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Universities wary of Justice probe

By Prabhat Mehta

MIT is one of 55 private colleges and universities currently under investigation by the Justice Department for possible antitrust violations. Two intercollegiate consortiums are fully represented in the group of 55 schools, leading many experts to believe the Justice Department is focusing on possible collusion within these groups.

MIT is part of a 23-school consortium called the Overlap Group. Members of the Overlap Group meet after admissions decisions have been made to compare financial aid packages and other information on students. All 23 schools -- which includes the Ivy League -- are under investigation.

In addition to the Overlap Group, all 12 of the Great Lakes Colleges Association schools and eight women's colleges are complying with the investigation.

This may be the largest antitrust investigation that the Justice Department has ever initiated.

Struggling to comply

At MIT, the task of compiling and submitting the information on tuition, faculty and administrative salaries, and student financial aid has been delegated to the office of Vice President for Financial Operations James J. Culliton. According to Culliton, this task has become "a very, very large burden."

Like the other institutions under investigation, MIT has had to keep a team of lawyers and hire special employees to sift through financial documents and decide which ones need to be sent. Since the Justice Department requires that all documents submitted be originals, MIT must replace the documents it sends to Washington with copies.

Although estimates have not yet been made on the cost of complying with the investigation, Culliton said that it would be high, because in addition to the mounting direct costs (legal fees, salaries for special employees), opportunity costs would have to be taken into consideration. These costs include the extra time administrators and staff members have been spending on the investigation.

And the extra time has been adding up. The Justice Department informed MIT that it would be investigated on Sept. 6, and set Sept. 28 as the deadline for compliance. But the slow pace of information-gathering required MIT to negotiate an extension to Nov. 10.

Adverse impact on

intercollegiate relations

Culliton acknowledged that MIT, like the other schools under investigation, has been advised by its lawyers to comply without any assistance or coordination with other universities. "We have been advised not to comment upon our compliance," he said.

The desire to comply unilaterally, without any joint statement of opinion on the investigation, is a result of practical concerns, Culliton said. The result of such independent action, he acknowledged, was an increasingly strained relationship with peer schools.

One of the reasons why schools have failed to react collectively is that no one in the academic community knows for certain how or why the investigation began in the first place, Culliton said. "No one said what the intent was ... or why [they chose] higher education," he said.

This confusion, in turn, has led to a growing anxiety over what the possible outcome of the investigation will be. "Anybody could speculate on the outcome," Culliton said.

As for the Overlap Group, there is no clear future, according Culliton. Since the Group does not assemble until after admissions decisions are made, its future will depend on further developments in the investigation.