Harvard in Hot Water Over Anti-Trust Laws

When the anti-trust division at the Justice Department talks, people listen.

Just ask the administrators of some 20 private colleges, including Harvard, who spent the summer scrambling to comply with federal subpoenas in what is believed to be the first-ever investigation of alleged university price-fixing.

Justice Department officials say the schools, mostly "elite" northern colleges, may be illegally sharing information about tuition and financial aid. As a result, they say, the schools may be able to unfairly inflate tuition costs.

The colleges, however, say they've done nothing wrong.

They openly acknowledge that financial aid information is shared to prevent an "unethical" bidding war over students. As for tuition-fixing, they say their budgets are made in such an open fashion that shared data is almost inevitable.

But as non-profit institutions, they say it's all for the public good.

Since anti-trust legislation has historically been less strictly enforced for non-profit institutions, both college officials and legal experts are wondering why the Bush anti-trust division--known for its laxness during recent Republican administrations--is suddenly pursuing the case.

One possible reason: Attorney General Richard L. Thornburgh has reportedly encouraged the investigation because he saw "waste" at Harvard, where he was head of the Institute of Politics for the year before being named to his Justice Department post.

But others say the investigation is simply a reflection of Americans' frustration with the steadily climbing cost of a private college education.

Either way, most agree that the schools are in legal hot water, and could face serious penalties if the allegations prove true.