Cause for Concern

WHY the fuss over alleged university tuition- and price-fixing, many have asked since a broad U.S. Justice Department probe became public last August.

The inquiry, into more than 60 colleges and universities nationwide, reaches back at least five years and concerns all financial transactions in the institutions regarding tuition, faculty salaries and financial aid. Since August, much ink and breath has been spent justifying only the practice of jointly setting financial aid packages for undergraduates.

But that defense misses the point of the investigation. The most serious allegation, that the institutions practice collusion in fundamental business transactions that cost the public millions of dollars, has hardly been addressed.

UNTIL now, university managers have crafted the strongest defense for a tangential element of the Justice investigation. They say the practice--particularly among an "overlap" group of 23 elite Northeastern colleges that includes Harvard--of sharing applicants' financial aid data serves the public by preventing "unethical bidding wars" for top students.

The legal argument works like this: While the 1890 Sherman Anti-Trust Act prohibits private corporations from colluding to set prices or any other business arrangement in private, exceptions apply in cases that serve the public interest. Universities contend that by agreeing on fair financial aid awards among themselves, they deliver more aid to more deserving students.

BUT that's only one small part of the story. Whether the "bidding war" argument is valid or not, less compelling are arguments that the most expensive colleges in America should be allowed to set tuitions together, often before their financial information becomes public, as now appears to be the case.

It's a fact that tuition, room, board and fees for seven of the eight Ivy League schools fall within a 2 percent range of each other. Further, a group of northeastern schools annually cite each others' price raises to justify pushing their own fees into the $19,000-range, far in excess of inflation. Finally, some of the schools admit to sharing the range of their tuition increases with each other well in advance of public notification.

The threat is this: the schools, perhaps believing that they are acting for one institution--"American higher education"--may be bilking the public and their own staffs, faculty and students by not aggressively keeping costs down and arranging salaries, housing costs and other fees in the open market.

The universities have remained silent on this issue. Harvard, in its own statement released two weeks ago, two months into the investigation, states merely it will correct any practices found to violate federal law.

IN the words of one critic in August, "This is the arrogance of an elite which is absolutely certain it knows what is best for everbody." In lay terms, there is further justified cause for concern any time a group of 23 elite Northeastern colleges--or about 60 colleges nationwide--get together to set prices for one thing they define as "education".

Possible inequities touch both consumers at the institutions and their competitors--for example, who is to decide that only 23 or 60 schools should share financial aid or financial information that might benefit all schools? On the flip side, many other schools not involved in these meetings essentially set their tuition levels from them, reasoning that higher price automatically generate greater prestige and more applicants.

IN a day when higher education is big business, when "prestigious" diplomas mean as much as they ever have, and financial scandals seemingly touch almost all the nation's most respected institutions, it does not seem too much to press harder for open information from the schools themselves. If they do not owe it to Justice Department investigators, they owe it to their own pursuers of the truth.