The Analytical Economist; November 1993; Scientific American Magazine; by Judith Fields; 1 Page(s)

Should elite universities such as Harvard and Cornell be allowed to consult with one another (some may say collude) on their offers of financial aid in order to avoid competing for the most desirable applicants? Can this "price ffxing" be justiffed if it stretches aid budgets further? Does it mean that more minority and low-income kids can attend? Do we all bene fft from having a diverse mix of students at the most selective private universities? Is such an arrangement fair if it reduces the size of the scholarships going to individual students at the top of the heap--the ones for which the schools might otherwise have a bidding war?

In 1991 eight Ivy League colleges signed a consent decree ending their practice of sharing information on ffnancial aid, faculty salaries and tuition, after the U.S. Department of Justice brought a civil antitrust suit against them. The Massachusetts Institute of Technology alone refused to sign and was tried and found guilty of price fixing. In September of 1993, M.I.T. won an appeal of this ruling. The Department of Justice has not decided whether to pursue the matter further.