MIT Agrees to Settle Antitrust Suit, U.S. Says

WASHINGTON —  Two days after threatening further court action against Massachusetts Institute of Technology, the Justice Department announced Wednesday that the school has agreed to settle an antitrust lawsuit.

The suit, filed by the government, charged that the school and eight Ivy League institutions violated antitrust laws when they joined together to set salaries and establish common levels of financial aid for needy students.

Under the settlement, MIT agreed to act in accordance with a 1991 consent decree under which the Ivy League schools settled the antitrust allegations against them. The settlement prohibits the schools from meeting annually to fix tuition, faculty salaries or the payments needy students would be expected to make on their own to attend one of the nine schools.

Justice Department officials said, however, that the schools may exchange data on “general principles” governing such aid.

MIT had refused to join the eight other colleges in signing the consent decree two years ago. The other universities are Brown, Columbia, Cornell, Dartmouth, Harvard, Princeton, Pennsylvania and Yale.

The schools had argued that the purpose of their joint policies on aid and salaries was to prevent a “bidding war” in which the colleges would compete for students and faculty.

But the George Bush Administration sued them for violating antitrust law and the Clinton Administration inherited the case.

Last year, a federal judge ruled in favor of the government, declaring that federal laws against price-fixing were violated when colleges and universities shared information on the finances of their prospective students before giving out scholarship aid.

But negotiations with MIT continued after an appellate court sent the matter back to the district court for further analysis. It said that MIT should have a chance to argue that its financial aid policy advanced social goals that would offset any anti-competitive effect.

On Monday, the Justice Department said that negotiations toward a settlement had proved fruitless and that it would pursue the matter further in court.

But Robert Litan, deputy assistant attorney general for the antitrust division, said in announcing the settlement that MIT had agreed to abandon its practice of exchanging proposed tuition levels with the Ivy colleges and then using the Ivy figures to set its own tuition and faculty salaries.

He said that MIT still could agree with other colleges on “general principles for determining financial aid” and that it could “exchange limited data about applicants’ financial profiles.”

MIT President Charles M. Vest said that the agreement had two major advantages.

“First, the Justice Department will dismiss all claims against MIT,” he told a news conference on the Cambridge campus. “Second, the settlement establishes guidelines under which colleges and universities can coordinate their financial aid practices to ensure that their limited financial aid funds are awarded to qualified students solely on the basis of need.”