The antitrust hammer hits college admissions

The antitrust hammer hits college admissions
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Until a few months ago, the National Association for College Admission Counseling (NACAC), an organization counting most colleges and universities among its members, sought through its ethics rules “to offer some consistency in deadlines, terminology, and procedures” in  admission practices. The Justice Department objected to three provisions: 1) a prohibition on incentives for students to apply for early decision admission (e.g., by offering special housing options or enhanced financial aid); 2) a ban on “recruiting incoming freshmen after May 1;” and 3) a ban on “directly recruiting transfer students from another college.”

In forcing colleges and universities to eliminate these practices, the Justice Department reminds us of an old adage: If your only tool is a hammer, every problem looks like a nail.

The NACAC rules were part of a larger effort to standardize the admission process for students and their families, limit efforts by colleges to “poach” students from each other, and make it easier for colleges to predict and manage enrollment numbers. NACAC members believe the rules were “in the best interest of students” as well as colleges.

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In a complaint filed last December, Justice Department officials  acknowledged that colleges “compete vigorously” for students on cost, quality, majors, campus amenities, reputation, and employment prospects, and that many NACAC rules actually “strengthen the market for college admissions.”

But according to their complaint, the challenged recruiting rules “reduced competition . . . for college applicants and potential transfer students” and therefore amounted to “unlawful restraints of trade.” This conclusion reflects the Department’s view of colleges as businesses engaged “in the sale of college services” and students as consumers who would be harmed by any limits on competition.

Here are three reasons prospective college students and their parents should care about this dispute:

1) Students should not be viewed as merely consumers or the admissions process as simply “the sale of services.” Admission decisions are a first and critical step in building a community. They should be based on which college is the best fit for an applicant. Applicants, we fear, might be unduly influenced by Early Decision offers of “benefits,” including, for example, first priority in housing, a personal parking space “just for you,” an early move-in date, and early access to a success coach. And, of course, special scholarships for those who apply early will generally mean less financial aid is available for everyone else.

2) Most colleges and universities view the May 1 deadline for admission offers (with an exception for students taken off a wait list) as a way to manage enrollment and impose a reasonable end date on a process that is already quite stressful for applicants and their families. The benefits that accrue to applicants who receive “enhanced” offers after May 1 will also likely come at the expense of other students, since most institutions will almost certainly hold back funds on earlier offers. Moreover, colleges and universities, almost of all of whom have stretched their financial aid budgets to the limit, may well raise their deposits to increase the cost of “defections” to other schools.

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3) Much the same is true of the transfer recruitment rule. In the past, NACAC urged colleges not to solicit transfers from a prior year’s prospect pool, unless the students themselves initiated the transfer. The goal was to avoid pitting institutions against one another unnecessarily and to allow undergraduates time to commit to their college community. We believe that getting rid of this practice does not serve the academic or interpersonal interests of the vast majority of students.

After going through a two-year Department of Justice investigation, NACAC concluded it simply did not have the resources to fight city hall, and its members voted, albeit reluctantly, to drop the challenged rules from the NACAC code. The consent decree they signed has led some admissions professionals and high school guidance counselors to fear a new “arms race” that will benefit some but not most students and produce unintended and unwelcome consequences for higher education in the United States.

We share that concern and hope that now or in the not-too-distant future the DOJ will reconsider its position. We are well aware of the benefits of competition to individuals and societies. But competition is not and never should be entirely free and unfettered. It does not always serve the collective good. And there are times when it makes good sense to let sleeping dogmas lie.

Glenn C. Altschuler is the Thomas and Dorothy Litwin Professor of American Studies at Cornell University. He is the co-author (with Isaac Kramnick) of Cornell: A History, 1940-2015.

David Wippman is the President of Hamilton College.