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Mere Grandstanding?


By Emily M. Bernstein

IN accepting the incomplete reports on the facts unearthed by and the motives of the Justice Department probe, the staff is falling under the spell created by the political grandstanding of the Bush Administration. This probe is yet another effort to attack relatively unimportant issues while avoiding the innumerable problems facing the country.

Although there is no question that higher education prices are high--and similar from school to school--this is not necessarily a product of overt collusion. Schools could very well raise their prices to match those of other institutions without explicitly setting a price. In addition, there are many fixed costs that colleges must bear, such as competitive salaries for professors and making up for the appalling lack of federal funding for everything from financial aid to necessary research.

Even if these schools were found to fix the price of higher education, the majority neglected to consider the argument that students should not choose schools on the regular free-market model of lowest price.

Most important, if the Justice Department finds that these schools have violated the Anti-Trust Act--a conclusion that is likely given the government's need to produce results since it has so far only spouted rhetoric--it will simply demand an end to such practices without allowing for a new form of regulation. And an end to the "overlap group" and other such discussions among schools will mean an end to the practice of setting across-the-board financial aid levels according to need.

The staff ignores this inevitable effect when it dismisses the financial aid issue as irrelevant to the investigation. If the department deregulates the education industry, it will leave schools to compete for top students by offering higher and higher aid awards, rather than setting those awards according to need. By offering inordinately high financial aid packages to some students, colleges will insure that there is less money available for the majority of students--a result that is certainly not "in the best interest" of the country as a whole.

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