Supreme Court to Weigh Limited Use of Race in Admissions, Antitrust Case Against Elite Schools

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On Jan. 24, 2022, the U.S. Supreme Court agreed to hear two cases on the use of race in undergraduate admissions: one involving Harvard and the other involving the University of North Carolina–Chapel Hill.

As McGuireWoods discussed in December 2021, the Supreme Court may use these cases to reconsider Supreme Court precedents that allow for the limited consideration of race in admissions. The plaintiffs in the case, Students For Fair Admissions, hope the court will end the use of race in admissions decisions at all colleges and universities. Many believe it is possible, if not likely, that the current Supreme Court will be receptive to that outcome.

Admissions and Antitrust

On Jan. 9, a class action lawsuit related to admissions and financial aid was filed in the Northern District of Illinois against 16 elite private schools. The lawsuit alleges that the institutions conspired to suppress financial aid awarded to students.

Specifically, the lawsuit alleges that nine of the universities considered a student’s ability to pay tuition in the admissions process in various ways. The plaintiffs argue this alleged practice of engaging in need-aware admissions renders the schools unable to qualify for an exception to the antitrust laws that allows the schools to work together on financial aid calculations so long as their admissions practices do not take into account a student’s ability to pay.

The lawsuit comes on the heels of the U.S. Supreme Court’s antitrust decision in National Collegiate Athletic Association v. Alston, in which the court unanimously held that the NCAA is not exempt from the normal application of antitrust laws. Moreover, there is currently an antitrust lawsuit pending in the same federal court in California that initially decided Alston, in which student athletes seek damages against the NCAA and Power Five conferences for allegedly violating the antitrust laws by previously restricting their ability to profit from their names, images and likenesses.

These cases, taken together, signal an uncertain time for college and university admissions, and a potential increase in antitrust actions in higher education. Please contact Sarah Wake, Sarah Zielinski, Christina Egan or Jonathan Ellis if you are interested in learning more about best practices in admissions, conducting a review of your admissions practices, or considering how the antitrust laws could impact your institution.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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