Grassley, Jordan, Lee and Fitzgerald Launch Bicameral Investigation into Potential Ivy League Tuition Pricing Collusion

WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and House Judiciary Committee Chairman Jim Jordan (R-Ohio) are inspecting the tuition pricing practices of Ivy League member institutions. The chairmen are joined by Sen. Mike Lee (R-Utah), Chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, and Rep. Scott Fitzgerald (R-Wis.), Chairman of the House Subcommittee on the Administrative State, Regulatory Reform and Antitrust.

“We are particularly concerned that Ivy League member institutions appear to collectively raise tuition prices while engaging in price discrimination by offering selective financial aid packages to maximize profit. These institutions establish the industry standard for tuition pricing, creating an umbrella effect for all colleges and universities to justify higher tuition costs than they could otherwise charge in a competitive market,” the lawmakers wrote.

“The structure and operation of the higher education market strongly suggests the market is not functioning properly and is subject to widespread violations of antitrust laws,” the lawmakers continued.

The lawmakers sent letters to eight Ivy League universities requesting documents and communications regarding their apparent collusion to raise tuition prices. They contend that the Ivy Leagues’ anti-competitive agreements, use of shared admissions algorithms and ongoing coordination with third parties – such as the College Board and the Common Application – may violate federal antitrust law.

Their letters follow:

• Brown University 
• Columbia University
• Cornell University 
• Dartmouth College 
• Harvard University 
• Princeton University 
• University of Pennsylvania 
• Yale University 

Background:

Federal antitrust law prohibits:

• Certain agreements among competitors that limit competition on price, output or quality of services;
• Coordination with noncompetitor third parties to facilitate collusion;
• Businesses from locking consumers into one market, and then forcing consumers to purchase related goods and services in a secondary market; and
• Certain members of boards of directors from sitting on the boards of competitors.

There are significant concerns that Ivy League member institutions’ coordinated practices and alleged collusion violate federal antitrust law, and that these institutions continue to benefit from prior collusion, despite Congress sunsetting their antitrust exemption in 2022.

Additionally, the lawmakers warn:

• Despite a steady increase in consumer demand and massive endowments that grow yearly, universities continue to limit output and drive prices higher.
• Binding early decision programs may eliminate students’ ability to receive and compare competing financial aid offers.
• Institutions requiring students to purchase on-campus housing and meal-plan packages, in addition to tuition, undermines consumer choice and restricts competition in secondary markets.
• Directors or trustees currently serving on the boards of multiple higher education institutions or other organizations that influence admissions create conflicts of interest.

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