From: thf2@ellis.uchicago.edu (Citecheck Hell)
Subject: Re: the MIT anti-trust case
Reply-To: thf2@midway.uchicago.edu
Organization: University of Chicago Computing Organizations
Date: Tue, 29 Sep 1992 03:36:34 GMT

In article <1992Sep29.013608.16854@news.yale.edu> (J Klein) writes:
>On the other hand, just about every private university was increasing at
>that high rate (and continue to do so, even after the decision), therefore,
>overlap was not the only cause.

Take some price theory some time.  The Overlap Group acted as price-setters.

>> >												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.)
>
>		Hey, first thing, out with the ad hominem attacks.  Second, there is

What ad hominem?  The only evidence that need-based aid would be killed
is that the Overlap has been holding it out as a bogeyman if the decision
went against them.  The district court's opinion neatly dissected that
fallacy.

>evidence:  ask any financial aid office, and see argument below.

Financial aid offices have ulterior motives for claiming this.  They
still hope to win on appeal--they're not going to go and say "Gee, I
guess we were just being collusive bastards.  Okay, students who we've
ripped off over the last twenty years--come and sue us for treble
damages now!"

>> 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.
>
>		Correct.  Universities are not forced de jure to compete for rich
>students, only de facto because of competition.  However, de facto results
>must be taken into account in a good decision.

No, the law must be taken into account.  What the universities were doing
was illegal.

Price-fixing was bad for all students, rich and poor.  See Rich Morrison's
Comment on the subject.

>> 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.
>
>		NOT an "assertion without proof" but a logical economic argument. Taken a
>fixed amount of resources, if some money is re-allocated to richer students
>and therefore away from poorer students, the redistribution now favors the
>rich.  This change is a qualitative one, one I would argue is bad.

There isn't a fixed amount of resources.  Colleges were wasting a lot
of money because they could.  (As would be predicted by standard economic
theory on monopoly: see Posner, _Antitrust Law_ at 14-15).  And, once
again a lot of the "resources" were faux resources: if a college is
charging $20,000 a student rather than a competitive price of $16,000
a student, it might very well be the case that a poor student has her
financial aid reduced from $3,000 to $0 -- but the poor student is still
better off under the competitive system than under the monopolistic system.

And, if colleges really cared about need-based financial aid, rather than
just giving lip service to it, they can keep it.

Colleges will be competing for poor students as well as rich ones.  All
students will benefit.  What might lose out is Stanford's yacht, or
Yale's football stadium.  

>> >Indeed, since poorer students often have
>> >lower SATs and no prep education, the problem of access is exacerbated.
>> 
>> And once again, there's nothing in the decision that requires financial
>> aid to be tied to SATs.
>
>Your case is relevant but counterfactual.  You may have beaten the
>statistics, but most poorer students haven't.  True, financial aid is not
>required to be tied to SATs, etc. by the decision, but that is how schools
>determine the merit of an applicant and if the applicant would be headed
>for success at their school.

Poorer students do worse on the SATs because poorer students, on average,
get worse educations in elementary and high schools.  Attacking the SAT
is attacking the symptom, rather than the problem.  Improve the educational
system so that poor 12 year-olds get the same education as rich 12 year-olds,
and the SAT gap will disappear.

And why do you assume that a college will choose to recruit solely on
SATs?  There has never been a top university that looked at SATs and SATs
only--why do you think that because they're told to stop breaking the law
they'll suddenly switch to an irrational method of choosing which students
they want most?
-- 
           .. . . .  .  .   .    .     .     .    .   .  .  . . . ..
          ted frank | thf2@midway.uchicago.edu | standard disclaimers
         the university of chicago law school, chicago, illinois 60637
Newsgroups: soc.college