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Admissions Collusion?

May 14, 2014

Colleges may soon have a new reason -- an antitrust lawsuit -- to think twice about their relationship with the Common Application.

CollegeNET, which provides a variety of admissions-related services to college, some in direct competition with the Common Application, sued Common App last week in federal court, charging antitrust violations. And while the suit is only against Common App, it states that some of the 500 colleges that are members have been "co-conspirators" in some of the alleged violations.

When CollegeNET issued a news release last week about having sued Common Application, some admissions leaders were scratching their heads about how a service to process applications could violate antitrust law. The press release provided few details.

But the 103-page filing by CollegeNET details the argument -- and also shows why it and others in the admissions business care so deeply about the economic strength of the Common Application, which had more than $13 million in revenues in the 2012 fiscal year. The suit says that CollegeNET has lost 229 college customers to the Common Application in the last 10-15 years, and that the reason for these shifts is "anticompetitive and exclusionary conduct" by Common Application.

So is the suit sour grapes or a legitimate gripe?

The central allegations in the suit are that the Common Application uses pricing and membership rules that have the impact of squelching competition. Two policies receive considerable attention in the suit. One requires all members of the Common Application to promise not to offer any admissions option that costs less than what the college charges for a Common Application. The other offers a discount on the per-application fee paid by colleges to Common App for each application if the college exclusively uses the Common Application to process applications.

"Common Application has orchestrated a sea change in the student application process, turning a once vibrant, diverse and highly competitive market into a straitjacketed ward of uniformity," the suit says. The Common Application encouraged colleges that once viewed applications as a tool to market "unique attributes" to instead embrace conformity and abandon innovation, the suit says.

The Common Application declined to comment on the suit when it was first filed, and again on Tuesday. But officials do not dispute that its policies favor colleges that use the service exclusively.

For example, member colleges that pledge the most exclusivity to the Common Application (for example, promising to use only the Common App for transfer, not just freshman, applications) pay $3.75 for each application processed by the Common Application. But those that want to be Common App members but to also use their own applications, or those of another service, must pay $4.75 per application.

The suit charges that these types of pricing policies -- combined with the dominance of the Common App among elite private colleges -- make it impossible for competitors to offer lower-cost alternatives or more creative approaches. Colleges gain too much from joining the Common Application (in terms of additional applications) to give it up, the suit says.

And the issue of exclusive use of the Common Application has become more timely for practical, not just legal reasons. In the fall, the Common Application unveiled a new system and its crashes left many applicants unable to turn in applications, and many colleges left waiting for applications to review. In some of the postmortems on the fall's admissions traumas, college officials noted that the institutions that were most vulnerable were those who followed the guidance of the Common Application and blocked off other ways to apply. Those colleges that maintained their own services or had contracts with other providers were able to speedily send applicants somewhere other than the Common App.

Most admissions leaders (with a few exceptions from time to time) don't spend a lot of time focused on antitrust law. So Inside Higher Ed asked admissions experts about the underlying assumptions of the suit, and whether Common Application rules were leading colleges to make decisions that might not be the best policy for the institutions or their applicants.

The dispute is clearly sensitive to many admissions leaders, several of whom begged off talking. Several said that they agreed that some Common Application rules (such as those in the lawsuit) do not serve applicants or institutions, but that they did not want to be quoted by name. These officials, at colleges that are members of the Common Application, said that they view the organization as one that they don't want to disagree with in public.

Robert J. Massa, vice president for communications at Lafayette College (and before that someone who held senior admissions positions at several institutions), said that "there's no question" that the Common Application's rules lead to "pressure" on institutions to adopt the policies that the Common Application favors.

He said that admissions officials at many institutions question Common Application rules, "but they will comply."

"They may not like it, but they will comply. They are the 800-pound gorilla."

One admissions dean at a private college described how this plays out for his institution. He said that the college feels it needs the Common Application to attract some applicants. But for some groups of applicants, other strategies -- such as waiving application fees for anyone who visits campus, or offering a fast-response application without a fee -- are more effective. Since this college uses those strategies, it must also waive fees for those who apply using the Common Application. As a result, the college largely waives fees across the board. By complying with Common Application rules, the college is losing money it needs for students -- when plenty of those applying through the Common App could afford to pay a modest fee.

This admissions dean said that he "believes in the idea" of the Common Application, that applicants should have the chance to fill out one form and apply to many colleges. But he said that allowing him to vary admissions pricing would not challenge that principle, but would make it easier for colleges to offer application programs designed and priced for different groups of students.

He said that there is "some accuracy" to the lawsuit's claim that colleges are pressured to do things they wouldn't do otherwise. "I have brought this to the attention [of Common Application officials] previously," but nothing changed, he said. "It concerns me. It moves Common App into what I would say is proprietary recruitment tactics. They are saying we can't do these things."

Others, however, said that the incentives to go to the Common Application -- or do so exclusively -- aren't just pricing related. Michael Sexton is vice president for enrollment management at Santa Clara University, which was using the Common App exclusively when he arrived. But he led a shift, in a previous position at Lewis & Clark College, from nonexclusive to exclusive use of the Common App. The motivation for the shift was that technology officials thought that "it made no sense to run two systems. It was not a pressure kind of thing."

Sexton said that he doesn't see how the Common App's rules could be illegal. "People get incentivized to do all kinds of things by vendors. I'm not sure it translates into tangible damages to the public."

Others said that they switched to exclusivity because the Common App has such a large role in the admissions process that it seemed a logical move. California Lutheran University made such a move last year, meaning that its first year of using only the Common App coincided with the worst technical glitches in the system's history. Matthew G. Ward, vice president for enrollment management and marketing, said that the timing was less than ideal and "we had some painful moments," but he said he didn't have regrets or see any real chance to change.

While the university previously liked the option of having its own application in addition to the Common App, he said that it was becoming too complicated to hold on to both, given the dominance of the Common App. "If you attend any kind of application workshop at a high school, they are using the Common App to describe the process," he said, so students learn about applying that way, and consider it the norm. "The wave was too large for us to not go in that direction," he said.

And he added that "once you decide to go exclusive, it's hard to go back," as you abandon the old systems.

It doesn't bother him that the Common Application has requirements to be a member and to gain price advantages. "It's a membership," he said. "You need to abide by the rules."

 

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