Possible Collusion on Aid, Tuition by Colleges Probed

The Justice Department is investigating financial practices at up to 20 prestigious colleges and universities, apparently to determine if they have violated antitrust laws in setting tuition and financial aid packages.

Institutions ranging from Harvard University to Colby College in Maine have received “civil investigative demands” in the past few weeks from the Justice Department’s antitrust division requesting documents on tuition and fees, student aid, budget and other financial matters, school officials said Tuesday.

Justice Department officials confirmed the inquiry but would not elaborate on the nature of the investigation or name the institutions involved.

Officials at several institutions said the documents requested make it clear that Justice Department investigators are interested in whether the schools illegally colluded when setting tuition and determining the amount of financial aid students could receive.

Information Sought

The officials said they also have been asked to provide information on expense accounts, travel vouchers and telephone logs for employees involved in strategic planning and setting tuition, financial aid and salaries.

College costs, which surpassed $20,000 annually at the most expensive institutions last year, have risen faster than inflation for eight years. The annual announcement of tuition increases--to be made Thursday by the College Board--has stirred debate over whether costs have risen unnecessarily.

Tuition at many elite Eastern colleges and universities falls in the same general range and tends to rise at about the same rate each year. Also, financial aid officers at more than 20 East Coast institutions gather annually and agree on aid packages to be offered to students who have been accepted at more than one school.

In addition to Harvard and Colby, officials at the following institutions confirmed that they have been ordered to submit financial documents: Wesleyan University, the University of Chicago, Amherst College, Williams College, Bowdoin College and Tufts University. Sources said as many as a dozen other institutions may be on the Justice Department list.

An obvious target of the investigation is the annual practice among 23 prestigious institutions--including the eight Ivy League schools--of sharing information on the financial aid packages to be offered students. The result is that a student who is offered $8,000 in aid by Harvard will probably be offered the same amount from Brown University and Dartmouth College.