From: thf2@ellis.uchicago.edu (Citecheck Hell)
Subject: Re: the MIT anti-trust case
Followup-To: soc.college,sci.econ
Reply-To: thf2@midway.uchicago.edu
Organization: University of Chicago Computing Organizations
Date: Mon, 28 Sep 1992 20:37:08 GMT

Followups to soc.college and sci.econ.

In article <1992Sep28.184559.9971@news.yale.edu> (J Klein) writes:
>> The Overlap Group was a way to keep its members from breaking ranks.
>> 
>> >Furthermore, I doubt that the consent agreement will change the total
>> >amount of financial aid that any school grants; rather, it will
>> >slightly change the distribution, in a semi-random manner.  
>> 
>> There's financial aid, and there's financial aid.  Much of the financial
>> aid granted by the Overlap Group was faux financial aid that reduced
>> the monopoly price to a level closer to a competitive level.  
>
>Two things: 1.  Universities outside the overlap group were increasing
>costs at approximately the same rates as those inside the group.

Public universities were actually increasing at a lower rate, I believe.

In any event, this result shouldn't be surprising.  A tariff on Caribbean
sugar allows American sugar producers to sell at a higher price.

>												2.  Besides economic efficiency, there are other issues to
>consider.  The notion of "need-based" financial aid disappears with this
>decision.  

There's no evidence of this being true other than self-serving comments
made by Overlap members.  (And there were and are many schools that offer
need-based financial aid that have never been in the Overlap Group.)

Furthermore, the decision does nothing of the sort.  It only mandates
that colleges not conspire to set the need-based financial aid at
an arbitary level and then refuse to augment it.

>Schools will simply now offer the most they can to the best
>students.  Since before the decision no money was going to rich students,
>and since now universities must compete for rich students too

Universities have always competed for rich students.  Nothing in the
decision requires them to give financial aid to "rich" students.  A
college can still choose to refuse to give financial aid to whomever
it wants.  It just can't be protected from the consequences of that
decision should another college choose to grant that student financial
aid.

>, a
>substantial portion of the money that used to go to poor students who
>couldn't afford to go to an Ivy, now will go to richer students, thus
>potentially eliminating a class of brilliant but poorer students from
>accessing the benefits of an Ivy.  

Once again, assertion without proof.  All this decision means is that
the poor student might not see uniform offers of $8,000, $8,000, and
$8,000.  Instead, one college will offer her $6,000, but another will offer
her $9,000, and a third might offer her $10,000.  You're assuming the
colleges will continue to grant aid in lockstep, which simply won't be
true.

>Indeed, since poorer students often have
>lower SATs and no prep education, the problem of access is exacerbated.

SATs *are* access.  It's the only way a kid from Inner City Podunk has
a chance to show that she got as much from her high school as someone who
was buggered at Exeter.  My straight A's at an unknown public school in
New Orleans wouldn't have had a chance against a B student in Andover if
there weren't SATs. 

And once again, there's nothing in the decision that requires financial
aid to be tied to SATs.
-- 
           .. . . .  .  .   .    .     .     .    .   .  .  . . . ..
          ted frank | thf2@midway.uchicago.edu | standard disclaimers
         the university of chicago law school, chicago, illinois 60637
Newsgroups: misc.legal,rec.arts.books