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Overlap Decision May Spawn Suits

By Karen Kaplan
Executive Editor

Wednesday's ruling that MIT violated antitrust laws by discussing financial aid awards with members of the Ivy Overlap Group may expose the Institute to lawsuits from students, lawyers said yesterday.

Also, new federal legislation may allow MIT to continue to meet with colleges and universities to discuss financial aid awards in Overlap fashion, so long as they do not discuss the awards of individual students.

Students who feel the Overlap Group meetings denied them higher financial aid awards may file lawsuits against MIT and other Overlap schools to try to recover the lost aid. But the combination of a four-year statute of limitations on antitrust cases and the fact that the Overlap Group has not met in three years means that only the Class of 1992 would be eligible to sue.

Kenneth D. Campbell, director of the MIT News Office, said no suits have been filed against MIT so far, and that MIT is taking no precautions against such a suit.

Although the eight Ivy League schools signed a consent decree agreeing not to continue Overlap meetings, they did so without admitting liability. Thus a student suing one of those schools would have to prove that the school violated antitrust rules. This is not the case for students suing MIT, since Wednesday's decision has already implicated MIT as breaking antitrust laws.

Because a trial against one of the universities would be very expensive, a class action suit would be more likely to arise than many individual suits.

Robert Block, chief of the Professions and Intellectual Property Section of the Antitrust Division of the Department of Justice, which was responsible for the case, said it was hard to predict whether students would try to recover lost financial aid through lawsuits against the Institute and other Overlap schools.

"It's very difficult to tell whether they'll be any follow-on cases," Block said yesterday from Washington, D.C. "Each individual has to assess how they feel about their own circumstances before they make that decision."

Overlap may continue meeting

Recent Congressional action may allow MIT and the Ivy League schools to start meeting again to discuss financial aid awards without penalty. The Higher Education Amendments of 1992, passed shortly after the conclusion of the Overlap trial, will make some of the behavior that was the subject of the lawsuit legal for two years, according to a footnote in U.S. District Court Judge Louis C. Bechtle's 49-page decision.

The law explicitly forbids schools from discussing financial aid awards for particular students who were admitted to more than one school within the Overlap Group, which Bechtle found was a violation the Sherman Antitrust Act. But the main section of the new law does permit schools to discuss among themselves strategies for awarding financial aid, which the Justice Department alleged was a violation of antitrust laws.

According to the amendments, higher education institutions may "voluntarily agree with any other institution of higher education to award financial aid ... to students attending those institutions only on the basis of demonstrated financial need." Schools are also granted power to "discuss and voluntarily adopt defined principles ... for determining student financial need."

Staffers in the Washington, D.C., office of Claiborne Pell (D-R.I.), who sponsored the bill containing the revised amendments, said they did not know how many Overlap-type activities are legal under the new law.

"They certainly can not agree on individual financial aid awards," Block said. "I don't think (the Overlap schools) can go back to agreeing on a formula for financial aid similar to what they were doing before," but any determination beyond that is a question of interpretation, he said.