The central question in Henry v. Brown University is whether collaboration among universities to promote equitable access to financial aid crosses the line into unlawful coordination on price. The current antitrust litigation against Cornell and other elite universities traces back to a long-standing practice of collaboration on financial aid policies. Beginning in the 1990s, Congress granted certain need-blind institutions a limited exemption from antitrust laws, allowing them to coordinate on common principles for determining financial need in order to promote equitable distribution of aid (1). In 2022, however, former students filed a class action lawsuit (commonly known as Henry v. Brown University), alleging that 17 universities used this framework to suppress competition by standardizing financial aid formulas in ways that reduced the total aid offered (2). The central legal dispute, and the question running through this analysis, focuses on whether this coordination constituted unlawful price-fixing under the Sherman Antitrust Act or a permissible, procompetitive collaboration.
The dispute centers on the size of institutional grants offered to prospective students, which in turn determines students’ net price of attendance. At these institutions, financial aid eligibility is generally calculated as the difference between the cost of attendance and a school’s estimate of a family’s expected contribution (3). In addition to funds from federal and state aid programs, grants funded directly by the university fill this gap (4). Therefore, universities’ methodologies for determining the size of these grants can have an outsized effect on what students ultimately pay.
Because that estimate directly determines net price, plaintiffs contend that common standards for measuring need can function as a mechanism for aligning prices across schools (5). If schools use similar methodologies to evaluate families and award aid, students with comparable financial profiles may face more similar net prices than they would under independent decision-making, effectively restricting competition over the price of higher education. The universities counter that their practices are designed to ensure aid was distributed based on need rather than merit, preventing bidding wars for high-achieving applicants and preserving resources for lower-income students (6).
The allegations also raise broader economic questions about the relationship between financial aid and tuition-setting. Colleges may respond to increases in federal student aid by raising tuition in order to capture part of the additional subsidy, rather than fully passing it through to students in the form of lower net prices, as former Secretary of Education William Bennett hypothesized decades ago (7). In this case, that logic underscores plaintiffs’ concern that financial-aid policies can operate as a key dimension of price competition: if coordinated methodologies dampen competition over aid, institutions may face less pressure to offer larger grants, reinforcing incentives to sustain higher net prices.
Over time, more than two-thirds of the defendant schools have settled for a combined total of roughly $320 million, while a smaller group, including Cornell, has continued to litigate (8). Judge Matthew Kennelly ruled in early 2026 that genuine disputes of fact remain regarding whether the universities qualify for the need-blind exemption and whether their coordinated financial-aid practices violated the antitrust laws, leaving those questions for a jury to resolve (9). In doing so, he emphasized that participation in devising common financial-aid practices may constitute “concerted action” sufficient to trigger antitrust scrutiny, even absent an explicit agreement on prices (10). As a result, the case is now proceeding to trial in the U.S. District Court for the Northern District of Illinois, where the competing narratives of collusion versus equitable coordination will be tested (11).
Ultimately, the case will turn on the same question raised at the outset: whether coordinated financial-aid methodologies function as a permissible tool for equitable, need-based aid administration or as a mechanism for unlawful price coordination. Economic evidence on the competitive significance of these methodologies and their effect on net prices is likely to be central to that determination.
References
- United States Congress. Improving America’s Schools Act of 1994, Section 568. U.S. Government Publishing Office. https://www.govinfo.gov/content/pkg/STATUTE-108/pdf/STATUTE-108-Pg3518.pdf
- Henry et al. v. Brown University et al., No. 1:22-cv-00125, U.S. District Court, Northern District of Illinois, 9 Jan. 2022. Complaint. https://www.classaction.org/media/henry-et-al-v-brown-university-et-al.pdf
- Federal Student Aid. “How is the Student Aid Index (SAI) calculated?” U.S. Department of Education. https://studentaid.gov/help-center/answers/article/how-sai-calculated
- College Board. Trends in Student Aid. College Board. https://research.collegeboard.org/trends/studentaid
- Henry et al. v. Brown University et al., No. 1:22-cv-00125. Complaint. https://www.classaction.org/media/henry-et-al-v-brown-university-et-al.pdf
- “Section 568(b) Explained: Need-Blind Aid and the 568 Cartel.” LegalClarity, 26 May 2026. https://legalclarity.org/section-568b-explained-need-blind-aid-and-the-568-cartel/; Lovenheim, Michael F., and Sarah E. Turner. Economics of Education. Worth Publishers, 2019.
- Bennett, William J. “Our Greedy Colleges.” The New York Times, 18 Feb. 1987. https://www.nytimes.com/1987/02/18/opinion/our-greedy-colleges.html
- Berger Montague. “Plaintiffs in Elite University Price-Fixing Case Settle with Caltech and Johns Hopkins.” https://bergermontague.com/news/henry-et-al-v-brown-university-et-al-568-cartel-antitrustlitigation-moves-forward-as-the-court-denies-the-defendant-universities-summary-judgment-motion/
- Kennelly, Matthew F. Henry et al. v. Brown University et al., No. 1:22-cv-00125. U.S. District Court, Northern District of Illinois. Memorandum Opinion and Order. https://storage.courtlistener.com/recap/gov.uscourts.ilnd.411049/gov.uscourts.ilnd.411049.1210.0_4.pdf
- Kennelly, Matthew F. Henry et al. v. Brown University et al., No. 1:22-cv-00125. U.S. District Court, Northern District of Illinois. Memorandum Opinion and Order. https://storage.courtlistener.com/recap/gov.uscourts.ilnd.411049/gov.uscourts.ilnd.411049.1210.0_4.pdf
- Berger Montague. “Henry, et al. v. Brown University, et al. – 568 Cartel Antitrust Litigation.” https://bergermontague.com/568
Author Backgrounds:
Dr. Ilia Kapelevich is a Consultant with Coherent Economics, LLC. He is an applied microeconomist with expertise in econometric methods, labor economics, and industrial organization. Dr. Kapelevich applies these tools to address complex economic problems in both consulting and research settings, and even designed and taught a course on the economics of education at the University of Florida. His professional interests include antitrust litigation, intellectual property, and securities and financial markets.
Dr. Nandita Krishnaswamy is a Senior Consultant with Coherent Economics, LLC. She applies microeconomic and econometric methods to complex litigation and regulatory matters, with a focus on antitrust, competition, labor, and employment. Dr. Krishnaswamy has supported academic and industry experts through all stages of the litigation process in matters spanning liability, damages, and class certification. Her antitrust experience includes assessing alleged price- and wage-fixing conduct, exclusionary conduct including restrictive covenants, and worker classification and competition in digital platform markets.
The views and opinions expressed in this content are solely those of the authors, do not necessarily reflect the views of the firm, and should not be construed as professional advice.