Company Ordered To Stop 'Misleading' Students on College Admission Sites

• By Dian Schaffhauser
• 04/25/08

A federal judge is ordering a "clean-up" of language presented on a company's Web sites that help students apply to colleges after a competitor filed suit charging that the Web sites deceived users. CollegeNET filed the suit against XAP, citing patent infringement and unfair competition. Both companies offer Web sites through which students can apply to multiple colleges and universities for admission and financial aid.

According to the lawsuit, XAP provided the service free to participating schools and resold the data it collected from applicants. When students checked a "yes" option on XAP-run websites, the suit said, they may have believed they were applying directly to specific schools, whereas they were actually consenting to the sale of their personal information to third parties. CollegeNET believed it was unable to compete with those sites because it had to charge participating schools for online college application services.

The lawsuit is chapter two in a continuing legal battle between the two firms. A previous lawsuit ended in a $4.5 million damage judgment for CollegeNET, an award the company said it believes it may not be able to collect. This latest legal battle addressed two affiliations XAP maintains with public agencies, one with the Kentucky Higher Education Assistance Authority and the other with the Georgia Student Finance Commission.

For its part, XAP contended that it has made the language surrounding the opt-in questions clearer and that it no longer sells student information. CollegeNET pointed out that XAP collects revenue in the hundreds of thousands of dollars a year from the Kentucky and George agencies. It is the schools under those two entities that can use XAP's online application process free of charge, whereas they'd have to pay CollegeNET for the same service.