By Hillary Pettegrew, Esq.
Several well-publicized antitrust actions targeting education over the last five years have resulted in multimillion-dollar settlements. These cases highlight the importance of understanding the legal and financial risks that higher educational institutions face and how higher education leaders can mitigate them.
Educational Antitrust Issues
Higher ed institutions are subject to federal antitrust laws including the Sherman Antitrust Act1, the Clayton Antitrust Act2, and the Federal Trade Commission Act3. These laws seek to promote marketplace competition and prevent unfair business practices.
In 2020, the National Association for College Admission Counseling (NACAC)4 settled a Department of Justice (DOJ) case over rules that allegedly violated the Sherman Act by restricting NACAC members’ ability to recruit applicants and transfer students.
Private lawsuits filed in 2022 and in 2024 accused “elite” private institutions of colluding to limit financial aid awards to students5. Ten schools sued in the first lawsuit and settled in 2024 for $284 million6, while two more reached settlement agreements in January 2025 worth over $35 million7.
Other practices8 may violate antitrust laws, including “anti-poaching” agreements (agreeing not to recruit faculty, other employees, or students from each other) and agreements to limit employee compensation or benefits. These agreements do not have to be formal, explicit, or written to violate the law. Sharing certain sensitive data, such as wage information, with other institutions also can violate antitrust laws.
Reduce Your Risk With Proactive Steps
Antitrust litigation is complex and costly. Increasing public anger over rising costs of education and a perceived absence of transparency from institutions may fuel future lawsuits.
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