June, 2013
Washington -- "Unspeakably strange" was the way one college president described a recent anti-trust letter from the U.S. Department of Justice regarding the college's efforts to bring about student aid reform.
I agree. Although I work with the Justice Department to recover false claims under the Higher Education Act, this DOJ move seems to me hugely counterproductive as it will set back the cause of needed reform for years.
All this particular college, and others like it, wanted to do was discuss with other colleges ways to stop the merit-aid arms race that has resulted in runaway tuition hikes, increased aid to those who don't need it, and saddled the lower-income with unprecedented student loan debt.
And the Justice Department wants to stop discussions of reforms among the colleges that need them? What is DOJ thinking? Is DOJ oblivious to the national crisis brought about by excessive student loan debt?
Actually, there is illegal trust behavior among colleges on student aid, but it's not what DOJ is targeting. Colleges routinely violate the Student Right to Know Act by treating their student aid distribution methods and amounts as confidential and proprietary information. This is expressly prohibited by the SRTK codification at 20 USC 1092. If the amounts and methods (often contracted from enrollment management companies) were open to students and their families, as prescribed by SRTK, the transparency would lead to better informed consumers and the enhanced competition that DOJ presumably is seeking.
If DOJ persists with its investigation, colleges that want reform could turn to Congress and ask for reforms to be enforced upon them. This is not far-fetched, as many colleges have acknowledged that the current arms-race system is so entrenched that no single college or even group of colleges can break away without fearing institutional suicide. Freedom of assembly and freedom to petition the government presumably are still beyond the reach of DOJ.
