Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 24, 1992 TAG: 9201240135
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Medium
ANTITRUST PROBE OF HOLLINS CLOSED
Hollins College has been dropped from the U.S. Justice Department's widespread investigation of colleges and universities for possible antitrust violations.In a curt two-sentence letter, Hollins was notified that the department had closed its investigation of the college and was "grateful" for its cooperation, Michael Urbanski, Hollins' legal counsel, said Thursday.
In 1989, the Justice Department launched an investigation to determine whether 23 colleges and universities were unfairly restraining trade in setting similar levels of financial aid and tuition.
Hollins was one of three Southwest Virginia private colleges that had been asked to turn over records in what the Justice Department calls a "civil investigative demand." The two other colleges - Sweet Briar College in Sweet Briar and Randolph-Macon Woman's College in Lynchburg - also have been removed from the investigation.
The Justice Department's unusually broad investigation has continued quietly over the last two years, following a flurry of news reports. Urbanski said Hollins heard virtually nothing after complying with the Justice Department's initial request.
"Two years ago, they asked for a bunch of documents, and two years later, they've closed the investigation," he said. "Why they singled out Hollins is something only the Justice Department knows."
Department officials declined to elaborate on the abrupt ending of the Hollins, Sweet Briar and Randolph-Macon investigations.
"In some areas, we have closed our investigation," spokeswoman Gina Talamona said. Talamona declined to say how many colleges and universities were notified.
"The investigation is continuing and the focus remains the same - antitrust violation," she said.
The department's investigation initially focused on 23 prestigious institutions, including the Massachusetts Institute of Technology, the University of Chicago, members of the Ivy League and the Pentagonal Sisters group, a cluster of small private schools in the Northeast.
Some higher-education officials were surprised that Hollins was included because it differed in location and student body from the other institutions involved. Some speculated that Hollins was included as a control group to compare its policies with those of the targeted institutions.
Hollins officials were vague in 1989 about what kinds of documents the college turned over to the department, saying only that some of it was financial information. Thursday, they offered nothing more.
But in a prepared statement, Hollins President Maggie O'Brien said she and other Hollins officials were pleased that the college was no longer part of the Justice Department's civil investigation.
"We do not know why Hollins received the request for information in 1989 since the college had been pursuing a publicly stated policy of keeping tuition and fees as low as possible," she said.
This year, tuition, fees and room and board at Hollins cost $16,200, an 8 percent increase over the last academic year. About 40 percent of Hollins students receive some form of financial aid.
The Justice Department's investigation has focused on a longstanding practice under which some schools agreed to offer students who apply to several schools the same amount of financial aid, diminishing competition for students.
Some of the colleges were asked to supply information about the practice of comparing assessments of applicants' ability to pay for their education.
For example, the Justice Department alleged that a group of the schools under investigation met each year and set restrictions on financial aid awarded to undergraduates. The schools compared family contributions for financial-aid applicants admitted to more than one of their schools and eliminated sizable differences to make the family contributions comparable, the Justice Department alleged.
Charges were never brought against Hollins, Sweet Briar or Randolph-Macon. But the investigation did result in charges of antitrust violations against nine universities. Last May, the Justice Department settled with eight of them - all Ivy League universities - who agreed not to conspire in determining financial aid for students.
The ninth school - MIT - refused to make such an agreement and opted for a trial.
Former Attorney General Richard Thornburgh, who branded the alleged collusion a "collegiate cartel," said then that similar investigations of other schools were continuing, but he would not name the institutions. The number of colleges and universities under investigation had grown from 23 to 55.
Educational institutions are exempt from some provisions of federal antitrust laws, but not from laws against price-fixing.