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Schools Wonder if Inquiry Is Changing Focus

Federal Antitrust Probe

By Tara A. Nayak

As a massive federal investigation into possible antitrust violations by prestigious colleges continues, Yale University and at least one other school have announced that they are withdrawing from financial aid overlap groups--long thought to be the center of the inquiry.

But now it is unclear whether financial aid practices are still a major part of the probe, since the Justice Department is--temporarily, at least--focusing its investigation on tuition setting.

The overlap groups--of which Harvard is a member--meet several times each spring to discuss the financial aid packages offered to students admitted to more than one of the member schools. The schools say they deliberately try to offer similar packages to each student, so that the students do not have to choose their college based on price alone.

But since the Justice Department began investigating financial aid and tuition setting practices last summer, observers have said the overlap groups might represent a violation of antitrust laws. As a result, Yale and at least one other schools have reportedly withdrawn from the groups.

"There's probably enough antitrust risk given the state of the law that I would have to tell [the schools] to stay out of [the overlap groups]," a lawyer representing one of the 58 schools under investigation said yesterday.

But officials at several colleges say that recent information requests from the Justice Department suggest the inquiry may have narrowed. The second round of civil investigative demands, some sent in April, called only for information about tuition, and not financial aid.

"Maybe [the Justice Department] could see some arguments of justification with the financial aid that they couldn't see on tuition," said the antitrust expert, who asked not to be identified.

But the lawyer added that the colleges in the overlap groups should not breathe easy yet, since the probe could turn back toward financial aid at any time.

"At least for the moment, they've decided to fish in the tuition pond. If they don't catch anything there, they might go back and send another CID about financial aid," he said.

And according to one observer, second-guessing the Justice Department rarely works.

"I think the Justice Department has pretty much said, 'don't interpret this to mean anything,'" said David Merkowitz, a spokesperson for the American Council on Education.

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