Justice Department Opens Probe into College’s Early Decision Practices

The U.S. Department of Justice is investigating Middlebury and at least nine other elite colleges and universities for potentially violating antitrust laws in early decision (ED) admissions practices.

In an April 6 letter sent to these colleges, the DOJ said it had “opened an investigation into a potential agreement between colleges” involving the exchange of information about accepted ED applicants.

Inside Higher Ed first obtained and reported on the letter, which informed the recipient institutions that they must safeguard documents and correspondences pertaining to such an agreement, as well as documents indicating the sharing of applicants’ information between colleges.

Hannah Ross, Middlebury’s general counsel, confirmed that the college received the notice.

“Middlebury is one of the institutions contacted by the Department of Justice,” Ross said. “We will, of course, comply fully with all of the requests the department has made.”

The other identified schools under investigation include Amherst, Bates, Pomona and Williams. Other schools have also released statements confirming that they have received notices from the DOJ and are complying with the DOJ’s requests.

The DOJ’s letter did not specifically identify the nature of the actions in question, but appears to be referencing some colleges’ practice of sharing names of students who had been admitted in the early-decision round. The information sharing could be used to ensure that applicants are complying with ED policies and that colleges do not accept students who have made binding ED commitments to other institutions.

When asked if Middlebury is a member of this alleged network, Greg Buckles, dean of admissions, directed a Campus reporter to Ross, who declined to comment specifically on this matter.

While Middlebury has not confirmed whether it is part of such an arrangement, there is evidence that the arrangement exists. The Amherst admissions dean referenced the college’s participation in a group of around 30 colleges in a U.S. News & World Report article in 2016. According to the Amherst dean, the group would share names of students admitted to the college ED, as well as the names of students who had been admitted ED but were not attending the school.

Melissa Korn, a Wall Street Journal reporter, also spoke to an admissions dean from one of the institutions that received the letter. The dean said their school is part of a network of about 20 other schools that exchanges ED applicant information. Among the shared pieces of information are the applicant’s name, application-identification number and home state.

A school might share ED applicant information with other institutions because ED decisions are not actually legally binding. According to a description of Middlebury’s ED policies on the college’s website, “Early Decision candidates may not apply to other colleges for an Early Decision and must agree to enroll to Middlebury and withdraw applications to other colleges if admitted. Middlebury will withdraw an offer of admission if a student fails to comply with these stipulations.”

Early decision is becoming an increasingly popular option for college applicants, partly due to the higher acceptance rates during ED admission cycles than the regular decision (RD) admissions rounds. For example, the college’s ED acceptance rate was just over 50 percent for the class of 2022, while the RD rate was about 17.2 percent. Middlebury typically releases its ED I decisions in mid-December, its ED II decisions in mid-February and its RD decisions in late-March/early-April. The other schools implicated in the probe offer similar admissions options for applicants.

The investigation will be led by the DOJ’s Antitrust Division, which aims to protect consumers by promoting market competition. One way it does so is by preventing companies from making agreements that may limit competition between them. The DOJ may be concerned that the alleged agreement in question is restricting competition between colleges by preventing colleges from competing over students that have already been accepted elsewhere through ED.

Although there are not specific laws in place to deal with antitrust violations committed by educational institutions, most cases are examined as they pertain to the 1890 Sherman Antitrust Act, explained Adam Biegel, a Washington D.C.-based lawyer who co-chairs the antitrust practice group Alston & Bird LLP. 

“The Justice Department likely is considering whether to issue formal civil investigative demands, similar to subpoenas, requiring the schools to produce documents related to the subject matter of the investigation,” he said.  

Biegel noted that the DOJ is most likely trying to gauge where the exchanges of information between colleges “fall on the spectrum from legitimate to illegitimate.”

“On one end of that you could see collaboration ancillary to a procompetitive national ED program being necessary (i.e. to ensure there is no free riding/rule breaking on a program designed to spur early and robust competition for students),” he said. “Moving toward the other end, might colleges have exchanged information about ED applicants before decisions were made to give each other a heads up? Agreed on who to admit or what types of applicants should be accepted ED?  Passed on? How to punish violators by not admitting them?”

He added that “information exchanges have been fodder for conspiratorial conduct in other antitrust cases involving trade association pricing, wage setting” and other matters.

Some admissions officials have expressed confusion about the alleged illegality of the practices in question, as students applying ED to colleges via the Common Application sign a waiver acknowledging that the institutions that accept them may share their information.

“The schools say that the applicants know what they’re getting into when they’re signing up for early decision so there really isn’t any legality issue there,” said Korn, the Wall Street Journal reporter.

The DOJ’s current probe into colleges’ ED practices is not the first of its kind to involve Middlebury. In 1991, the DOJ investigated a group of elite colleges, collectively known as the Overlap Group, on their use of financial aid package standardization during admissions talks. Middlebury and the eight Ivy League institutions were among the group’s 23 member institutions, who met for 40 years to share information about and standardize the financial aid packages they were doling out to applicants. The DOJ mandated that these schools refrain from the practice, which violated antitrust policies because it restricted price competition among universities.

In January, the DOJ investigated the National Association for College Admissions Counseling (NACAC), of which Middlebury is a member, for potentially violating antitrust laws with its ethics code. NACAC released a statement last Monday saying they did not think the two investigations are related.