Massachusetts Institute of Technology violated a federal ban on price fixing by sharing financial aid data with Ivy League colleges and using it to put together aid offers to students, a judge ruled Wednesday.
Chief U.S. District Judge Louis C. Bechtle's order bars MIT from "any combination or conspiracy" with any other college on grants to any student for tuition or other educational costs.The issue in the case was the Ivy Overlap Group, a cooperative effort between MIT and the Ivy League schools through which formulas were set up to make sure a student who applied to more than one school would be offered the same financial aid by each school.
The 35-year-old practice, intended to prevent schools from getting into bidding wars for students with their financial aid offiers, had affected about 3,000 students.
"By entering into the Ivy Overlap Agreements, the member institutions purposefully removed, by agreement, price considerations and price competition for an Overlap school education," Bechtle wrote.
The judge rejected MIT's arguments that its financial aid program is a charity, rather than a commercial enterprise. "The court can conceive of few aspects of higher education that are more commercial than the price charged to students," he said.
Charles A. James, acting assistant U.S. attorney general for the Justice Department's antitrust division, said from Washington that his office was pleased with the ruling.
"Just in skimming it, we see some very, very positive signs, vindicating our view of some of the more important issues of the case," he said.
There was no immediate comment from MIT, which planned a statement and news conference later in the day.
The case under the Sherman Antitrust Act was originally filed against MIT and Ivy League schools. But the other schools reached out-of-court settlements with the Justice Department.
All of the schools maintained the practice was not illegal, but only MIT decided to fight in court. The other schools were Harvard, Princeton, Pennsylvania, Yale, Brown, Columbia, Cornell and Dartmouth. Even though Penn settled, the case remained assigned to Philadelphia, chosen as the closest location to Washington, D.C.