Published by the MIT News Office at the Massachusetts Institute of Technology, Cambridge, Mass.
Published by the MIT News Office at the Massachusetts Institute of
Technology, Cambridge, Mass.
US v. MIT Penn. Court Denies Motion to Move Suit By Kenneth D. Campbell News Office A federal judge in Philadelphia has denied MIT's request to move the US v. MIT antitrust suit on financial aid to Boston. US District Court Judge Louis C. Bechtle, chief judge of the US District Court for the Eastern District of Pennsylvania, filed his order August 7, according to court papers. A spokesman for MIT said "The reason MIT sought the transfer to Boston was to make the litgation less costly in terms of people's time and expense. However, the judge has made his decision and we go on from here." Attorneys for MIT, appearing in court July 31, asked the judge to move the unprecedented antitrust case to the US District Court in Massachusetts, where the annual financial aid "overlap" meeting of 23 private colleges, including MIT and the eight Ivy League colleges, has taken place for more than two decades. The financial aid officers attending the professional meetings discussed the financial need of undergraduate students who had been admitted to more than one of the colleges and had applied for aid. MIT declined to sign a May 22 consent decree to which the Ivy League colleges reluctantly agreed. The colleges said they did not believe they had violated the Sherman Antitrust Act but that the cost of fighting the US Department of Justice was prohibitive. The consent decree is subject to approval by the judge. MIT maintains that its "actions in awarding financial aid based upon the demonstrated need of each applicant are consistent with and required by federal law." The Sherman Antitrust Act's strictures against private business competition do not apply to the competition among nonprofit private educational institutions and their decision as to who shall receive their charitable funds in the form of scholarships, MIT attorneys say. "This is the first time in the 101-year history of the Sherman Antitrust Act that the Department of Justice has maintained that the antitrust law applies in full force to the administration of the basic educational mission of nonprofit educational institutions," said MIT's attorney, Thane D. Scott of the Boston firm of Palmer and Dodge. The civil suit, in the opinion of Washington Post columnist Edwin M. Yoder Jr., "is perhaps the most overbearing move against private higher education in the nation's history." Yoder wrote, "It is wholly appropriate that colleges and universities guard their limited scholarship funds against bidding wars. It obviously means more aid for more students." The consent decree would allow the Ivy League colleges to agree to administer aid based on financial need in the case of athletes, but bars such an agreement for other students. The overlap meetings resulted in a net increase of financial aid offered by MIT, according to MIT's Financial Aid Office. MIT's brief said "The primary objective of Overlap is to make colleges more accessible for talented but economically disadvantaged students by encouraging the granting of financial aid on the basis of need. . . "In this case, the government contends that the principles of fiscal prudence underlying the federal financial aid system are not just imprudent but also illegal when implemented by private colleges with respect to their own charitable funds," the MIT brief said. The Justice Department case, entitled "United States v. Brown University et al," also named as defendants Columbia, Cornell, Dartmouth, Harvard, MIT, Princeton, University of Pennsylvania and Yale. The Justice Department brief opposing the motion to transfer the case to Massachusetts stated that the members of Overlap include the nine colleges mentioned, plus three other sets of colleges: Amherst, Bowdoin, Wesleyan and Williams; Barnard, Bryn Mawr, Mount Holyoke, Smith, Vassar and Wellesley; and Colby, Middlebury, Trinity and Tufts. In a July 22 op-ed article in The New York Times, MIT Chairman Paul E. Gray said, "The issue is not price fixing. There is no personal gain or profit motive involved here. In fact, it is quite the reverse: the issue concerns the fair distribution of subsidies-generated largely from private, charitable donations-to help defray the cost of education for talented students whose families cannot afford it. The Attorney General's accusations flout the 1986 law, mandated by Congress, that requires schools to give Federal aid only to those who have demonstrated need." Dr. Gray asked, "If the antitrust action prevails, what will the consequences be? Given that funds are limited, once colleges and universities are forbidden to agree on aid, some will choose to compete for students by offering them sums beyond their needs, thus reducing the amount available to other students. Admissions practices may change to give preference to students whose families can pay for college rather than those with the highest academic ability." Dr. Gray, who was president of MIT from 1980 to 1990, noted that since the Justice Department investigation began three years ago, "MIT and some 60 other private colleges have spent more than $10 million in legal fees to respond to these inquiries. These funds could have been used for scholarships. "If successful, the government's antitrust action will result in financial competition for individual students that will, over time, drive up college costs. It will erode the principle of intellectual merit as the primary factor in admissions decisions and deny many the full measure of assistance they require to attend college," Dr. Gray wrote.