Quiet effort to promote more needs-based aid

In 1994, a settlement on an antitrust lawsuit set down new rules for colleges that were considering financial-aid packages for the same student. The message: schools could share general institutional information regarding aid, but no specific data on an individual. The ruling laid the groundwork for bidding wars that had been prevented by collaboration among members of what was known as the "Overlap Group."

That group is gone now. But a new, similarly secretive gathering of elite college presidents is meeting to discuss financial-aid policy. Called the "568 Group" after the subsection of federal law that permits the general communication, it was formed in 1998 after Princeton moved to give low-income students grants instead of loans, thus sparking further battles for students, individuals close to the group said.

The aim of the group is reportedly to develop a set of general principles that will encourage more needs-based, rather than merit-based, financial aid among institutions.

"This group of presidents got together two years ago," says one source close to the group's members, who requested anonymity. "Their purpose is to get to talk about common principles - the idea that financial aid should be needs-based, consistent, and fair. They are concerned that institutions have not been conferring enough, not paying enough attention to the public good.... This is a set of folks who say you should use it in a socially responsible way."

The group is said to have arrived at a set of principles. But Princeton's recent move toward an all-grant system of aid may set off a bidding war among elites that could damage or destroy the nascent principles the group had crafted, some say.

"I know some say we [the 568 group] are trying this, and Princeton is trying to blow us out of the water," says Morton Schapiro, president of Williams College, the only member of the group to admit its existence on the record. "I don't think that's true. But [Princeton's move] certainly isn't helping. It doesn't make it easier to come to some sort of broad agreement in principle."

Don Betterton, director of undergraduate financial aid at Princeton, denied the school's shift from loans to grants was motivated by anything but Princeton's internal needs.

"We were aware of what was going on [with the 568 group]," he says. "We don't know whether it advances their purposes or not. On loan elimination, they had said institutions should be free to package aid any way they want. And I don't think we're counter to that. We're aware of what they did, and we had a desire to cooperate. Maybe we got out ahead a bit."

He adds that Princeton is permitted by law to speak with the group, but that he had not attended any group meetings.

"We saw a report they produced," he says. "We took into account where they were going in a general way."

(c) Copyright 2001. The Christian Science Publishing Society