Daniel Barkowitz | September 26, 2006
"Government Accountability Office (GAO) releases report on 568 Group"
As you are aware, if you have read this blog in any great detail, MIT is a member of the 568 Group which agrees on certain principles when awarding financial aid. As part of the initial authorizing legislation which allowed need-blind colleges to discuss their common practices for awarding aid, Congress required that the GAO complete a study to measure the program's effectiveness. That study is now complete. Below you will find the text of an article published at Inside Higher Ed which highlights the report and provides an overview of its results (My favorite line may be "...In contrast, the Massachusetts Institute of Technology was not included in the 568 group even though it is one of the most generous participants in aid awards." Hmm!).
The complete article can be found here and the GAO report can be viewed here.
Green Light for Antitrust Exemption?Colleges that won the right to consult with one another to collaborate on some financial aid policies received good news Friday from the U.S. Government Accountability Office: A report ordered by Congress found that the antitrust exemption granted to these colleges was not resulting in students or their families paying more for colleges.
A contrary finding would have made it much more difficult for these colleges to hold on to the exemption when it expires in two years. On the other hand, the GAO didn’t find as much good coming from the exemption as colleges believe is taking place.
The exemption is one legacy of a federal investigation that changed the way some elite colleges give out their aid dollars. Until the U.S. Justice Department stunned colleges by challenging the practice in an inquiry that became public in 1989, colleges that were members of the Overlap Group — generally among the most prestigious private colleges in the country — met each year to determine the financial need of students admitted to more than one member institution. Colleges said that the practice assured fairness, and allowed students to select colleges for educational, not financial, reasons. But the Justice Department and some other critics perceived illegal antitrust collusion and through negotiations and a lawsuit, the traditional Overlap Group activities ceased.
Colleges did win a reprieve from Congress on one key issue, however: The Overlap Group also worked to set common policies on how certain financial questions would be answered with regard to determining financial need. In a 1992 law, Congress said that colleges that admit students without regard to need could continue to meet to develop common policies on certain aid issues. When Congress renewed that law in 2001, it also asked the GAO to study its impact — and that resulted in the analysis released Friday.
The 28 colleges — some but not all alumni of the Overlap Group — that have used the exemption to work together on aid issues are known as “568″ institutions by the portion of the law where that exemption was created. The GAO report notes that their major activity has been the development of a “consensus approach” on certain aid questions. Among those questions are how to calculate home equity, how to consider geographic variations in cost of living, and whether to count family debt.
But while the GAO noted the work that went into developing the “consensus approach,” it also found that many colleges adopted the approach only in part.
To look for the impact of the antitrust exemption, the GAO then compared a series of measures (college costs, aid awards, etc.) to various groups of students at colleges using the antitrust exemption and to comparable colleges that weren’t. The bottom line was that GAO found no “appreciable difference” in what families would have to contribute at the two groups of institutions. The GAO also found no impact on affordability.
In a response on behalf of the 568 institutions, Morton Owen Schapiro questioned whether some of the methodological choices used by GAO might have underplayed the positive impact of the consensus approach. Schapiro is president of Williams College and chair of the 568 Presidents’ Group. He noted, for example, that Princeton was included in the control group even though it is the wealthiest institution of its kind on an endowment-per student basis. In contrast, the Massachusetts Institute of Technology was not included in the 568 group even though it is one of the most generous participants in aid awards.
Schapiro also objected to references in the GAO report that looked for evidence that the 568 group’s activities were having a direct impact on the enrollment of low-income students. Schapiro said that Congress didn’t request this emphasis. And although Schapiro said that the 568 members were deeply concerned with such issues, that wasn’t necessarily why they were involved with this particular effort. An effort to figure out the most equitable way to count home equity isn’t going to have a huge impact on those who don’t have home equity, but that doesn’t mean that those who do have home equity shouldn’t have confidence in the fairness of the aid eligibility system, he wrote.
In a memo Schapiro sent to fellow presidents, he said that despite the concerns he outlined about the GAO report, he was left “optimistic” that the exemption would be extended. “Its successes include an increase in average need-based grant funding, enhanced transparency, improved ability for families to plan for future educational expenses, greater public confidence in need-based aid, more engagement by presidents in aid-related discussions, and growth in the number of institutions offering need-blind admissions,” Schapiro wrote.
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The author has filed this entry in the "Financial Aid" section; check it out for further reading on this topic. |
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The investigative arm of Congress might have flawed methodology? No, surely not.
Sarcasm aside, though I am new to the MIT blog scene—and technically don't belong on the scene, as I'm a junior in high school—I found the post to be quite informative. I hadn't realized how tangled the legal web was when it came to universities and financial aid until recently... this only reinforces that notion, really.
Posted by: Matthew Corley on September 26, 2006 03:49 PM
All of this stuff I'm hearing about the financial aid, and what it is based on, leaves me a little bit worried. Realistically my mother has no money to give and my father no intention. This is so true that I am facing not having my senior year book because I cannot come up with the $35 (I have certian problems that have prevented me from getting a drivers licence and live two miles outside of the nearest town at the moment). The reason I would be worried is because my father has a reasonable job (even though I doubt he'd send me a penny to help) and my stepfather's family owns land, which we happen to live on at the moment. The money issues have already nearly caused me not to give up applying but to be unable because of an unrelated but simultanious problem with SAT fee waivers. I am already looking at spending my last $16 making certain I can take the two required subject tests so I can apply. Would I have this situation to look forward to for the next 4 years because technically someone who should be helping but won't has some money and/or land?
Posted by: Betsy (high school senior) on September 27, 2006 09:20 PM
I've obtained conditional offer a undergraduate scholarship that will pay for everything during my undergraduate studies from a corporation. So I'm not planning to apply for financial aid while applying to MIT. But if I fail to secure that scholarship later on, can I still apply for financial aid at MIT with demonstrated need? Thanks.
Posted by: Keira (high school senior) on October 4, 2006 08:36 AM
Mr. Barkowitz, firstly I'd like to say that, as a low-income family member, most are deterred from applying to more expensive institutes, reasons are of their own.
Im intending to become an architect and im very impressed with what MIT has to offer with that course of study. But because of a low-budget, I'm leaning more towards a cheap 2-year community college.
I've managed to secure a 4.0 GPA and succeed in accelerated courses, but the thought of a 4-year school of a rough tuition of 40 grand per year is very intimidating.
Yes, I do realize that that had barely anything to do with the blog. Hopefully it wasnt a complete waste of time.
Have a good day sir.
Posted by: Jessica Horton (High School Junior) on October 5, 2006 10:44 PM
I have a question that I urgently need answered:
I am a US Citizen living abroad, and my parents will file local tax returns, NOT US Federal tax returns for the year 2006. How do I respond to the questions on the CSS Preapplication Worksheet that ask for information regarding the IRS 1040 and other US tax forms? How will the IDOC coversheet be forwarded (postal mail or online?) and will I then need to forward my parents’ local tax return?
Posted by: Anonymous on October 15, 2006 10:50 AM
I have a question for Mr. Berkowitz. I am a stay-at-home Mom who happens to have a graduate degree. I have not worked for 19 years (since my first child was born.) Does the 568 group , or financial aid directors in general, put any kind of expectation that I should be working into the financial aid equation?
Posted by: Anne on October 21, 2006 03:21 PM
