The Free Agency Applicant

What do a couple of big private universities have in common with the "white collar" crimes of overleveraged corporate conglomerates of the '80s? True, the decade of corporate excess left even the academic world tainted--from the president of Stanford University, who "appropriated" federal grants for home improvements, to the Yale president who decided to forego his comfortable (albeit quasi-academic) appointment to go into business in a completely forprofit "educational" enterprise. Still, it seems odd that the government should focus its antitrust wrath on MIT and eight Ivy League schools.

Recently, a Federal Appeals Court returned to the lower courts a prior decision that found MIT guilty of breaking the Sherman Antitrust Act. According to the original verdict, the school had joined Ivy League colleges in "price-fixing" financial aid. The universities had been convening annually to ensure that mutual applicants would receive identical aid packages. All of the Ivies quietly acquiesced to out-of-court settlements that required them to cease the "data sharing." But MIT stood behind its beliefs, and went to court.

What was surprising? The suit itself, which was concerned not with questionable use of funds, but with giving funds to needy students. Finally, the government seemed to be taking an interest in the college applicant's financial status. Unfortunately, that interest was grossly misdirected.

The applicant applying to four top schools would certainly find it traumatic if all of the said schools convened to discuss his or her candidacy, even if the discussion was restricted to the question of aid. It is outrageous that universities can disclose information of any kind to other schools to which they apply.

Taking this stance, the lower court argued that in "setting" aid levels for each mutual applicant, the schools involved were essentially guaranteeing that aid offers were comparable--and artificially low. In short, the schools may have been cheating financial aid applicants out of deserved financial assistance.

The lower court's ruling should have comforted anyone who applied to several of the nine schools involved. The decision ensured that the schools would now take every applicant at face value. Only in the absence of "price-fixing," the court argued, could the student find totally "need-blind" admissions. Above all, the ruling gave the outstanding student a new marketability: With consultation forbidden, the universities would be forced to bid each other to offer the best aid package.

The "bidding" forced by the lower courts' decision compounds a general admissions climate of increasing competition for a waning applicant pool. In the last few years, numbers of high school seniors applying to college have dwindled, forcing schools to put out rigorous efforts to attract good students.

In my high school class, a stellar fellow student whose credentials would easily have admitted him to any school in the country (he had come close to completing a mathematics/engineering B.A. while still in secondary school) choose to sell himself to tiny Wabash State College in rural southern Indiana for the price of an all-expense-paid education.

Outstanding students who fill in an innocuous-looking bubble on the SAT application are inundated with piles of brochures and catalogs--the junk mail of the educated world. Further on in the process, they might be recruited, with all the associated perks--"red carpet tour days," "dinners with the dean," large aid packages, and in some cases, full scholarship offers.

This trend presents several sticky issues. The current atmosphere of fierce competition between universities distorts the student's final matriculation and sometimes even the application process. Disparate financial aid offers can easily become the deciding factors in last minute decisions. Moreover, tempting offers may increasingly force many students to reconsider the very schools to which they apply.

Applying to college is becoming akin to declaring free agency. Ultimately, the issue of finding the most suitable school is obsolescent to a large majority of students seeking aid: The burning question is no longer which is the better school, but which school offers the "better buy." Longtime the domain of professional athletes who have achieved free-agency--the practice is to sign with whichever team makes the best offer (for the running back Rocket Ismail, this meant playing in Canada instead of the NFL)--we cannot ethically superimpose the practice on college admissions.

This deregulation of aid policy is as damaging to the schools as it is to prospective students. The top schools are forced to waste valuable resources on recruiting, in fear of losing their top prospects to other schools. Smaller schools that want to compete in the big league are shelling out huge amounts to keep toeholds on the same applicants. Finally, incredible offers by Wabash States dampen the ability of a top school to hand-pick its incoming class (judged by the percentage of admits who matriculate).

In its recent ruling, the Federal Appeals Court sent the case back to the lower court, urging the judge to examine the argument that the social benefits of the overlap policy outweighed its anticompetitive nature. Consorting annually about financial aid, then, might not violate anti-trust laws. But the real significance in this case lies not in the final verdict, but in what it implies about the financial aid system.

While there is a strong argument for equalizing financial aid--why should a prospect become more needy at one school than another, given relatively equal tuition?--the practice of admissions "overlap" is a dubious one at best. Whether or not MIT took part in "price fixing," the financial aid system as it now stands encourages a flagrant excess of academic recruiting.

Awarding financial aid must be completely separated from the admissions process to do justice to both the student and the university. In fact, financial aid should not even be part of the admissions process in a truly need-blind system. An admit or prospective applicant should be able to choose a college without considering aid; perhaps financial aid packages could be allotted based on a national standard after the student matriculates.

In drawing up the MIT case, the lower court dramatically missed the boat. Admissions officers are not the Boeskys and Milkens of the academic world, nor are MIT and the Ivies insider-trading conglomerates. The real crime to "stock-holding" students is the lack of government interest and involvement in restructuring the financial aid system.