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ERIC Number: ED540079
Record Type: Non-Journal
Publication Date: 2008-Jun
Pages: 35
Abstractor: ERIC
Reference Count: N/A
Time to Reexamine Institutional Cooperation on Financial Aid
Reed, Matthew
Institute for College Access & Success
Many public and private colleges give out substantial amounts of financial aid in excess of students' demonstrated financial need to attract the most talented students in a competitive marketplace. These colleges see merit aid as an investment in institutional quality. Since top students are in high demand, colleges may have to bid against each other, raising the aid offered these students to levels well beyond their financial need. In the past, some colleges cooperated on financial aid policies to restrain these "bidding wars" and free up more funds for other priorities such as need-based aid. However, following the U.S. Department of Justice's antitrust investigation of private colleges between 1989 and 1991 and subsequent court rulings and settlements, the legal environment around this type of cooperation has been uncertain. As a result, many colleges are reluctant to even discuss the possibility of cooperating on financial aid matters for fear of further government investigations or lawsuits from students and their families. This paper reviews the history of this issue and analyzes the amount of grant aid that could potentially be redirected to needier students as a result of institutional cooperation. The authors also identify the legal issues related to facilitating such cooperation. An accompanying memo examines the legal issues in greater depth. Antitrust and Financial Aid in Higher Education is appended. (Contains 3 tables and 117 footnotes.) [This white paper was written with Robert Shireman. Contributions by Lauren Asher, Edie Irons, Deborah Frankle Cochrane, Srikanth Sivashankaran and Shannon Gallegos.]
Institute for College Access & Success. 405 14th Street 11th Floor, Oakland, CA 94612. Tel: 5110-559-9509; Fax: 510-845-4112; e-mail:; Web site:
Publication Type: Reports - Evaluative
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: Ford Foundation; William and Flora Hewlett Foundation; Pew Charitable Trusts
Authoring Institution: Institute for College Access & Success
Identifiers - Laws, Policies, & Programs: Improving Americas Schools Act 1994