After Overlap, fin. aid changes

During the antitrust trial of the Massachusetts Institute of Technology two weeks ago, lawyers debated whether students would be better off if top universities did not meet to determine financial aid. A partial answer emerged: Some are already better off. Stanley Hudson, MIT's financial aid director, testified that several students said they were offered more financial aid by Ivy League schools than by MIT this year. Aid directors at some Ivy League schools are also noticing a new phenomenon since financial aid meetings between MIT and Ivy League schools ended last year. William Schilling, the University's financial aid director, said between 30 and 35 students accepted by the University this year called with news that another Ivy League school had offered a more attractive aid package. Jim Miller, Harvard University's financial aid director, reported a similar experience. He said his office has seen "a larger divergence" than in the past between Harvard's aid awards and those of its Ivy League rivals. And Caesar , associate director of undergraduate financial aid at Yale University, said a number of students had asked Yale to hike its aid package to meet more enticing offers from other schools. All three said the small number of disgruntled aid recipients is not causing a problem . . . yet. But they agreed that some schools might use money as bait for prospective students someday, even though all three said their schools would not. "We want to be as clear as we can that we're not playing that game," Miller said. "We will only respond to people with legitimate financial concerns." From the 1950s until last year, MIT and the Ivy League schools -- known together as the Ivy Overlap Group -- jointly determined financial aid. The federal government, however, considered it a form of price-fixing and a violation of antitrust laws. Only MIT pursued the case to trial. The Ivy League schools, including the Univerity, stopped meeting to avoid a lawsuit from the Justice Department. U.S. District Judge Louis Bechtle is expected to announce a verdict in the antitrust case within weeks. The outcome of the trial will likely determine Overlap's future. A government win would probably mean no more meetings, but a judge might let the financial aid agreements resume if MIT prevails. The agreements were designed so that a needy student admitted to more than one of the Overlap schools would receive roughly the same amount of aid from each school, letting students choose between them for academic or other reasons. Now schools risk losing students if another college offers more financial aid money. Harvard's Miller said "there is certainly that fear. I'd be less than truthful if I said we don't do it with some trepidation, but we do it." Now that former Overlap members can no longer cooperate on financial aid in general or on specific cases, aid awards have begun to vary more than usual. "The biggest difference is that we used to be able to talk about a case as if we were one big financial aid committee," Storlazzi added. "Now we're seeing the differences after the fact." This year, Hudson said he could not understand the larger amounts of some aid awards from schools such as Yale, Princeton and Cornell. Without the Overlap agreements, schools might be using a different definition of financial need. One of the arguments made by Overlap supporters -- including MIT lawyers -- is that the absence of guidelines for schools will increase the temptation to change policies. Ultimately, supporters argue that Ivy League schools will begin offering merit scholarships -- barred under Overlap -- in order to stay competitive with each other. But Schilling said he would be "surprised" if there was a move among Ivy League schools to merit-based aid. "There is at Penn a strong committment to need-based aid and we would be reluctant to part from it," he added. Echoing lawyers for MIT, Miller criticized merit scholarships because of their drain on need-based financial aid. "A merit scholarship program to my mind is a zero-sum proposition," Miller said. "If we're giving them on merit, we're taking them from somebody else [with need]." Schilling said that this year, the University tried to get "as close as possible to the other award if we could understand some basis for why the difference was there." In many of those cases, Schilling said the Overlap meeting would have brought the University's award more into line with the others. But he said now the only way to see whether the aid should be changed is to look at the University's own file. Storlazzi said this change has forced aid officials to make "informed guesses" on whether the other school had a good reason for offering either less or more. "We take a look at the application to see if there is something we overlooked, like an unusual expense," he said. "If we can't see that any change would be appropriate, we're not going to make a change."

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