Justice Department Sues, Settles With NACAC

Nothing will change from the admissions group's current policy, which it altered under pressure in September. But the college admissions world may see real changes ahead.

December 16, 2019
 
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The Justice Department sued the National Association for College Admission Counseling on Thursday for allegedly violating antitrust rules, but it simultaneously settled the suit with a proposed consent decree based on changes NACAC has already made to its rules.

The news was predicted by NACAC at its September annual meeting when members of its Assembly voted -- 211 to 3 -- to strip provisions from the Code of Ethics and Professional Practice (CEPP) that the Justice Department said violated antitrust laws. The provisions are:

  • "Colleges must not offer incentives exclusive to students applying or admitted under an early decision application plan. Examples of incentives include the promise of special housing, enhanced financial aid packages, and special scholarships for early decision admits. Colleges may, however, disclose how admission rates for early decision differ from those for other admission plans."
  • "College choices should be informed, well-considered, and free from coercion. Students require a reasonable amount of time to identify their college choices; complete applications for admission, financial aid, and scholarships; and decide which offer of admission to accept. Once students have committed themselves to a college, other colleges must respect that choice and cease recruiting them."
  • "Colleges will not knowingly recruit or offer enrollment incentives to students who are already enrolled, registered, have declared their intent, or submitted contractual deposits to other institutions. May 1 is the point at which commitments to enroll become final, and colleges must respect that. The recognized exceptions are when students are admitted from a wait list, students initiate inquiries themselves, or cooperation is sought by institutions that provide transfer programs."
  • "Colleges must not solicit transfer applications from a previous year’s applicant or prospect pool unless the students have themselves initiated a transfer inquiry or the college has verified prior to contacting the students that they are either enrolled at a college that allows transfer recruitment from other colleges or are not currently enrolled in a college."

NACAC officials said that they had no choice but to make the changes or face a potential lawsuit from the government.

The rules were intended to prevent recruiting strategies that many admissions officers believe will now become common.

To the Justice Department, the rules were a clear violation of the law.

“While trade associations and standards-setting organizations can and often do promote rules and standards that benefit the market as a whole, they cannot do so at the cost of competition,” said a statement from Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Today’s settlement is a victory for all college applicants and students across the United States who will benefit from vigorous competition among colleges for their enrollment.”

The complaint filed by the Justice Department outlined its concerns. "Many of these rules appear to strengthen the market for college admissions. The recruiting rules, however, were not reasonably necessary to achieve the otherwise market-enhancing rules contained in the CEPP, and furthermore had the effect of unlawfully restraining competition among NACAC’s college members, resulting in harm to college applicants and potential transfer students."

Further, "by establishing and enforcing the recruiting rules, NACAC substantially reduced competition among colleges for college applicants and potential transfer students and deprived these consumers of the benefits that result from colleges vigorously competing for students."

NACAC released a statement offering its views on the settlement: "DOJ decided to file suit … and NACAC determined that the most pragmatic solution to conclude the matter was to enter into a consent decree which mandates that it delete the provisions of the ethical code that were already removed in September. The proposed decree specifies that the parties entered into the agreement prior to any decision whether the provisions in question violated any law, and that NACAC's agreement to the consent decree does not constitute any admission of liability."

The NACAC statement added, "NACAC continues to believe that the now deleted provisions provided substantial aid and protection to students in their process of choosing and moving from high school to college. However, the association understands its obligations under the decree and intends to strictly implement and abide by its provisions. The association agrees to submit a compliance plan that includes ensuring that its board of directors and staff understand their obligations under the decree, as well as helping to ensure that its members understand their obligations under the antitrust laws."

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