Washington, D.C. -- The scope of the Justice Department’s investigation into possible tuition and financial-aid price fixing by private colleges and universities has increased dramatically within the last week.
Federal officials originally said they were investigating possible Sherman Antitrust Act violations at 20 private colleges, but a survey by The Chronicle has found that at least 40 institutions have received requests for detailed information about their tuition, financial-aid, and budgetary practices.
Fourteen institutions received requests from the Justice Department in August (The Chronicle, Sept. 6). Then last week, spokesmen for 26 additional institutions confirmed that they had received packets containing “civil investigative demands,” which are similar to subpoenas, and a lengthy list of questions regarding tuition and fee data, faculty and administrative salaries, and financial-aid policies.
Federal officials sent their requests to all of the 23 institutions in the Overlap Group, whose representatives meet each year to discuss financial-aid requests from their often-overlapping pools of applicants: Barnard, Bryn Mawr, Dartmouth, Mount Holyoke, Smith, Vassar, and Wellesley Colleges; Brown, Columbia, Cornell, Princeton and Yale Universities; the Massachusetts Institute of Technology; and the University of Pennsylvania.
The Justice Department also sent requests to 12 other institutions: Bennington, Converse, Mary Baldwin, Oberlin, Randolph-Macon Woman’s, Sweet Briar, Wells, and Wheaton Colleges; Johns Hopkins, Northwestern, and Stanford Universities; and the University of Southern California.
The Justice Department has declined to say what prompted the inquiry. However, some higher-education officials speculated that spiraling increases in tuition rates finally sparked a demand for action from politicians and the public.
Irene W. D. Hecht, president of Wells College, said: “Tuition rates keep increasing. I always knew that at some point we were bound to hit that borderline, and my hunch is that we’re right at the line.”
But Robert M. Zemsky, director of the Higher Education Research Program, said: “The question is, Are we in collusion in setting our prices? And the answer is No. We don’t do that and we’ve never done that.”
The real problem is that higher education has to make fundamental changes in the way it develops budgets and operates institutions, Mr. Zemsky said in a position paper just released by the research program.
According to the paper, tuition costs should be determined at the beginning of the budget cycle, rather than at the end. That would force institutions to live within the constraints of fixed budgets, rather than raising tuition rates to cover costs.
“The Justice Department doesn’t understand at all how colleges and universities operate,” Mr. Zemsky said. “There are real issues about cost and how institutions operate that need to be discussed in the open. What the Justice Department investigation does, ironically, is drive up the cost -- because it is very expensive to supply them with truckloads of information -- and it chills the very discussion that needs to take place.”
