Government set to renew law on financial aid

Federal rules limiting financial aid discussion between Yale and other top schools will temporarily be lifted next week. For a short time, representatives from a group of selective colleges will have the the most freedom to talk to each other about aid that they have had in the past 10 years.

But Yale administrators said they do not expect the University to do anything radical with that freedom.

A provision of 1994′s Improving America’s Schools Act that allows dozens of schools to talk on a limited basis will expire Sunday. And a U.S. Justice Department consent decree of 1991 — which limited the extent top schools could discuss aid with each other — expired Sept. 17. Without these two guidelines, Yale and other top schools will — technically — be able to run wild, talking about aid as much as they want.

Hypothetically, in the next two weeks Yale could discuss specific aid policy changes with other top schools. For the past seven years, schools have only been able to discuss their philosophies on aid.

But this freedom will likely not last for long.

The Senate will vote Monday on a bill that proposes to extend for the next seven years the 1994 provision, known as Section 568. Yale administrators expect the Senate to pass the bill and President George W. Bush to sign it within the next couple of weeks.

Yale administrators are glad the bill will likely pass soon, keeping rules in place to regulate discussion of aid between schools.

“An environment in which you don’t have guiding principles can resort in chaos,” Yale Dean of Undergraduate Admissions and Financial Aid Richard Shaw said last spring. “I think it’s a dangerous place to go.”

The Senate bill was delayed a few weeks by more pressing legislation on terrorist actions.

“This is not anywhere close to top of Congress’ priority right now,” said Richard Jacob, associate vice president for federal relations affairs in the office of the general counsel.

With the bill’s passage, Yale will continue to discuss aid with its peer colleges on a limited basis. This summer, the University signed a pact to standardize need assessment with 28 schools. The pact also reinforced the goal of preserving need-based aid. Administrators said Monday’s bill is crucial to this type of discussion.

Monday’s bill is expected to extend the anti-trust exemption for another seven years. There will likely be a congressional review of the exemption in five years, Jacob said.

Aid officials are hopeful that the five-year review will show that this summer’s pact is helping student aid assessment.

“I’m certain that that study will prove out that students and families will benefit significantly from this revised formula,” said Theodore L. Bracken, a consultant to the 568 Presidents’ Working Group which produced this summer’s 28-school aid pact.

Bracken said it is unfortunate that Congress will not make the exemption permanent, as the House had proposed doing last spring.

As the bill awaits passage, inter-school aid discussion will be at its most unregulated state since 1989 when the Justice Department launched an investigation of Yale and several other schools that collaboratively decided student aid packages.

The University said it will likely continue pushing for the legislation to pass — as it has been all summer — and move forward with limited aid discussion with other top schools.

“We believe it’s important to be involved with other institutions,” Shaw said last month. “We worry a little bit about things getting out of hand.”

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