. If people want to be mad about kids getting ripped off they should be mad at mediocre private U that has the same sticker price with a worse product and substantially worse aid packages. Anyway the claim in the lawsuit about lost money is really just theoretical - most of the top schools collaborate in developing methods to determine how much aid a student should receive. The lawsuit is claiming that if the top schools could not "collude" on aid, students would have gotten more of it. However I think that is a massive assumption that is not going to play out the way they would like. These schools reject 100s of qualified people every year that would gladly take a spot with current aid packages. There might be an occasional superstar that schools do compete over, but your average small town middle class 1600 SAT kid is super fucking replaceable. Hell I could see aid being lower if schools didn't "collude", because being part of this need blind consortium is good PR. The lesser schools that give lesser aid are the ones that supposedly don't collude. Legally it will be an interesting case though - the reason these schools are allowed to work together on aid package formulas is because they practice need blind admissions, which really only the top unis do. The lawsuit argues that admissions is not actually need blind, because of preferential admission for wealthy donors and some other admissions dynamics that are more common and inadvertently factor in wealth. That makes this discovery highly relevant to the case, and while I think need blind status will be ultimately upheld, I'm sure the schools don't want the info getting out. Interestingly, the initial lawsuit is based purely on public info and a handful of salty (unclear why) students. There isn't private info about people's aid packages or anything like that supporting it as far as I can find. I suspect the people suing realized they had an argument the schools weren't actually need blind, and that is what they actually wanted to challenge, so they dug up an argument about supposed low ball aid packages because the need blind schools form an aid consortium. A lot of the articles about the lawsuit have left out critical details about what is actually being claimed, the claims make no sense until you realize this is actually about challenging need blind status. Here is an article that does touch on the key issues: https://www.nytimes.com/2022/01/10/us/financial-aid-lawsuit-colleges.html https://www.nytimes.com/2022/01/10/us/financial-aid-lawsuit-...