[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
THE ELITE UNIVERSITIES CARTEL:
A HISTORY OF ANTICOMPETITIVE COLLUSION
INFLATING THE COST OF HIGHER EDUCATION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,
REGULATORY REFORM, AND ANTITRUST
COMMITTEE ON THE JUDICIARY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
WEDNESDAY, JUNE 4, 2025
__________
Serial No. 119-23
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-624 WASHINGTON : 2025
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COMMITTEE ON THE JUDICIARY
JIM JORDAN, Ohio, Chair
DARRELL ISSA, California JAMIE RASKIN, Maryland, Ranking
ANDY BIGGS, Arizona Member
TOM McCLINTOCK, California JERROLD NADLER, New York
THOMAS P. TIFFANY, Wisconsin ZOE LOFGREN, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
CHIP ROY, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT FITZGERALD, Wisconsin Georgia
BEN CLINE, Virginia ERIC SWALWELL, California
LANCE GOODEN, Texas TED LIEU, California
JEFFERSON VAN DREW, New Jersey PRAMILA JAYAPAL, Washington
TROY E. NEHLS, Texas J. LUIS CORREA, California
BARRY MOORE, Alabama MARY GAY SCANLON, Pennsylvania
KEVIN KILEY, California JOE NEGUSE, Colorado
HARRIET M. HAGEMAN, Wyoming LUCY McBATH, Georgia
LAUREL M. LEE, Florida DEBORAH K. ROSS, North Carolina
WESLEY HUNT, Texas BECCA BALINT, Vermont
RUSSELL FRY, South Carolina JESUS G. ``CHUY'' GARCIA, Illinois
GLENN GROTHMAN, Wisconsin SYDNEY KAMLAGER-DOVE, California
BRAD KNOTT, North Carolina JARED MOSKOWITZ, Florida
MARK HARRIS, North Carolina DANIEL S. GOLDMAN, New York
ROBERT F. ONDER, Jr., Missouri JASMINE CROCKETT, Texas
DEREK SCHMIDT, Kansas
BRANDON GILL, Texas
MICHAEL BAUMGARTNER, Washington
------
SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,
REGULATORY REFORM, AND ANTITRUST
SCOTT FITZGERALD, Wisconsin, Chair
DARRELL ISSA, California JERROLD NADLER, New York, Ranking
BEN CLINE, Virginia Member
LANCE GOODEN, Texas J. LUIS CORREA, California
HARRIET HAGEMAN, Wyoming BECCA BALINT, Vermont
MARK HARRIS, North Carolina JESUS G. ``CHUY'' GARCIA, Illinois
DEREK SCHMIDT, Kansas ZOE LOFGREN, California
MICHAEL BAUMGARTNER, Washington HENRY C. ``HANK'' JOHNSON, Jr.,
Georgia
CHRISTOPHER HIXON, Majority Staff Director
JULIE TAGEN, Minority Staff Director
C O N T E N T S
----------
Wednesday, June 4, 2025
OPENING STATEMENTS
Page
The Honorable Scott Fitzgerald, Chair of the Subcommittee on the
Administrative State, Regulatory Reform, and Antitrust from the
State of Wisconsin............................................. 1
The Honorable Jerrold Nadler, Ranking Member of the Subcommittee
on the Administrative State, Regulatory Reform, and Antitrust
from the State of New York..................................... 3
The Honorable Jim Jordan, Chair of the Committee on the Judiciary
from the State of Ohio......................................... 5
The Honorable Jamie Raskin, Ranking Member of the Committee on
the Judiciary from the State of Maryland....................... 5
WITNESSES
Dr. Preston Cooper, Senior Fellow, American Enterprise Institute
Oral Testimony................................................. 9
Prepared Testimony............................................. 11
Scott Martin, Partner, Hausfeld LLP
Oral Testimony................................................. 22
Prepared Testimony............................................. 24
Alex Shieh, Opinion Writer, The Boston Globe; Publisher, The
Brown Spectator; Creator, Trialhouse.com, Brown University
Oral Testimony................................................. 27
Prepared Testimony............................................. 29
Julie Margetta Morgan, President, The Century Foundation
Oral Testimony................................................. 35
Prepared Testimony............................................. 37
LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
All materials submitted for the record by the Subcommittee on the
Administrative State, Regulatory Reform, and Antitrust are
listed below................................................... 67
Materials submitted by the Honorable Jerrold Nadler, Ranking
Member of the Subcommittee on the Administrative State,
Regulatory Reform, and Antitrust from the State of New York,
for the record
An article entitled, ``China Really Wants to Attract Talented
Scientists. Trump Just Helped,'' Jun. 4, 2025, The New
York Times
An article entitled, ``The House Reconciliation Bill Makes
College Less Affordable--All to Pay for Tax Cuts for
Millionaires and Billionaires,'' Apr. 29, 2025, New
America
An article from entitled, ``The number of 18-year-olds is
about to drop sharply, packing a wallop for colleges--and
the economy,'' Jan. 8, 2025, The Hechinger Report
An article entitled, ``Declining Enrollment is Leading to
School Closures. How Can Districts Limit the Harm to
Their Most Vulnerable Students?'' Oct. 5, 2023,
Bellwether
An article entitled, ``Ivy League School's Financial Aid,''
The Ivy Coach Daily
An article entitled, ``Who's at Fault for Student-Loan
Defaults?'' May 13, 2019, Chicago Booth Review
An article entitled, ``Harvard Has Trained So Many Chinese
Communist Officials, They Call It Their `Party School,' '' Jun.
1, 2025, The Wall Street Journal, submitted by the Honorable
Michael Baumgartner, Member of the Subcommittee on the
Administrative State, Regulatory Reform, and Antitrust from the
State of Washington, for the record
Materials submitted by the Honorable Jamie Raskin, Ranking Member
of the Committee on the Judiciary from the State of Maryland,
for the record
A press release entitled, ``Trump University is an Absolute
Scam. Get the Facts About Pending Litigation,'' Mar. 4,
2016, Rubio Campaign
An article entitled, ``Congressional Republicans' Proposed
Budget Reconciliation Bill Imperils 4.4 Million Pell
Grant Recipients,'' May 13, 2025, Center for American
Progress
Materials submitted by the Honorable Becca Balint, of the
Subcommittee on the Administrative State, Regulatory Reform,
and Antitrust from the State of Vermont, for the record
An article entitled, ``Judge finalizes $25 million settlement
for `victims of Donald Trump's fraudulent university,' ''
Apr. 9, 2018, ABC News
An article entitled, ``Trump University settlement finalized
by judge at $25 million,'' Apr. 10, 2018, USA Today
Materials submitted by the Honorable Scott Fitzgerald, Chair of
the Subcommittee on the Administrative State, Regulatory
Reform, and Antitrust from the State of Wisconsin, for the
record
An Press Blog entitled, ``Ivy League Tuition and Fees for
2024-2025,'' Ivy Coach Daily
An Press Blog entitled, ``Ivy Coach: The Curator of Ivy
League Admissions Statistics Since the Beginning of Time.
Ok, maybe not since dinosaurs.'' Ivy Coach
A article entitled, ``Students overpaid elite colleges $685
million, `price-xing' suit says,'' Washington Post, Dec.
17, 2024
A press release entitled, ``Plaintiffs in Elite University
Price-Fixing Case Settle with Caltech and John Hopkins,''
Berger Montague, Jan. 27, 2025
The Plaintiffs' Memorandum, Andrew Corzo, Sia Henry,
Alexander Leo-Guerra, Michael Maerlender, Brandon
Piyevsky, Benjamin Shumate, Brittany Tatiana Weaver, and
Cameron Williams v. Brown University, California
Institute of Technology, University of Chicago, the
Trustees of Columbia University in the City of New York,
Cornell University, Trustees of Dartmouth College, Duke
University, Emory University, Georgetown University, the
Johns Hopkins University, Massachusetts Institute of
Technology, Northwestern University, University of Notre
Dame Du Lac, the Trustees of the University of
Pennsylvania, William Marsh Rice University, Vanderbilt
University, and Yale University, Case No.: 1:22-cv-00125,
Dec. 29, 2024
A press release entitled, ``Consent Decree Settles Charge of
Conspiracy to Restrain Price Competition on Financial Aid
Against Major Universities,'' May 22, 1991, The
Department of Justice
An article entitled, ``How to Crush the Ivy League Cartel,''
Dec. 14, 2023, BIG Newsletter
The Exhibit 18, Henry v. Brown University, Case: 1:22-cv-
00125, Document 753-18, Dec. 16, 2024
Materials submitted by the Honorable J. Luis Correa, Member of
the Subcommittee on the Administrative State, Regulatory
Reform, and Antitrust from the State of California, for the
record
An article entitled, ``Trump is crushing America's AI
leadership. We still have time to fix it.'' Apr. 23,
2025, Orange County Register
An article entitled, ``JD Vance Wanted to `Aggressively
Attack' American Universities. His Wish Has Been Trump's
Command,'' Jun. 3, 2025, The New York Times
A chart entitled, ``Costs of Federally Sponsored Research,''
Dec. 11, 2024, Association of American Universities
An graphic entitled, ``Driving the Innovation Economy:
Academic Technology Transfer in Numbers,'' AUTM
A graphic entitled, ``Benefiting Society and the Economy:
Academic Technology Transfer for 2023,'' AUTM
An article entitled, ``Federal R&D Cuts Would Be Another
(Massive) Unforced Policy Error,'' Apr. 18, 2025,
American Enterprise Institute
An article entitled, ``America's R&D Rethink Threatens Its
Innovation Supremacy,'' Apr. 1, 2025, American Enterprise
An article entitled, ``New American Fortune 500 in 2024,''
Sept. 9, 2024, American Immigration Council
An article entitled, ``U.S. Scientists Warn That Trump's Cuts
Will Set Off a Brain Drain,'' Jun. 3, 2025, The New York
Times
An article entitled, ``These Are the U.S. Universities Most
Dependent on International Students,'' May 23, 2025, The
New York Times
An article entitled, ``Losing International Students Could
Devastate Many Colleges,'' Apr. 19, 2025, The New York
Times
APPENDIX
A report entitled, ``Economic Contributions of University/
Nonprofit Inventions in the United States: 1996-2020,'' Jun.
14, 2022, AUTM, submitted by the Honorable J. Luis Correa,
Member of the Subcommittee on the Administrative State,
Regulatory Reform, and Antitrust from the State of California,
for the record
THE ELITE UNIVERSITIES CARTEL:
A HISTORY OF ANTICOMPETITIVE
COLLUSION INFLATING THE COST OF HIGHER EDUCATION
----------
Wednesday, June 4, 2025
House of Representatives
Subcommittee on the Administrative State,
Regulatory Reform, and Antitrust
Committee on the Judiciary
Washington, DC
The Committee met, pursuant to notice, at 10 a.m., in Room
2141, Rayburn House Office Building, the Hon. Scott Fitzgerald
[Chair of the Subcommittee] presiding.
Members present: Representatives Fitzgerald, Jordan, Issa,
Cline, Gooden, Hageman, Harris, Baumgartner, Nadler, Raskin,
Correa, Balint, Garcia, and Johnson.
Also present: Representative Nehls.
Mr. Fitzgerald. Without objection, the Chair is authorized
to declare a recess at any time.
I want to welcome everyone to today's hearing on collusion
in higher education.
Without objection, I ask unanimous consent for Mr. Nehls to
be permitted to participate in this hearing, question the
witnesses if a Member yields him time for that purpose, of
which I will yield to him five minutes.
I will now recognize myself for an opening statement.
According to the National Center for Education Statistics,
U.S. colleges and universities are $700 billion, a $700 billion
industry. The Harvard endowment alone, which stood North of 50
million as of 2023, is larger than the GDP of 120 Nations. Six
of the eight Ivy League schools have endowments exceeding $10
billion.
Ivy League schools should be competing to offer the best
products at the best possible price. Instead, they collude to
raise prices and spend their inflated cartel earnings on
administrative bloat.
According to the Bureau of Labor Statistics, while products
like cars, clothing, and TVs have become more affordable as
businesses reduce costs to attract buyers, the cost of college
tuition and textbooks has risen by more than 180 percent and,
respectively, continues to go higher. Today, the cost to attend
an Ivy League school can exceed $100,000 per school year.
Ever since the Ivy League was established in the 1950s,
these schools have been focused on exclusivity, maximizing
profits, and artificially inflated prestige rather than
expanding access to education and serving students.
In 1950, Harvard charged $600 a year for tuition. Today
that number is nearly $60,000. Not only has tuition
skyrocketed, but these schools are also deliberately keeping
class sizes small to maintain exclusivity and inflate their
perceived prestige. Between 1978-2023, while the U.S.
population grew by just 50 percent, and the number of
applicants increased by 450 percent, Harvard reduced its class
sizes by 258 seats.
Across all Ivy League schools demand has steadily
increased, yet admissions remain flat. As you can see from the
graph displayed, although each Ivy League school on average
receives more than 50,000 applications, it accepts less than
2,000 students per year.
These price increases and shrinking class sizes are not
coincidental. Ivy League schools have a history of coordinating
pricing practices to avoid competing on costs. In 1958, MIT and
the eight Ivy League schools formed what is widely known as the
``Ivy Overlap Group,'' a cartel to fix prices. These schools
agreed to use a shared formula for calculating financial aid,
ensuring students admitted to multiple schools would pay the
same price no matter where they went.
In 1989, the Department of Justice began investigating
these practices and, ultimately, filed an antitrust lawsuit. By
1993, all nine schools had settled.
In response, Congress adopted Section 568 of the Improving
America's Schools Act of 1994, granting colleges an antitrust
exemption provided they did not consider a student's ability to
pay while making admissions decisions.
In 1999, elite schools formed a new cartel, the 568
Presidents' Working Group. The goal was the same: To create a
shared financial aid formula and not compete for students based
on price.
Even with a legal exemption, these elite schools still
chose profit and prestige over access and fairness. In 2022,
former students sued many of the Ivy League schools for
colluding with financial aid formulas that favored wealthy
applicants.
In one internal document uncovered through discovery a
college administrator complained about not being able to find
enough qualified students with well-off parents to pay the high
sticker prices. She said, ``Sure hope the wealthy next year
raise a few more smart kids.''
Ivy League schools can maximize the price paid by each
student using detailed financial data collected through the
College Scholarship Services Profile, or the CSS Profile. It is
a comprehensive financial aid form that most colleges do not
require.
The CSS Profile gives these schools access to sensitive
information, including family home ownership, savings,
retirement accounts, and more. With that information, they can
determine how much a prospective student's family can
apparently afford to pay and then charge them that amount.
Despite valuing their degrees at nearly $400,000, having
multibillion dollar endowments, and receiving billions more in
taxpayer funding, these schools don't prioritize accessibility
or quality of education, they prioritize profit and prestige.
Even though the Ivy League schools no longer have an
antitrust exemption to coordinate on pricing, tuition continues
to skyrocket. By setting the industry standard for tuition, the
Ivy League creates an umbrella effect that allows other
colleges to charge more than they could in a competitive
market.
Today we are starting an overdue conversation about how the
Ivy League's anticompetitive practices may harm students,
taxpayers, and, ultimately, our country's future.
I want to thank the witnesses again for appearing before us
today. I look forward to your input.
I will now recognize the Ranking Member Mr. Nadler for his
opening statement.
Mr. Nadler. Mr. Chair, before I start my opening statement
let me mention a personal stake in this.
I am the first member of my family to go to college. We
didn't have much money. My father worked at a gas station. I
was offered full scholarships by two Ivy League colleges: Yale
and Columbia. I chose Columbia. I never had to pay a cent.
Mr. Chair, this hearing, like so much else that we have
done in this Committee under Republican control, takes a
serious issue and uses it as little more than an excuse to
launch a decidedly unserious so-called investigation.
Let's be clear, the cost of tuition at many colleges and
universities, not just Ivy League institutions, is too high and
is unaf-
fordable for too many families. The same Republicans who today
claim to be concerned about the ability of students and their
families to afford college tuition proudly cast their votes two
weeks ago for a Budget Reconciliation Bill that would take
direct aim at student loan programs and other vital student
aid.
If they really cared about consumer prices, they would not
undermine the ability of all students, especially low-income
students, to access and afford higher education.
They would not make cuts to Pell Grants that would reduce
or eliminate access for up to four million students. They would
not cut student loan subsidies, raising costs for an average
borrower by up to $200 a month. They would not make student
loan repayments even more difficult and push more students into
the predatory private loan market. They would not include
devastating cuts to Medicaid which would deprive roughly 3.4
million low-income students of much-needed healthcare.
Republicans showed us very clearly that their priority is
tax cuts for billionaires, not affordable higher education. So,
it's a little difficult to take their concerns seriously today.
This hearing also comes in the context of the Trump
Administration's all-out assault on education and research at
colleges and universities across the country, and particularly
at Ivy League and other elite universities. The administration
slashed billions of dollars in research grants to universities
which will set back technological innovation and medical
advances by decades, not to mention harming our economic
growth.
At the same time, they are revoking student visas and
sending an unmistakable message to prospective students around
the globe that they are not welcome. The result is that the
brightest minds in the world, who once flocked to this country,
will now move to bring their brains and talents elsewhere.
This attack on higher education has an even more sinister
purpose. Its real target is academic freedom. Taking a page
from the authoritarian playbook, the Trump Administration is
using every tool at its disposal in a pressure campaign to
impose its ideologies on independent academic institutions, and
to bend them into submission.
Unfortunately, they have a willing partner in the
Republicans on the Judiciary Committee. Instead of using their
power as legislators to make education cheaper, more
accessible, and easier to pay off for all Americans,
Republicans are using the power of this Committee to aid and
abet President Trump's ideological war against the very narrow
slice of higher ed institutions.
How absurdly narrow is their focus? They are targeting
eight schools out of about 4,000 in the United States. That
amounts to a focus on less than one-half of one percent of the
American undergraduate population.
While President Trump threatens individual schools with
cuts for not adhering to his ideology, they are using the power
and resources of this Committee to pursue yet another empty
antitrust theory so that they can bully their political
targets. Sadly, this follows a familiar pattern.
Last Congress, this Subcommittee unleashed baseless
antitrust investigations designed to undermine the free speech
rights of advertisers and investors that held views disfavored
by the Majority. When advertisers made the reasonable
determination that they did not want their brands associated
with extremist views and hate speech on social media platforms,
Republicans used a flawed antitrust theory to justify a
campaign to threaten and intimidate them into abandoning their
efforts as responsible advertisers.
When investors threatened the profits of big oil and gas
companies by considering the risks that climate change posed to
our economic future, the Committee rushed to the defense of
their corporate allies with another hollow antitrust
investigation.
Now, today, they return to the same tired playbook, using
the power of this Committee to support the Trump
Administration's efforts to target academic institutions. After
having launched an overbroad fishing expedition against Ivy
League universities, they are now holding a hearing today to
justify these efforts at harassment and intimidation.
As I noted at the outset, there are real concerns when it
comes to the cost of tuition at colleges and universities. If
there is indeed collusion among the Ivy League schools,
enforcement by our antitrust agencies, the Federal Trade
Commission and the Department of Justice, is the answer, not a
partisan probe that merely serves as another broadside against
education in America under President Trump.
There is much we could do together to bring down the cost
of tuition and broaden access to education. Unfortunately,
Republicans would rather slash student loans to pay for tax
cuts for billionaires, while threatening universities that do
not bend to Donald Trump's will.
Unfortunately, there is one clear loser in the Republican
war on science and education, it is the students they claim to
support and, I should add, the public that benefits from
scientific and medical discoveries that will not now happen in
the United States.
I appreciate our witnesses for appearing today. I look
forward to hearing from them.
I yield back the balance of my time.
Mr. Fitzgerald. The gentleman yields back.
I now recognize the Chair of the Full Committee Mr. Jordan
for his opening statement.
Chair Jordan. Thank you, Mr. Chair.
First, they set the same general price. Second, they demand
large amounts of information from the students and their
families for each student. Then, they squeeze every dime they
can out of that family for tuition. Third, they limit class
size.
So, they agree on price, they perfect-price discriminate,
and they limit output. That is about as anticompetitive
behavior as you can get.
Then, with this windfall of money they get, perfect-price
discrimination, collusion on the price, limiting the class
sizes at the institution, there is a windfall of money they get
from students and their families, and the Government, the
taxpayers, they hire an unbelievable amount of administrators.
Mr. Shay has pointed that out. Such a deal. Such a deal for
taxpayers and families.
That is what is going on. Thank goodness the Chair is
having a hearing on this. It is ridiculous, and everyone knows
it.
Not to mention all the crazy things we saw and witnessed at
these institutions over the last few years: All kinds of crazy
protests, taking over buildings, and antisemitic behavior. Not
to mention all that, that is what is going on. The Ranking
Member of the Subcommittee says we are wasting our time? You
have got to be kidding me. The taxpayers appreciate that their
tax money actually is used in the right way, not like it is
being used at these institutions.
So, again I want to thank the Chair for this hearing. I
look forward to our witnesses and thank them for being present
today and testifying.
With that, I yield back.
Mr. Fitzgerald. The gentleman yields back.
I now recognize the Ranking Member of the Full Committee,
Mr. Raskin, for his opening statement.
Mr. Raskin. Thank you very much, Mr. Chair. Thanks to our
witnesses for joining us today.
Republicans convened us in the middle of the night a couple
weeks ago to pass their billionaire tax break bill, which even
Elon Musk, their great hero, now calls ``a disgusting
abomination,'' another class war tax scam that will not only
throw 14 million Americans off of their Medicaid, but increase
the national debt by $3 trillion.
In case our friends missed it, Elon Musk, who you have been
praising since this administration began, has a message for you
today: Shame on you. ``Shame on those who voted for it: You
know you did wrong,'' says Elon Musk.
So, I was pleasantly surprised to see we were going to have
a hearing on antitrust because there used to be Republicans
like progressive trust-buster Teddy Roosevelt who actually
believed in protecting the American people against price fixing
conspiracies, monopolies, and run-away corporate power.
I thought perhaps, Mr. Chair, we could get together to
protect our personal data, to investigate alleged
monopolization of live events tickets, and lower prices on
everything from eggs and other groceries to credit card junk
fees which have been soaring under the Trump Administration,
despite his promise that he would lower the price of eggs and
everything else on day one.
Silly me. Like everything else, antitrust in the hands of
our friends is just one more chance to attack America's
colleges and universities that refuse to surrender control to
that luminary academic scholar Donald Trump who wants the
Federal Government to take over faculty hiring, student
admissions, and academic affairs at every university in
America.
I don't even know why Donald Trump is so mad at Harvard.
They let in his son-in-law Jared Kushner after the Kushner
family donated $500,000 to get him in. Just like Trump pardoned
Kushner's father Charles, a major Trump donor who is our new
Ambassador to France, for his multiple convictions for tax
evasion and witness tampering.
Now, that would be a worthwhile hearing, Mr. Chair: How
wealthy people like the Kushners and the Trumps buy their way
into America's elite institutions, as Donald Trump calls them.
Antitrust is now just a weapon of political attack, not
economic analysis. When businesses advocate sustainable
investing, House Republicans accuse them of violating
antitrust.
When consumers want to exercise the right to boycott,
Republicans accuse them of violating antitrust.
Gee, if you don't support their monstrous, ugly tax break
bill for billionaires they will accuse you of violating
antitrust. We will probably be having a hearing on how Elon
Musk is now violating antitrust since he has turned against
Donald Trump and their appalling bill.
So, today they are accusing eight universities who
represent less than half percent of undergraduate students in
the entire market across America of engaging in some completely
vague and massive antitrust conspiracy. Republicans actually
trotted out this pathetically weak theory in the first Trump
Administration. Of course, no antitrust scholars took it
seriously. Even their own Department of Justice didn't do
anything with it.
They control the Antitrust Division again. Why do they need
another hearing from this Committee? Why don't they just bring
their case, if there is a case? They have got the power. That
is what they have been talking about.
Look, this is pure power politics. President Trump's
attacks on higher education reflect a standard move by
authoritarians like Vladimir Putin in Russia, and Viktor Orban
in Hungary. This is right out of the dictator's playbook:
Subdue and control any institution that could provide a check
on your lying and your corruption; prevent any possibility of
opposition and dissent from forming against the autocrat and
his regime; clear a path for the agents of propaganda and
disinformation; and destroy the institutions that have given us
great advances in scientific discovery and intellectual
inquiry, as Mr. Nadler points out.
J.D. Vance gave the whole game away, by the way, when he
repeatedly quoted Richard Nixon to say, ``the professors are
the enemy.'' Nixon said, ``The professors are the enemy. Write
that on the blackboard 100 times and never forget it.''
The Department of Education Secretary Linda McMahon
ominously warned if schools want to continue to do research,
they must fall in line with the administration and its goals.
They must be ``in sync . . . with the administration and what
the administration is trying to accomplish.''
That is a Federal Government takeover of every private and
public university and college in America.
Now, Harvard has stood up to the administration's attempted
hostile takeover, rejecting its blatantly unconstitutional
demands to control its governance, its curriculum, and the
ideology of its faculty and students.
In response, the administration has come after the
university's research contracts and grants and, more recently,
even its ability to enroll foreign students, only to be shut
down by the courts, and not Left-wing rogue Democrat judges,
but Republican judges, too, for violating the university's
First Amendment rights.
We have got academic freedom in America under the First
Amendment. Now, the Trump Administration ridiculously threatens
to come after the university's tax-exempt status. They want to
revoke Harvard's tax-exempt status, and they have asked all
Federal agencies to cancel all the contracts they have with
Harvard to get the work of the American people done, contracted
work.
Trump is losing in court every day. Harvard is winning as
it stands up for academic freedom and its right to make
scientific and academic progress. Hundreds of colleges and
universities across the country are standing with Harvard.
DHS said, Kristi Noem has said that the actions against
Harvard should serve as a warning to all universities and all
academic institutions. After Trump canceled more than 1.5
billion in research grants, we know that State universities and
community colleges have been hit hard. At smaller schools'
researchers are going to lose their jobs, labs will close, and
important work will go undone.
Our Republican colleagues have no interest in making higher
ed more acceptable and more affordable. In their big, beautiful
bill they are cutting programs that help students pay for
college, all to fund their tax cuts for the wealthiest
Americans.
Those cuts to higher education in America include severe
limits on Pell eligibility, the end to subsidized loans, and a
host of other disruptive changes that will push colleges way
out of reach for hundreds of thousands of Americans.
The administration also proposed nearly an 80 percent
reduction in Federal work-study funding, and eliminating
support for child care for students who are parents.
What world are these people living in? This is breathtaking
duplicity to claim that the Ivy League schools are conspiring
against their students to make unaffordable when House
Republicans are complicit in the largest setback in access to
higher education for working class Americans in decades.
Not content to undermine American students through these
direct cuts to education, they are also proposing cutting $880
billion from Medicaid and $300 billion from SNAP, the Nation's
primary antihunger program.
Do you know what happens to millions of low-income students
who don't have healthcare and don't have enough food to eat?
Most of them are going to drop out of school.
Today's hearing just regurgitates the MAGA agenda:
Persecute and punish anyone who refuses to submit to Donald
Trump's Right-wing ideological agenda or gets in the way of
their plan to fund tax cuts for the wealthiest Americans on the
backs of everybody else. It is a cruel, dangerous program, and
it has got nothing to do with antitrust law.
I yield back.
Mr. Fitzgerald. The gentleman yields back. Without
objection, all other opening statements will be included in the
record.
Mr. Fitzgerald. I will now introduce the witnesses.
Dr. Preston Cooper. Dr. Cooper is a Senior Fellow at the
American Enterprise Institute where his work focuses on higher
education, student loans, and higher education reform.
He previously served as a Senior Fellow in Higher Education
Policy at the Foundation for Research on Equal Opportunity, a
Research Analyst at AEI, and as a Policy Analyst at The
Manhattan Institute for Policy Research.
Next, Mr. Alex Shieh. Mr. Shieh is a rising junior at Brown
University where he studies computer science and economics. He
is also a journalist, serving as a contributing opinion writer
for The Boston Globe, and as the publisher of The Brown
Spectator.
Mr. Scott Martin. Mr. Martin is Partner and Co-Chair of the
Antitrust Practice Group at Hausfeld LLP. He has spent more
than 25 years in civil litigation. His practice specializes in
pricing distribution and other competition issues.
Ms. Julie Margetta Morgan. Ms. Morgan is the President of
The Century Foundation, a progressive think tank. She
previously served as the Associate Director of Research,
Monitoring, and Regulations at the Consumer Financial
Protection Bureau.
We welcome our witnesses and thank them for appearing
today. We will begin by swearing you in.
Would you please rise and raise your right hand.
Do you swear or affirm under penalty of perjury that the
testimony you are about to give is true and correct to the best
of your knowledge, information, and belief, so help you God?
[Affirmative replies.]
Mr. Fitzgerald. Let the record reflect that the witnesses
have answered in the affirmative.
Thank you. You can be seated.
Please know that your written testimony will be entered
into the record in its entirety. Accordingly, we ask that you
summarize your testimony in five minutes.
Dr. Cooper, you may begin.
STATEMENT OF MR. PRESTON COOPER
Mr. Cooper. Good morning, Chair Fitzgerald, Chair Jordan,
Ranking Member Raskin, Ranking Member Nadler, and distinguished
Members of the Subcommittee. Thank you for the opportunity to
testify today on the enrollments and pricing practices of Ivy
League universities. My name is Preston Cooper, and I am a
Senior Fellow focusing on the economics of higher education at
the American Enterprise Institute.
The eight institutions of the Ivy League show many
hallmarks of anticompetitive behavior. Most Ivy League
institutions severely limit undergraduate admissions, turning
away thousands of qualified applicants. The schools charge
among the highest tuition prices in the country and are less
likely to provide financial aid than other private
institutions.
At the same time, Ivy League universities enjoy a
significant surplus that funds high levels of institutional
expenditures, administrative bloat, and seven-figure salaries
for some college presidents.
Some Ivy League universities recently enjoyed an exemption
from antitrust law, provided they admitted students on a need-
blind basis. In 2022, a group of students filed a class-action
lawsuit against 17 elite universities, including several Ivies,
alleging that admissions are not actually need-blind.
Most of these schools eventually settled the lawsuit for a
collective $320 million.
Another lawsuit was filed in 2024, alleging that elite
universities have continued to coordinate their pricing
decisions even after the antitrust exemption expired.
My testimony does not take a position on whether Ivy League
universities are coordinating their pricing decisions, or
whether they are in violation of Federal antitrust law. The
enrollment, pricing, and spending practices of the Ivy League
raise some red flags.
Classic cartels limit supply to drive up prices and
profits. We observe a version of this happening among Ivy
League schools.
Let's start with restrictions on supply, a fundamental
aspect of cartel behavior.
Harvard College admitted about 2,200 students to join the
Class of 1982. Due to population increases and higher rates of
overall college attendance, one might expect that number to
grow. Instead, Harvard admitted just over 1,900 students to
join its Class of 2028.
Unlike most other private colleges, Ivy League universities
have mostly not increased admissions to match rising demands.
Instead, the schools have opted to become more selective, with
the average Ivy League admissions rate falling from 15 percent
in 2002 to just five percent in 2022.
As student demand rises, but Ivy League institutions keep
admissions relatively flat, the obvious result is an upward
pressure on prices. The annual price of tuition and fees at Ivy
League universities ranged between $59,000-$69,000 in the
previous academic year. That is between 56-82 percent higher
than the average for private colleges.
Ivy League students are also less likely to receive
financial aid. While 84 percent of students at non-Ivy colleges
enjoy a discount off the sticker price, the share of Ivy League
students receiving institutional financial aid is just 52
percent.
In a traditional cartel, restricted supply and higher
prices enable monopoly like profits. While nonprofit
universities don't earn profits in the traditional sense, they
still enjoy surplus revenues. Ivy League universities spend an
average of $126,000 per full-time equivalent student, compared
to just $35,000 for the average private college. These high
levels of spending fuel a vast administrative bureaucracy.
The average Ivy League institution employs one
noninstructional staffer for every two students, compared to
one staffer for every six students at other private colleges.
All this matters because Ivy League institutions have an
outsize impact on the future of America. Ivy League graduates
are vastly over-represented among elites in business, politics,
and media. A group of institutions which limit enrollments and
charges excessive prices denies opportunity to thousands of
students, particularly middle-class students with strong
academic qualifications, who face an unfairly low likelihood of
admission today.
The surplus revenues that Ivy League institutions currently
enjoy fuel administrative bloat, but they could instead be used
to create more seats for qualified applicants.
The market for elite education bears many of the telltale
signs of anticompetitive behavior. Whether it meets the legal
definition of a cartel is an open question, but it
unambiguously leaves students and society worse off.
Thank you for your attention. I look forward to your
questions.
[The prepared statement of Mr. Cooper follows:]
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Mr. Fitzgerald. Thank you, Dr. Cooper.
We will now recognize Mr. Martin for five minutes.
STATEMENT OF SCOTT MARTIN
Mr. Martin. Thank you. Chair Jordan, Ranking Member Raskin,
Chair Fitzgerald, Ranking Member Nadler, and distinguished
Members of the Subcommittee, thank you for extending an
invitation to testify today.
My name is Scott Martin. I am an attorney whose work has
been focused on antitrust litigation for more than 30 years.
That includes more than two decades primarily spent on defense
work, and the past 10 years principally litigating on behalf of
plaintiffs. I am also an author and co-editor of a multi-volume
antitrust treatise. I care deeply about the benefits of
competition and free markets, which is a truly bipartisan goal,
as well as active but fair enforcement of our Nation's
antitrust laws.
As the Members of the Subcommittee know, the antitrust laws
address both unilateral conduct--anticompetitive acts
undertaken by a single actor with market power--and concerted
conduct, particularly when the latter involves direct, or
``horizontal,'' competitors. Most of my remarks will be
directed to the latter as an area of concern regarding higher
education historically--principally, the potential for cartel
activity which the U.S. Supreme Court has labeled ``the supreme
evil of antitrust.''
In testifying today, I make no prejudgment about any
current conduct, nor has my law firm represented a party in the
cases I will discuss. Indeed, the hope of antitrust lawyers is
always that free markets are operating properly and that
unlawful conduct is not interfering with that. There are
several reasons here for heightened vigilance to protect and
encourage robust competition in higher education.
First, as Members of the Subcommittee, as well as many
American students and parents know, the price of higher
education, specifically for private schools, has outpaced the
rate of inflation. Since I was in college, the consumer price
index has inflated the dollar by a factor of three, but tuition
prices at the most selective institutions, in particular, have
gone up on the order of seven-fold.
Meanwhile, output in terms of class size has not kept pace
with population growth. This is true despite increased demand
and increasing multibillion-dollar endowments. Commonsense begs
the question whether such a market is working properly.
Second, the somewhat cloistered nature of these
institutions, their nonprofit status, not to be confused with
their massive endowments, and a belief, of which I am not
questioning the sincerity, that they are engaged in noble work
for the advancement of knowledge, may create an atmosphere
suggesting that relaxation of rules of competition would be
appropriate for this industry. Not so.
Most legal scholars will tell you not only that antitrust
exemptions are rare, and rightly so, but also that special
sectoral rules and regulations have at best a mixed track
record in our Nation. In a different higher educational, my law
firm brought the O'Bannon case that challenged NCAA restraints
on college applicants. That marketplace has flourished, and the
sky has not fallen.
Third, there are numerous markers here, familiar to
antitrust practitioners, that this is a market ripe for
distortion by collusion. Among other things, this is a somewhat
concentrated industry with relatively few highly selective
institutions as participants. There are numerous opportunities
for those entities to collude--whether directly, such as at
meetings of university presidents, or facilitated through
intermediaries such as the College Board. There are, of course,
exceptionally high barriers to entry into the market.
As I mentioned, by way of context, this industry has been
the subject of investigations and litigation raising
competition concerns in the past, on issues ranging from no-
poach agreements concerning graduate school faculty members to
monopolization of markets for college bookstore sales, and
local housing.
A ``Common Application'' used by over 1,000 colleges and
universities throughout the United States also has been the
subject of a private antitrust action, ultimately settled.
Perhaps most pertinent to the Subcommittee here, in 1989,
as you have heard, the DOJ filed a civil antitrust case against
a group of universities alleged to have employed the same
analysis to compute family contributions toward the costs of
attendance, for purposes of collectively determining financial
assistance offered to commonly admitted students.
That case resulted in a 10-year consent decree in 1991,
under which those universities committed not to agree on
student financial aid. It subsequently led to congressional
passage of the so-called ``568 Exemption'' permitting colleges
to formulate common approaches to awarding financial aid,
provided they strictly adhered to need-blind admissions.
The 568 Exemptions expired on September 30, 2022, and was
not renewed. However, as you know, current and former college
students allege, in a class action filed in 2022, that members
of the ``568 Presidents Group'' of 17 top private colleges and
universities have conspired to eliminate competition among them
for financial aid. To date, 12 of those 17 schools have
resolved the lawsuit in settlements totaling approximately $320
million.
I thank you again for your attention and your vigilance in
this regard.
[The prepared statement of Mr. Martin follows:]
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Mr. Fitzgerald. Thank you, Mr. Martin.
Mr. Shieh, you may begin.
STATEMENT OF ALEX SHIEH
Mr. Shieh. Chair Fitzgerald, Ranking Member Nadler, Chair
Jordan, Ranking Member Raskin, thank you for inviting to appear
before you today.
My name is Alex Shieh, and I am a rising junior at Brown
University, one of the most exclusive institutions in the
world. I am not here to glorify the Ivy League. I am here to
warn you the promise of American higher education, of
opportunity to a meritocracy is under attack.
I am a legacy student at Brown. I went to a prep school
that feeds to the Ivy League. My parents are doctors who can
afford the $93,000 a year sticker price. In other words, I am
exactly who the Ivy League was built for.
What about the kids who weren't born on third base?
Statistically speaking, for a smart kid from a poor family
an Ivy League degree can power their ascent to the upper income
brackets better than anything else. That is the American dream.
Today, that dream is now a luxury good.
According to The New York Times, at Brown the median
student's family makes over $200,000 a year. Half of the
student body comes from the top five percent of earners.
Research by Brown's own Professor John Friedman shows that even
equally qualified low-income students are vastly under-
represented.
At this very moment the American people are tightening
their belts. Brown is raising tuition to be beyond $90,000 a
year. Even while charging students the price of a luxury car,
Brown is on track to run a $46 million deficit this year.
Where is all the money going?
I will tell you where it is going. It is going into an
empire of administrative bloat and bureaucracy. Brown employs
3,805 full-time noninstructional staff for just 7,229
undergrads. That is one administrator for every two students.
This isn't education, this is bloat paid for on the backs of
students and families who are mortgaging their futures for a
shot at a better life.
Meanwhile, Grace Calhoun, Brown's athletic director, earns
over $1 million. A household assistant on payroll tends to
University President Christina Paxson. When budget cuts are
made, these expenses stay while the student experience
deteriorates.
My dorm floods when it rains. The burger patties in our
dining hall have been replaced by an unappetizing beef-mushroom
blend.
The idea that Brown's administration can be streamlined
isn't conjecture. We didn't use to have this many
administrators. Across the Nation the number of university
administrators has risen by 162 percent in recent decades. It
is no coincidence that, correspondingly, the cost of education
has risen 181 percent in inflation-adjusted dollars since the
Nineties.
Across the pond, a world class education at Oxford or
Cambridge can cost about half as much as an Ivy League degree,
in part due to a much lower administrative burden.
The status quo has a real human cost. I recently learned of
a brilliant young man from Pensacola, Florida, who got into
Brown but was forced to walk away because the financial aid
wasn't enough.
Brown says it meets 100 percent of demonstrated need. Brown
gets to decide what that need is. Middle class students in
particular suffer from these policies, earning too much to
qualify for generous scholarships, but not enough to go to
Brown without straddling themselves with significant amounts of
debt.
Let's not forget that Brown is one of several Ivy League
schools that settled a Federal antitrust lawsuit last year for
allegedly colluding to suppress financial offers.
I am a reporter for The Brown Spectator. To document this
problem I created a website called ``Bloat at Brown'' that used
AI to assist whether each administrative role was actually
necessary. I sent each administrative employee a DOGE-style
email to ask them, ``What do you do all day?''
Instead of answering, Brown's response was retaliation. My
Social Security number was leaked. Our website was hacked.
Associate Dean Kirsten Wolfe launched a disciplinary
investigation into a litany of baseless charges such as
emotional harm.
When they couldn't get me, they charged every single board
member of The Brown Spectator, an unprecedented attack on
student journalism. We refused to back down and we won our
hearings. There was no misconduct, only exposure. That is what
Brown feared the most.
This Committee has a responsibility not just to investigate
Ivy League antitrust violations, but to reclaim the American
dream from those who have twisted it into a racket. I call on
you today to subpoena Brown's President Christina Paxson and
ask her why Brown costs $93,000 a year.
The American dream isn't just for the legacies, the coastal
elites, or the children of privilege, it belongs to the kid in
rural Kansas with a 4.0 GPA, the first gen student working a
night shift, and the families who did everything right and
still got priced out. They deserve a seat at the table. They
deserve a shot at making it big. Their American dreams matter,
too.
I thank you for the opportunity to testify, and I welcome
your questions.
[The prepared statement of Mr. Shieh follows:]
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Mr. Fitzgerald. Thank you, Mr. Shieh.
Dr. Morgan, you may begin.
STATEMENT OF JULIE MARGETTA MORGAN
Ms. Margetta Morgan. Good morning, Chair Fitzgerald,
Ranking Member Nadler, and the Members of the Subcommittee.
Thank you for the opportunity to testify at this hearing.
The rising cost of college beyond high school in this
country is a major concern for many American families. Whether
they are looking at an associate's degree in nursing, a
vocational certificate to become an HVAC technician, or a four-
year degree in business, Americans looking to get ahead in the
job market are facing high tuition bills. Most students are
forced to cope by taking on student loan debt that becomes a
life-long burden.
I applaud the Committee's interest in costs of higher
education. However, the focus of this inquiry is misplaced. Ivy
League institutions claim less than 0.4 percent of
undergraduate students in this country, whereas the vast
majority of students attend public community colleges and open-
access city colleges.
Ivy League admissions and tuition practices have no effect
on the schools that most Americans attend. Looking for a
solution to college costs in the Ivy League is like looking for
a needle in a haystack while the rest of the haystack is on
fire.
Here's the latest source of that fire: Legislation approved
by the House of Representatives to pay for tax cuts for the
richest Americans by increasing the price of college for low-
and middle-income students, including taking away Pell Grants
from 1.4 million Americans and reducing them for another three
million.
The deep cuts to Medicaid and SNAP in that bill will also
likely increase public school tuition by squeezing the State
budget, as higher education will be at the top of the chopping
block to cover State budget shortfalls.
Antitrust at elite colleges is deeply inadequate for
solving the problem of high prices at college in America.
Attempting to leverage antitrust as a global fix to college
pricing and admissions while simultaneously slashing Federal
support for higher education could very well result in less
access to college for low- and middle-income families, not
more.
Congress has powerful tools at hand that could really
change the price of college and improve the value of the
Government's investment that are outside of this Committee's
jurisdiction.
For example, the Federal Government could use its muscular
role in higher education finance to the advantage of millions
of American families by negotiating the price of college
tuition. There is a strong bipartisan precedent for this in
Medicare, where the Federal Government assigns payment rates to
healthcare services provided to Medicare beneficiaries.
While Ivy League practices don't trickle down to open-
access schools, the predatory practices of for-profit colleges
are definitely trickling up. Community colleges must contend
with for-profit schools that siphon off students through
aggressive marketing and then leave them with high debt and low
earnings potential. As Congress looks to roll back regulation
of for-profit colleges, these conditions will only worsen.
Last, today's focus on Ivy League colleges comes after a
string of actions by Government leaders aimed at gaining
unprecedented levels of control over the minutia of
administration at certain elite colleges. Instead of simply
enforcing the law, Federal officials are openly looking for any
punitive measures that they can apply to bend a handful of
wealthy elite colleges to their will.
Federal officials have put forward a variety of diffuse
reasons for its obsession with the Ivies, but I think this plan
of attack taken as a whole is most reasonably viewed as an
attempt to turn back the clock and restore the role of the
Harvards and Yales of the world as finishing schools for the
children of wealthy and well-connected, rather than knowledge
centers to completely evaluate the challenge social and
political trends.
This attack on Ivy League schools has worrisome parallels
to the actions of an authoritarian regime. Regardless of our
views on elite higher education, it should be of concern
because it is a sharp departure from the law and from our norms
and democratic values.
A strong higher education system is critical to the
country's economic strength, to the strength of our democracy,
and to creating more broadly shared prosperity. We need to be
working together to ensure that we are building a system that
meets all our Communities' needs.
Thank you. I look forward to your questions.
[The prepared statement of Margetta Morgan follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Fitzgerald. The gentlewoman yields back.
Mr. Nadler. Mr. Chair.
Mr. Fitzgerald. The gentleman is recognized.
Mr. Nadler. I have a unanimous consent request.
Mr. Fitzgerald. Without objection.
Mr. Nadler. Mr. Chair, I ask unanimous consent to enter
``China Really Wants to Attract Talented Scientists. Trump Just
Helped,'' from today's The New York Times.
Mr. Fitzgerald. Without objection.
Mr. Nadler. Thank you. I yield back.
Mr. Fitzgerald. Thank you, Dr. Morgan.
We will now proceed under the five-minute rule with
questions. The gentleman from California is recognized, Mr.
Issa.
Mr. Issa. Thank you. Dr. Morgan, you went to Boston
College, also known as one of the New Ivies; right?
Ms. Morgan. I did go to Boston College for law school. I
have no idea whether it is called the New Ivy.
Mr. Issa. Google says it is. Who else can we ask?
The bottom line is undergraduate is now over $67,000, over
$88,000 all-inclusive. Is that one of the elite schools that
you would be referring to beyond the original eight Ivy
Leagues?
Ms. Morgan. Absolutely. I do think that colleges like--
Mr. Issa. Good. Let me ask you a question.
Since you made such a point that Boston College, or other
colleges, the basic eight, and we will just add the New Ivies
that charge similar amounts, they should be exempt from
antitrust because they have a small market share and cater to
the ultra-rich?
Ms. Morgan. My testimony offers no opinion--
Mr. Issa. No, no, no. You made a point as an antitrust
point that because they had such a small market share they had
little or no effect.
Ms. Morgan. I am sorry. Can I answer the question?
Mr. Issa. No. I want you to answer that question.
Ms. Morgan. OK. So, the point I am making about the--
Mr. Issa. I don't want to know the point you are making.
You can say yes or no. Did you say that?
Ms. Morgan. Can you restate the question, please? What did
I say?
Mr. Issa. You said, and I will paraphrase--thank you very
much--you said that we shouldn't be concentrating on them
because they had such a small market share. Is market share a
factor in the antitrust activity of multiple companies working
together in collusion?
Ms. Morgan. I believe we should be focusing on--
Mr. Issa. Now, thank you for not answering that. You make
it easy on me, Doctor.
Mr. Martin, is collusion, even without large market share,
if it makes prices unreasonably high, if it has an effect, is
that antitrust behavior?
Mr. Martin. It is per se unlawful.
Mr. Issa. OK. So, you have per se unlawful behavior
alleged. Yet, the Democrat's witness for some strange reason
wants to say, oh, don't look at that shiny object, instead,
what we heard today was give us more funding for the bloated
State universities that also are raising their prices.
Mr. Shieh, you described yourself as sort of part of the
wealthy and entitled, which is unusual in this body for anyone.
Everyone else seems to want to be Horatio Alger.
Your family was able to pay what needed to be paid at an
Ivy League school, correct?
Mr. Shieh. Right. Most Americans can't afford this, $93,000
a year. That is 150 percent of the median American income.
Mr. Issa. OK. The evidence that is being presented today is
that the effect is not just Ivy League schools, but if you take
away the subsidies being paid by other taxpayers, all
universities are rising at very high rates because of these
practices, including what you talked about, this massive amount
of overhead, if you will, inefficient overhead by
administrators?
Mr. Shieh. Absolutely. Administrative overhead is growing
not just at the Ivy League, but at State universities all
across the country. It has risen dramatically in recent years.
Mr. Issa. Dr. Cooper, is it fair to say that one of the
things you see among cartels, antitrust activity and so on, is
you see higher prices and less efficient, higher overhead?
Isn't that kind of a hallmark when you give antitrust
exemption?
Mr. Cooper. That is correct. We often see higher prices and
higher profits.
Mr. Issa. So, for our witnesses, is it fair to say that if,
in fact, we bring back real competition at all levels, at all
universities, and as a result we then would be able to drive
down prices, drive up efficiency, we could, in fact, allow more
people to be able to leave college without burdensome debt?
Mr. Cooper. I think that is correct. We need more
competition in higher education.
Mr. Issa. OK. So, today's hearing is really about antitrust
behavior by the most esteemed universities.
Mr. Shieh, I am going to ask you a question. Is it your
understanding as a rising junior, if I am correct, that if you
go to one of these great universities the rest of your life
your career income is on average greater, isn't it?
Mr. Cooper. This is empirically true that going to an Ivy
League school can definitely raise your potential earnings,
especially if you are from a low-income family.
Mr. Issa. So, Mr. Martin, the tendency by the universities
that will deliver the highest lifetime earning to restrict, to
reduce and, as a result, to deny to the people who otherwise
would have that opportunity, isn't that one of the real
detriments of this antitrust behavior?
Mr. Martin. It should trouble us as antitrust lawyers.
Mr. Issa. Thank you. I yield back.
Mr. Fitzgerald. The gentleman yields back. I now recognize
the Ranking Member for five minutes.
Mr. Nadler. Thank you, Mr. Chair. Dr. Morgan, before I
begin my questions can you please give your answer to Mr.
Issa's question on market size?
Ms. Morgan. Yes. I believe that market size is relevant
here to the question of where we should be focusing our
attention. The vast majority of students in America do not
attend Ivy League colleges. They don't attend colleges who are
affected by the competitive forces that the Committee is
discussing here today.
We need to be focused on open-access colleges and community
colleges who take their cues from the State legislators and
Federal legislators who provide sufficient resources for their
budget.
Mr. Nadler. Thank you. For many, college is a good
investment that ensures greater earnings over a lifetime and an
opening to the middle class. However, the cost situation at
many schools is too high, closing the door to families who
cannot afford the high sticker price.
Despite this affordability problem and the growing
disparity between the richest few and the many who are seeing
rising prices in all parts of the market, the Republicans'
reconciliation bill takes direct aim at student loan programs
and other critical student aid program.
The Trump Administration has also taken aim at students and
universities while pulling critical research funding and
kidnapping students and academics off the street.
Dr. Morgan, how does the Republican budget impact low-
income students and the public's access to higher education
going forward?
Ms. Morgan. The Republican budget is going to have drastic
negative impact on the cost of higher education for most
students in this country. As I said in my testimony, ``it is
going to cut programs for millions of students, making them
foot the bill for more of college.'' It is going to make
student loans more expensive to repay on the backend.
It caps the amount of Federal student loans that people can
take on but not the amount of tuition, meaning that more people
are going to have to take on private student loans to cover
that gap.
Mr. Nadler. How does higher education support the country
and our economy generally?
Ms. Morgan. Higher education is incredibly important to our
economy, and it serves a number of focuses.
First, those open-access schools and community colleges
that I referred to are educating people to become doctors--
sorry, to become nurses, nurse practitioners, HVAC repair
people, electricians, and the people who serve our communities
every day and make our economy robust.
Our educational institutions also provide funding for--or
receive funding to do research that provides innovations that
are incredibly important to our society. They make us safer,
they make us healthier, and they make our country more
competitive.
Mr. Nadler. Well, following up on that, how does the
gutting of Federal research programs at the National Institutes
of Health, the Centers for Disease Control and Prevention, and
the National Science Foundation impact not just the
institutions but society and even humanity?
Ms. Morgan. I think we are all going to feel the impacts of
these cuts for a long time. We are not going to be developing
the drugs that make us safer and healthier in this country. We
are not going to be developing the innovations to help keep us
competitive and power manufacturing within our country.
It is going to have a really big impact on us as a whole. I
also think it is going to move more innovation to the private
sector, which means that we are really only going to be
developing the innovations that are profitable, and not
necessarily the ones that are best for the public as a whole.
Mr. Nadler. Most of our drugs are not initially profitable
without Federal research.
Dr. Morgan, the United States has been the beneficiary of
foreign students coming here, being educated here, the best and
the brightest. Staying here is one of the reasons for our
scientific supremacy.
What is the effect of the Trump Administration's hostility
to foreign students, and denials of visas, and even the
revocations of visas, what will be the effect on our economy
and on our scientific supremacy?
Ms. Morgan. Yes. First, we have to view this attack on
foreign students at American colleges as part of a larger
punitive effort to bend certain colleges to the
administration's will.
So, this is really part of an effort to turn the screws
into any place that the administration can, to bring colleges
around to a--
Mr. Nadler. Well, what would be the result?
Ms. Morgan. Oh, sure. The result of this change to
admission for international students is going to have an effect
on our country's ability to bring in minds from across the
world and benefit from their academic excellence to provide an
opportunity for those students to take part in our democracy
and learn our values.
Mr. Nadler. In short, it promises to shift scientific
primacy from the United States to China. Would you agree with
that?
Ms. Morgan. I totally agree with that.
Mr. Nadler. Thank you. I yield back.
Mr. Fitzgerald. The gentleman yields back. I now recognize
the gentleman from Washington for five minutes.
Mr. Baumgartner. Well, thank you, Mr. Chair, for holding
this important hearing. There is zero doubt that the Ivy League
institutions behave in an anticompetitive manner.
In fact, if you look at their pricing and value marketing
model, it looks very similar to some famous jewel companies and
how they control supply of diamonds and inflate what is a
commodity into a precious item of limited scarcity.
I do believe that American higher education is a gem of
American society. What it does for research, social mobility,
and overall aid to our economy is extremely important.
Unfortunately, it is a gem that has been thrust into the
mud, largely by Democratic leadership. Democrats are great if
you are a college administrator and want to see your salary
increase, or your job supply increase. They are terrible if you
are a college student and you don't want to see your debt
levels increase.
The right price for college should be the price at which a
student can get through with zero debt. College should be
priced at the level you can work a part-time job or a summer
job. The problem with an 18-year-old is they don't know the
difference between $6,000 in debt or $60,000 in debt if they
have never had a job and had to pay it back.
What this body should be doing is how do we create an
environment where a student, all students can get through
school with no debt.
When I was in our State Senate, as Republicans when we took
control in the State Senate, we actually dropped the price of
college tuition 20 percent in Washington State under Republican
leadership because we were working for the middle class.
I have had the experience of going to a big State school,
Washington State University, where my father was a professor. I
spent a year as a teacher at university, Catholic University of
Mozambique teaching war refugees. I was a teaching fellow at
Harvard when I did my Master's there. I was on, short-term on
the faculty at Sciences Po University in Paris, which is kind
of the Harvard of France.
Across all those experiences what I saw is that the amount
of growth in administrators in American universities is simply
out of control. When you go to Sciences Po there is no
diversity dean, student housing dean, and student welfare dean.
There is simply this reliance on college students to behave as
adults and figure stuff out for themselves. In doing that, they
are able to provide college at a much, much lower level.
What this body needs to do is to figure out ways to get out
all the B.S. out of higher education, get back to basics, and
create mechanisms to bring costs down.
I do want to touch on this issue of the Ivy Leagues, and
Harvard specifically, which does have some real problems.
When I went to Harvard there was a lack of viewpoint
diversity. We used to call the Republican Club the Phone Booth
Club because there were so few of us that we could fit in a
phone booth. Now, I make that joke and a lot of students don't
even know what a phone booth is.
In any event, the solution to this is just to make these
universities reflective of American society. It is like Noah's
Ark, increase in access and viewpoint diversity. This shouldn't
be hard except the fact the far Left does not want to give up
its stranglehold on America's most elite universities. This is
going to happen.
Second, there is a problem with the Chinese Government and
foreign institutions utilizing America's most elite
universities.
When I went to Harvard there was sort of a small-scale
scandal. They refused to fly the flag of Taiwan at that time.
In fact, we have some important legislation here in this body
in the Deterrent Act which we passed out of the House that
would illuminate how much foreign influence is going on the
college campuses from places like China. Even today, Harvard
resists implementing that bill.
I would like to enter for the record this column, this
newspaper article that ``Harvard Has Trained So Many Chinese
Communist Officials, They Call It Their ``Party School.' ''
There very much is a problem of China at these universities.
If I could enter this in the record.
Mr. Fitzgerald. Without objection.
Mr. Baumgartner. Thank you, Mr. Chair.
Finally, I just want to thank all the panelists for
fighting this antitrust issue. As we think about these issues,
we all need to realize that college enrollment is about to go
off a cliff due to demographic changes in America.
We have a silver tsunami of older Americans. We have a
dwindling rapid supply of college students because of
demographic factors in terms of birth rates, and also the cost.
This anticompetitive behavior will likely become worse in
the coming years as the total market for college students will
reduce.
With that, I yield back.
Mr. Fitzgerald. The gentleman yields back. Mr. Nadler is
recognized for a unanimous consent request.
Mr. Nadler. Mr. Chair, I ask unanimous consent to enter
into the record an article from New America titled, ``The House
Reconciliation Bill Makes College Less Affordable, All to Pay
for Tax Cuts for Millionaires and Billionaires,'' and argues
low income to moderate students will ``borrow more, but with
worse terms.''
I also seek unanimous consent to enter into the record, two
articles: One entitled ``The Number of 18 Year Olds is About to
Drop Sharply,'' as the gentleman said.
Another entitled ``Declining Enrollment is Leading to
School Closures.''
Mr. Fitzgerald. Without Objection.
Mr. Fitzgerald. The Ranking Member of the Full Committee,
Mr. Raskin, is now recognized for five minutes.
Mr. Raskin. Thank you, Mr. Chair. Mr. Shieh, so you
describe yourself as a son of wealth and privilege. I think you
described yourself as a legacy student.
Does that mean your parents or your grandparents went to
Brown?
Mr. Shieh. Yes. My father went to Brown.
Mr. Raskin. Other than having some complaints like the beef
mushroom blend, you are really speaking not so much for
yourself, but for other kids. You say the kids who are not born
on third base, is that right?
Mr. Shieh. Absolutely. The value of an Ivy League degree
used to mean that you were smart, that you are brilliant. It is
being diminished.
Mr. Raskin. As you know, the vast majority of young people
who want to go to college are not going to be able to go to
Brown, even if you increase the class sizes, you have
advocated, by a couple hundred kids. The vast majority are
going to end up going to, if they can afford it, State
universities, community colleges, and so on.
My question for you is, will you use your platform here
today to oppose the major cuts in Pell Grants, which have
allowed an avenue for upward mobility in education for young
people that are built into the current tax bill?
The 1.4 million Americans would be thrown off. I just
wonder if you would oppose the cuts to Pell Grants, the cuts to
student loans, and the 80 percent cuts to college work study,
which you know allows people to work their way through college?
Mr. Shieh. Well, I think something that we have observed
economically is that--
Mr. Raskin. No, I am going to--like my friend, I am going
to ask you to answer the question. Do you oppose all those
cuts, or do you support them?
Mr. Shieh. I guess, I believe that subsidizing education
only increases the cost, because they do.
Mr. Raskin. You favor those cuts. You would just get rid of
the Pell Grant program, is that right?
Mr. Shieh. I am not an expert on the Pell Grant program. I
know that generally--
Mr. Raskin. You seem to be an expert. You don't favor
Federal student aid to kids who want to go to college, for Pell
Grants or college work study. You are opposed to that?
Mr. Shieh. I think that when students don't pay the cost of
going to college, then we have seen prices rise.
Mr. Raskin. You have made yourself clear. Thank you for
coming in for your testimony.
Look, a point was made before that collusion is per se
illegal, which of course is true as a matter of antitrust law.
Per se collusion is only legal if there is actually per se
collusion.
Now, this reminds me of a hearing that we did over in the
Oversight Committee with Chair Comer about impeachment where
the Republicans lined up all these witnesses about impeachment
of Joe Biden and then all of them said that they did not see
evidence, they were not aware of evidence that would justify
impeachment.
So, the two expert witnesses here, Dr. Cooper and Mr.
Martin, as I am reading your testimony, are saying that they
don't have evidence of price fixing.
Mr. Martin says, I think you just stated it, I am making no
judgment about any current conduct. You are not making a
statement.
Dr. Cooper, you said, ``My testimony does not take a
position on whether Ivy Leagues area coordinating their pricing
decisions or whether they are in violation of Federal antitrust
law.''
Again, this is much ado about nothing. This is an attempt
just to create a propaganda smokescreen to attack the Ivy
League schools.
Your expert witnesses are saying that they don't have
evidence that there are antitrust violations going on. Of
course, they are correct, because if there were, the Trump
Department of Justice would actually be engaged in prosecution
or an investigation of them.
So, we have one champion of the working class at Brown
University, who is opposed to Pell Grants and other means for
kids to actually go to college in America where most kids do go
to college, and two expert witnesses who don't see price fixing
taking place by the Ivy League institutions.
There is a real problem in America: Only 10 percent of
college students go to for-profit colleges, but they are
responsible for 50 percent of all student loan defaults.
I am going to ask for unanimous consent to enter a campaign
statement by Marco Rubio entitled, ``Trump University is an
Absolute Scam: Get the Facts About Pending Litigation,'' if we
could, Mr. Chair.
Mr. Fitzgerald. Without objection.
Mr. Raskin. Dr. Morgan, let me go to you. How does the
Republican attack on regulatory protections against for-profit
colleges and universities affect the fraud against students
taking place in the education market generally?
Because they are dismantling the regulations that were put
in place to protect students against for-profit university
fraud.
Dr. Morgan. Yes. We are seeing action both here in Congress
and at the Department of Education that are dismantling or
laying the groundwork to dismantle all the protections that
have been put in place for for-profit schools.
What we have seen cyclically over time, is when those rules
are pulled back, we have increased enrollment in for-profit
colleges. We have increased debt that people can't pay off, and
we have increased allegations of fraud.
Mr. Raskin. OK. What about their move to abolish the
Department of Education and to gut the Consumer Financial
Protection Bureau, will that exacerbate the difficulties that
young people are having paying for college?
Dr. Morgan. We are taking the cops off the beat who can
actually identify that fraud and stop it and put money back
into people's pockets.
Mr. Fitzgerald. The gentleman's time has expired. I ask
unanimous consent to enter into the record the following, an
article from Ivy Coach titled, ``Ivy League Tuition and Fees
for 2024-2025,'' comparing tuition rates among the eight Ivy
League schools.
Also, an article from Ivy Coach titled, ``Ivy League
Admission Statistics,'' comparing the acceptance rates among
the eight Ivy League schools.
Mr. Fitzgerald. I now recognize the gentleman from
Virginia.
Mr. Cline. Thank you, Mr. Chair. I appreciate the hearing,
and I appreciate the comments of the Ranking Member.
Let's define what collusion is. Let's actually look at
Cornell Law School's definition. An Ivy League definition of
collusion in antitrust law. Horizontal collusion exists where
competitors at the same market level agree to fix or control
the prices they will charge for their respective goods or
services.
For instance, two parties may collude by limiting or
restricting supply, sharing insider information, or dividing
the market. It is very clear that the eight Ivy League member
institutions have a long history of colluding with each other
and other elite higher education institutions.
Back in 1958, they formed a cartel called the Ivy Overlap
Group that created a common formula for calculating financial
aid packages to ensure that a student admitted to one or more
of the Overlap Group institutions would pay the same maximum
price to attend, regardless of the institution that they chose.
The Overlap Group would accomplish this by sharing
information and determining the maximum price that admitted
students' families could afford to pay.
Later, operating under a now expired antitrust exemption,
many of the Ivy League institutions and other elite higher
education institutions formed the 568 Presidents' Working
Group, which likewise created a common formula to ensure 568
PWG schools would not compete on price.
This behavior led to lawsuits and settlements against many
of the Ivy League institutions. Dr. Cooper, does this cartel of
elite higher education institutions have the ability to raise
the cost for students and their families who are attempting to
pay for college?
Mr. Cooper. Absolutely Congressman. I believe the opaque
financial aid system enables Ivy League colleges to charge much
higher prices than they would be able to in a competitive
market.
There is a billion-dollar consulting industry that helps
Ivy League institutions figure out exactly how much each family
is able to pay and then charge that amount.
Mr. Cline. We have seen collusion on pricing before
enactment of the Section 568 exemption, and while the exemption
was in effect. Now, we are concerned it persists today, even
though the exemption has expired.
What gaps in enforcement have allowed Ivy League
institutions to effectively operate as a pricing cartel?
Mr. Cooper. The prices that colleges charge are very opaque
right now. You have to apply and be admitted to figure out how
much you are going to pay.
At that point, the college sort of has you captive. It is
going to be very difficult for you to comparison shop at that
point, go to a different school. You kind of have to accept the
price that the school is charging you or else maybe not go to
college.
Mr. Cline. A similar question to Mr. Martin. These
institutions through the Overlap Group and the 568 Presidential
Working Group used this common financial aid formula for
decades to make sure that they weren't competing on price.
Do you think that these institutions could still be using
that same revenue maximizing formula to calculate financial aid
awards that they used while the exemption was in place?
Mr. Martin. Well, that is the subject of ongoing litigation
in the Northern District of Illinois. To put a finer point, I
make no prejudgment as to what the outcome of that litigation
would be.
I only note that 12 of the 17 member institutions have
settled it for a total of $320 million. It survived a motion to
dismiss. It has gone on through discovery.
Quite candidly, some of the documents in that case will be
challenging for the remaining defendants.
Mr. Cline. If they are shown to be using the same formula,
could that present significant antitrust issues?
Mr. Martin. It could. There is substantial damages alleged
in the case.
Mr. Martin. Mr. Shieh, Brown's estimated cost of attendance
during the 2025-2026 academic year is $97,284 per year. That
means Brown values a degree from its institution at almost
$400,000.
Do you think a degree from Brown is worth nearly $400,000?
Mr. Shieh. That is a very good question. I think that is
that empirically it is just barely worth it. That for the kids
who it could help the most, that is too much for them to pay
upfront.
Mr. Cline. I appreciate that. I would argue that it does
not, the worth is not four times the worth of an in-State
school or six or eight times that of a community college
education.
With that, I would yield back.
Mr. Fitzgerald. The gentleman, yields back.
Ms. Balint. Mr. Chair, I have a UC.
Mr. Fitzgerald. The Member is recognized.
Ms. Balint. I ask unanimous consent to enter into the
record ABC News article, ``Judge Finalizes $25 Million
Settlement for `Victims of Donald Trump's Fraudulent
University,' '' and a USA today, ``Trump University settlement
finalized by judge at $25 million.''
Mr. Fitzgerald. Without objection. The gentleman from
California is now recognized for five minutes.
Mr. Correa. Thank you, Mr. Chair. I appreciate you and the
Ranking Member. Thank you for holding this hearing today.
I am sure here in Washington, DC, discussing Brown,
discussing Harvard, and discussing private elite universities,
is very important somehow, somewhere, but not to my district or
blue-collar middle class.
My dad wasn't a doctor. He was a union worker making
cardboard boxes. My mom used to clean hotel rooms at a $1.50 an
hour and we managed to survive.
My neighbors, myself, we were all in the same boat. We
never thought about Harvard because we weren't going to have
the grades, we weren't going to have the money, and we had to
survive, pay the rent, pay the bills on a day-to-day basis.
I appreciate holding this hearing today, talking about
these elite institutions. I can assure you back home, nobody
gives a darn about this stuff.
What they care about is how to survive on a day-to-day
basis. Public policy, government subsidization of public
education, what is that old saying, ``if it ain't broke, don't
fix it.''
The GI Bill, World War II over, the greatest generation
comes back to the U.S. We decided to pay for their college
education.
We educated a generation, the greatest generation that
built the greatest country in the world on the government dime.
My generation.
I did go to Harvard of the West Coast, Cal State Fullerton,
and a second-rate school. Not at UC, but at Cal State. That was
right for this kid from the hood.
By the way, my tuition then was zero, Pell Grant. Pell
Grant paid for everything, and I skipped a few meals to make it
happen.
Here we are today discussing Harvard and Brown. I am going
to have to go back and tell my constituents that the two or
three hours you spent here today is going to make a big
difference in their life.
I will tell you what they are looking at. Pell Grants, Cal
Grants, cutting of Pell Grants, and school loans. They want to
know how they can also get the opportunity to go to college.
By the way, subsidization of education, I thought we were
all taxpayers. Do we not have the opportunity as taxpayers to
say where our tax dollars are going to go? Don't those
taxpayers go to our children? The greatest gift God gives us,
our children to educate them.
What is wrong with a subsidized loan that they will have to
pay back? What is against public policy here? Again, ``if it
ain't broke, don't fix it.''
Let's go a little bit further, current administration,
public policy, research grants, California, and immigrants. The
chart behind me shows all the AI companies that have been
recently started up by immigrants in this country. I thought we
were supposed to win the AI competition.
I bring this up in the context of, ``if it ain't broke,''
why are we changing education, public policy, investing in
research and development, investing and making sure the best
and the brightest from around the world come to help us come up
with new inventions in this country, keep us ahead of the rest
of the world.
Again, what is it that is broke that we are trying to fix?
Mr. Raskin. Would the gentleman yield for a question?
Mr. Correa. Go ahead.
Mr. Raskin. Mr. Correa, thank you for your very passionate
and eloquent remarks. What would have happened to you if you
had not had access to Pell Grants and Cal Grants and public
money to go to school?
What would happen to your working-class constituents today?
Mr. Correa. Well, you are asking me to delve into a
personal confession. The gift that my father gave me when I
graduated from high school was he said,
I can't give you a watch. Can't give you something nice, but I
can free you. You don't have to help us pay rent or pay the
bills. You focus on studying, and that is where that financial
aid came into being.
This kid from the hood, who wasn't quite ready for college, was
able to make it with that financial aid.
Mr. Fitzgerald. The gentleman's time has expired. I now
recognize Mr. Gooden from Texas for five minutes.
Mr. Gooden. Thank you, Mr. Chair. One of the points Mr.
Shieh was trying to make was that these universities shouldn't
be so expensive in the first place.
None of us want to take away Pell Grants and loan support,
et cetera, financial aid for anyone that needs it. Our point
is, it shouldn't cost this much in the first place to the point
that we need $400,000, whether it is subsidized or not, to pay
for these degrees.
I am curious, Mr. Shieh, when you started asking all these
questions and making noise at Brown University, what was their
response to you?
Mr. Shieh. They were not very happy. The Brown
administration told people not to respond to our emails. Then,
they hit us with a disciplinary investigation, charging me
personally for bizarre things such as emotional/psychological
harm.
Apparently, that is a real student code of conduct
violation. I was found not responsible for anything. They also
dragged in the entire Board of the The Brown Spectator and
charged all of us. Luckily, we were cleared. That shows that
there is rot and they are trying to cover it up.
Mr. Gooden. Isn't that interesting that they had a problem
with your free speech and the work you were doing, but they did
not have a problem with the pro-Palestinian encampments and all
the antisemitism?
Isn't that just wildly ironic that they would go after
little old you, just a student that is banging the drum,
kicking, and screaming, about high costs?
That pissed them off so much that they started an
investigation and came after you. They didn't have a problem
with the antisemitism all over their campus.
Mr. Shieh. This is certainly a double standard. In 2023, we
saw that a large group of protestors were actually arrested for
trespassing.
They invaded one of the buildings and they were asked to
leave. They didn't leave. They were arrested, and Brown told
the prosecutor to drop the charges. They weren't disciplined at
all. I think there is a clear double standard here.
Mr. Gooden. Well, I hope you will keep after it. The fact
that the Democrats on this Committee are going after you, not
hard, I will give them credit but trying to nail you down on a
Pell Grant question that it really doesn't have anything to do
with the point we are trying to make here.
The point is, if college was not so expensive, we would not
even need all this financial aid because it would not cost a
fortune to go to college. It should not cost $400,000. Kids
that cannot afford it would not need the aid that they get,
because they would have aid, but we would not need $400,000 of
it.
I hope that every child and every student in America can go
to whatever college they want. They are not going to as long as
class sizes are limited and the price tags keep going up.
Another interesting tidbit that I have found in all this,
are all these endowments. One of my colleagues on the other
side said, ``taxpayer money was meant to go toward funding
this.''
If an Ivy League institution has billions of dollars in
their endowments--
Mr. Mr. Correa. Will the gentleman yield?
Mr. Gooden. Then, I am wondering how much needs to be given
to this university with extra taxpayer dollars? Dr. Cooper,
will you comment on that?
Mr. Cooper. Absolutely. Some of these Ivy League
universities have endowments in the tens of billions. Harvard
has an endowment North of $50 billion.
These institutions actually are less likely to provide
institutional financial aid than other private colleges with
fewer resources.
Mr. Gooden. Yet, my colleague over here seems to just be
outraged that we would want Harvard, Brown, or name your
university, to use their endowment billions to educate the
masses rather than to use taxpayer dollars to further their
cost escalations and their price increases.
Am I missing something, Dr. Cooper?
Mr. Cooper. I think you are right. Harvard and other Ivy
League institutions could certainly be doing a lot more with
the tremendous resources they have available to make college
more affordable for their students, and to expand to more
talented students.
Mr. Gooden. Well, I praise your work. I am sorry on behalf
of my colleagues on the Left that seem to be so angry with your
exposing of the corruption, the collusion, and the exorbitant
cost increases of Ivy League educations.
I can't hear one peep out of them with respect to the
antisemitism in these same Ivy League institutions. They are
all mad at President Trump for actually standing up against
this antisemitism that we are seeing.
They are mad at President Trump for trying to bring down
the cost. Saying to these Ivy League institutions, we are not
going to keep sending you money of U.S. taxpayer dollars as
long as you are helping to propagate this antisemitism.
They are doing nothing about this. Democrats are so mad at
the President for standing up for the students, and for
standing up for the taxpayers that they instead are wasting
your time going after you.
Keep it up, Mr. Shieh. Dr. Cooper and Mr. Martin, I
appreciate your work. I encourage you to keep the pressure on
Brown, especially Mr. Shieh.
Don't be discouraged and know that the American people, the
vast majority of the American people support your efforts, and
we stand with you, and we share your views. Thank you.
Mr. Fitzgerald. The gentleman yields back. We have a couple
of unanimous consent requests. Mr. Correa first.
Mr. Correa. Thank you, Mr. Chair. I have a unanimous
consent for including the following items in our record:
(1) ``Trump is Crushing America's AI Leadership, We Still
Have Time to Fix It.'' April 23, 2025.
(2) ``JD Vance Wanted to Aggressively Attack American
Universities.'' June 3, 2025.
(3) ``Cost of Federally Sponsored Research.''
(4) Infographic on the Associate of American University's
website, 2022.
(5) ``Benefitting Society and the Economy American
Technology Transfer for 2023.''
(6) ``Federal R&D Cuts Would be Another Unforced Policy
Error.''
(7) ``America's R&D Rethink Threatens Its Innovation
Supremacy.''
(8) ``New American Fortune 500 in 2024, American
Immigration Council.''
(9) ``U.S. Scientists Warned that Trump's Cuts Will Set
Off Rain Drain.''
(10) ``These are the U.S. Universities More Dependent on
International Students.''
(11) ``Losing International Students Could DevaState Many
Colleges.''
Thank you, Mr. Chair.
Mr. Fitzgerald. Without objection. I will ask unanimous
consent to enter into the record the following:
A Washington Post article titled, ``Students Overpaid Elite
Colleges $685 Million Price Fixing Suit.''
A Press Release from Berger Montague titled, ``Plaintiffs
in Elite University Price Fixing Case Settle with Cal Tech and
Johns Hopkins.''
Also, Plaintiff's Memorandum of Law in support of their
Motion for Class Certification in the case of Horzo v. Brown.
The gentlewoman from--
Mr. Raskin. Mr. Chair, I just had one more, if I could.
Mr. Fitzgerald. Go ahead.
Mr. Raskin. This is just for one article entitled,
``Congressional Republicans Budget Reconciliation Bill Imperils
4.4 Million Pell Grant Recipients.''
Mr. Fitzgerald. Without objection. The gentlewoman from
Vermont is now recognized for five minutes.
Ms. Balint. Thank you, Mr. Chair. We should be able to work
together and find bipartisan solutions to this problem.
I have two teenagers myself. They are starting to look at
colleges. I have got sticker shock, as do most parents who go
through this process.
I am really worried about all the talented students who
don't even apply, not just because of the tuition, or the room
and board, but simply the fees to apply. It is out of reach for
so many families.
The astronomical costs mean working people do not have a
fair shot at higher education. I think that this is why we have
been so vocal today about the cuts to the Pell Grant program.
Everyone seems to agree that the high cost of college is a
real problem in this country. We can't seem to agree on how it
is that we are going to bring down tuition costs.
This is the kind of thing that Americans want us to be
working on, to the point that my colleague was making here.
They want us to come together and actually dig into the problem
of how we solve this so that every student has an opportunity
to go to college.
That is not actually why we are here today. It is so clear
that this is not what this is actually about. Dr. Morgan, I am
so glad that you are here, and I thank you so much for your
time.
Can you take us through the crux of what it is that we are
supposed to be doing here, which is unpacking all of this?
What are the things that are driving these higher costs in
education?
Dr. Morgan. Yes. Thank you for the question. It differs
really by sector. There are a lot of varied factors that go
into college costs.
It really differs by the type of institution and the type
of business model. So, when we take a look at a for-profit
college, they are out to maximize their profit.
The cost of providing the education is actually quite low
and doesn't really drive the tuition prices. Their cost of
marketing is quite high because they are trying to bring people
in the door.
When we think about State institutions and community
colleges that are educating the majority of students who go to
college in this country, studies have shown that the thing that
is really driving their costs or the cost of tuition is State
appropriations.
That is why I have been quite focused on what Federal and
State aid, and local aid as well, is going to these colleges
and how what we do at the Federal level impacts those State
budgets. Because we are going to see a squeeze on the State
budgets that increase the price of tuition.
What we have seen in the past is it takes a really long
time to unwind that, even if we are looking at something that
only affects a given year.
Ms. Balint. What you are saying is true that if we are not
investing in the institutions that most of our students go to,
we are compounding the problem.
Dr. Morgan. That is right.
Ms. Balint. I really appreciate that. When we are talking
about the affordability problem, are we talking about all
institutions of higher education in the United States? Or is it
just the Ivies?
Dr. Morgan. There is a broad swath of colleges where the
tuition is quite high and where they are using these opaque
discounting models to get to a net price.
There are a lot of colleges in this country that have held
their costs quite low, despite weathering the storms of State
budgets and cuts to Federal aid, and are really doing their
best to provide an education at a transparent price to people
where they can come out with as little debt as possible.
I do think one thing to think about with that group of
institutions and that group of students is how the costs in the
rest of those students' lives have gone up.
Ms. Balint. That is right.
Dr. Morgan. For community college students in particular,
they are going to be affected by cuts to things like SNAP. They
are also affected by the impact of things like the tariffs, and
the cost of living increases that this is having for families.
So, for them, the whole package and their indebtedness to
achieve an education is going to be higher because of all the
rising costs that we are seeing right now.
Ms. Balint. I really appreciate that. It is a complicated
problem. It requires a seriousness of purpose and not some sham
hearing.
My Republican colleagues are not here to seriously
investigate the problem of college affordability. They are here
to advance Donald Trump's culture war against people and
institutions that he doesn't like, and to go after anyone who
remotely disagrees with him.
He wants to continue to silence the opposition. The reason
I know this is because my Republican colleagues, every single
one of them across the aisle here voted to eliminate or reduce
student aid, increase monthly student loan payments, and drive
students to take out predatory private loans.
This hearing once again, which we have seen over and over
again in this Committee, is to do the President's dirty work.
We have real work that we should be doing to support our
students, but we are preoccupied with going after the
President's supposed political enemies.
It is a shame, and it is a disservice to our students
across this country. I yield back.
Mr. Fitzgerald. The gentlewoman yields back. The
gentlewoman from Wyoming is recognized for five minutes.
Ms. Hageman. Thank you. I yield my five minutes to Mr.
Nehls from Texas.
Mr. Nehls. Thank you, Ms. Hageman. Thank you for our
witnesses taking the time to be here. As we have already
discussed, the tuition rates at self-proclaimed elite
universities have ballooned over the years due to longstanding
collusion between them, longstanding collusion.
This has allowed these schools to accumulate the kind of
severe administrative bloat rarely seen outside of our own
Federal Government.
As Dr. Cooper testified, Ivy League Universities average
one noninstructional staff per two students. How do you like
that ratio?
Yet, the average private university gets by with one third,
the administrative staff. Much like we see in the Federal
Government at some point bureaucracies, they get so big, fat
and bloated that they serve no real purpose other than to
justify their own existence.
If these elite universities have one administrative
employee for every two students, then what exactly are they
employed to do?
Well, one of our witnesses, Mr. Alex Shieh, decided to ask.
Great question, Alex. Pursuant to his work as a student
journalist, investigating administrative bloat at Brown, Mr.
Shieh emailed all 3,805 nonfaculty employees of the university
to inquire about what their job entailed. Right?
Rather than simply respond to the inquiry, Brown chose to
initiate disciplinary proceedings against Mr. Shieh. I was so
appalled when I heard about this that I wrote a letter to Brown
urging them to reverse course.
I believe our fearless leader, Chair Jordan in the
Committee, they wrote a letter and Brown reversed course. I am
glad they did.
It is one thing to create a vast, useless administrative
bureaucracy to justify an exorbitant tuition rate of $93,000.
To punish a student journalist for daring to ask a question
about it, is unacceptable.
Mr. Shieh, what first prompted you to make the inquiry?
Mr. Shieh. That is an excellent question. Brown has a $46
million budget shortfall, even while charging students the
price of a luxury car. It doesn't seem like they want to cut
any administrators. They have hiring freezes, but they are not
willing to cut any jobs.
I thought this was something that needed to be looked into.
Mr. Nehls. Why do you think the employees that you emailed
didn't answer your questions, many of them didn't respond?
Mr. Shieh. Well, some of them answered. The ones who
answered seemed to have pretty useful jobs. I guess we can
maybe infer that the ones who didn't have jobs that are not so
important.
Mr. Nehls. The ones that didn't were too embarrassed. They
were too embarrassed; they weren't going to respond to you.
Why do you think schools like Brown might be more frugal in
administrative spending if they had to pay the same 21 percent
tax rate on their endowment profits as corporations?
Mr. Shieh. Certainly, when you have to pay higher taxes,
there is less money floating around, and you got to tighten the
budget.
Mr. Nehls. Now, that is beautiful. We put it in
reconciliation now for these universities. It was 1.4, now it
is going to go to 21 percent. Twenty-one percent, I am so
excited that this legislation was in our reconciliation.
How about you, Dr. Cooper, what do you think?
Mr. Cooper. I think that the 21 percent tax on endowments
will probably induce some belt tightening among these Ivy
League institutions.
I would also note that the taxes are structured such that
if you expand your enrollment, you face a lower tax rate. That
might be an inducement that some of these colleges need to
actually admit more qualified students from middle income
backgrounds.
Mr. Nehls. Well, let me be clear, we are not actually
taxing the endowment itself. It is the net profits, the
earnings on their investments. We are expecting $7-$10 billion
annually, $7-$10 billion is a big deal.
Mr. Cooper, the average four-year private university costs
around $35,000 per student, while the Ivy Leagues average
$126,000. To what degree is administrative bloat attributed to
this?
Mr. Cooper. I can't imagine that most of that extra
$126,000 in spending per student is really going to benefit
students. What we see is much higher administrator to student
ratios at Ivy League institutions than other private colleges.
Mr. Nehls. Thank you. Thank you, Ms. Hageman. Mr. Chair, I
yield back.
Mr. Fitzgerald. The gentleman yields back and the
gentlewoman from Wyoming's time is yielded back. I now
recognize the gentleman from Illinois for five minutes.
Mr. Garcia. Thank you, Mr. Chair. This hearing highlights a
real problem, the crisis of affordability in higher education.
Instead of focusing on systemic issues and solutions,
Republicans have chosen a narrow and misleading target, the Ivy
League, which enrolls less than one percent, half of one
percent of all undergraduate students.
It has been stated before, rising costs are not unique to
the Ivy League. Over the last two decades, tuition and fees at
private and public universities have increased by over 100
percent.
This problem isn't limited to antitrust violations by the
Ivy League. It is a problem that affects working families,
regardless of which school students attend.
This problem is rooted in the commodification of education.
Many schools have become real estate trust and hedge funds that
treat education as an afterthought.
They gained the ranking system by jacking up tuition,
offering discounts in the form of financial aid, knowing that
they can exploit the student loan program and load their
students with debt. This model has been a disaster for students
and for our economy.
Higher education is becoming more essential and more
unafford-
able. Over 40 million people hold nearly $2 trillion in debt.
The Black and Latino students, immigrant students, and first-
generation students in particular, are being priced out of
opportunity.
In addition to antitrust enforcement, Congress must act,
and we should consider policy options like tuition free public
college, caps on tuition increases, increased need-based aid
reforms to the student loan system, and support for trade and
vocational schools. Not everyone needs to go to college.
If Republicans were serious about affordability, we would
see policy solutions. We don't see that. Instead, we see
culture wars. Let's talk about what they actually do.
Ms. Morgan, thank you for being here. Let me ask you a
simple yes or no question. Does gutting the Department of
Education lower tuition costs?
Dr. Morgan. It does not.
Mr. Garcia. Thank you. Does cutting research funding for
universities lower tuition costs?
Dr. Morgan. It does not.
Mr. Garcia. Does funding financial aid, does cutting
financial aid programs and student debt relief lower tuition
costs?
Dr. Morgan. It definitely does not.
Mr. Garcia. Does suppressing free speech and enforcing a
Trump approved ideology lower tuition costs?
Dr. Morgan. It does not.
Mr. Garcia. Thank you. As usual, Republicans are pretending
to be firefighters when they are actually arsonists. We need to
address the cost of higher education. Nothing in their cruel
Reconciliation Bill does that.
This hearing is just a hypocritical distraction.
Republicans fight culture wars, they manufacture outrage, and
funnel taxpayer dollars to billionaires and to ICE, while
defunding higher education, programs that help working class
students, those that I represent in Congress, and other vital
resources for our communities.
Working families and our communities deserve better. Thank
you, and I yield back.
Mr. Fitzgerald. The gentleman yields back. The gentleman
from North Carolina is now recognized for five minutes.
Mr. Harris. Thank you, Mr. Chair. Thank you to all of you
that are on the panel today for your testimony. I have been in
and out of other Committee meetings, but I did have the
privilege of reading your written testimoneys in advance.
I do want to just ask you a couple of questions. For
decades, elite universities were protected by the antitrust
exemption under the understanding that they were going to
provide this need blind financial aid, which they arguably are
not.
Mr. Martin, I want to go to you first. In your view, did
the exemption do anything meaningful to bring down colleges'
costs to make or make colleges expense more accessible?
Mr. Martin. I have not studied that Congressman. I am aware
of nothing.
Mr. Harris. OK. We really have seen what 30 years of
colluding about the financial aid formulas did to college
affordability and accessibility. The exemption expired in 2022.
So, my question again, Mr. Martin, would be to you, if we
want students to be offered the best college experience at the
lowest possible price, should Congress enact another antitrust
exemption like Section 568, or force the schools to compete
against one another?
Mr. Martin. As an antitrust lawyer, Congressman, the free
market is generally the best tool for solving problems of
prices.
Mr. Harris. Well, and I too, I believe that competition
would play a role in bringing down college costs. We have data
from the last 30 years that the antitrust exemption only
succeeded in making our elite institutions more elite and
further removed the needs of everyday Americans. Thank you.
Thank you for your response.
I want to go to Mr. Shieh. Mr. Shieh, you caused quite a
stir with your email to Brown's employees. Your efforts to
shine a light on Brown University's excess mirror our fight in
Congress to cut wasteful spending as we are dealing with it day
in and day out.
Can you, I want to give you a chance to explain your
motivation for shining a light on what you describe as
administrative bloat.
Mr. Shieh. Exactly. Well, I think the root of the problem
is that Brown is just so darn unaffordable for our students
across the country. That is why Brown has the richest median
income of all the Ivy League schools.
Like I said, half of the Brown student body is from the top
five percent of Americans. I just think that is wrong. I think
that is morally wrong, because the Ivy League is supposed to be
a ladder to the American dream.
We are pulling up the ladder so that only rich kids can
access it. I think that is wrong.
Mr. Harris. I noticed in your written testimony that you
pointed out there is roughly a ratio of one administrator for
every two students. I have got to ask you, is this necessary
for Brown students to obtain a degree?
Mr. Shieh. Certainly not. We have seen that in the past,
Brown didn't have this ratio, and it has functioned fine for
hundreds of years.
Across the pond, Oxford and Cambridge don't have that many
administrators and they function fine. Certainly, all these
administrators are not necessary.
Mr. Harris. I would say, does this number of administrators
meaningfully impact on the overall experience of Brown
students?
Mr. Shieh. Certainly not. They might even detract from it,
because when budget cuts need to be made, the enormous
administrative bloat means that, and their unwillingness to
reduce it means that the costs have to be cut somewhere else.
Mr. Harris. Right. So, which leads, you almost answered my
other question, is how could cutting some of the bloat benefit
the consumer that is looking to come to Brown?
Mr. Shieh. Well, absolutely. Like dorms flood, the food is
unappetizingly bad, and the quality just keeps getting worse.
They are reducing red meat from all the dining halls. They
say it is about the environment, but it is really about the
cost. By reducing administrative bloat, we definitely could see
some improvements in the student experience.
Mr. Harris. Thank you. Dr. Cooper, let me ask you, you said
in your written testimony that,
The surplus revenues that Ivy League institutions currently
enjoy fuel administrative bloat, but they could instead be used
to create more seats for qualified applicants.
Can you explain the benefits for our entire Nation that
could come from increased enrollment at these elite
institutions?
Mr. Cooper. Absolutely. Right now, if you look at elite
institutions' graduates, they are vastly over-represented in
the elites of business, politics, and media.
If we were to expand Ivy League undergraduate colleges to
more students that would enable more students to get their foot
in the door for this pipeline, and enable a greater diversity
of folks in those elite positions.
I would love to see Ivy League institutions use their
endowments and use all the money they are currently spending on
administration to expand and create opportunities for more of
those students.
Mr. Harris. Well, thank you. Thank you to all of you for
shining the light that you are shining today. Mr. Chair, with
that, I yield back.
Mr. Fitzgerald. The gentleman yields back. Without
objection, I ask unanimous consents to enter into the record
the following: A press release from the Department of Justice
titled, ``Consent Decree Settles Charge of Conspiracy to
Restrain Price Competition on Financial Aid Against Major
Universities.''
An article by Sahaj Sharda titled, ``How to Crush the Ivy
League Cartel.''
Finally, document Number 753-18, filed in the case of Henry
v. Brown University, on December 16, 2024.
Mr. Fitzgerald. We now recognize the gentleman from Georgia
for five minutes.
Mr. Johnson. Thank you, Mr. Chair. Let's be clear,
everybody, there is no 568 antitrust exemption thanks to the
Biden Administration.
As far as Mr. Shieh's testimony is concerned, it is, Brown
did not discipline Mr. Shieh, contrary to his report. Also, Mr.
Shieh's numbers in terms of administration staff for Brown
University are incorrect.
I am surprised that you would pull up the ladder for
students who are going to regular universities and colleges to
prevent them from getting financial aid. That is crazy.
At any rate, Donald Trump and his MAGA Republican
supporters in Congress are attacking our elite institutions of
higher learning, because these institutions and others produce
the critical thinkers who stand opposed to the global trend
toward authori-tarianism and dictatorship, which Donald Trump
and MAGA represent.
They say this hearing is about eight Ivy League
institutions and the cost of higher education, but that is just
a facade. This is really about Trump's war on facts, debate,
and truth.
This is Trump's attack on academia, which comes straight
out of the authoritarian playbook. Universities are full of
smart, young, engaged people, and the institutions are
committed to freedom of inquiry and diversity of thought.
Universities provide independent sources of information and
accountability. Indeed, individuals with higher levels of
education are less likely to be tricked by authoritarian
appeals.
Any autocrat or dictator who wants to exercise limitless,
arbitrary power, sees independent institutions of higher
education as a threat. After all, Donald Trump can't replace
our democracy with a dictatorial regime if the people are smart
enough to recognize that he is a threat to freedom, liberty,
and justice, which are democracy guarantees.
Dr. Morgan, I believe that academia and it is inextricably
tied to our democracy and to our liberty. Can you talk about
why higher education is important for the protection of freedom
and democracy?
Dr. Morgan. Absolutely. First, our institutions of higher
learning are places where people come together and learn, and
have to be in the same place as people with different opinions.
It really promotes democratic values from the start. To
your point, universities can also be a place of free inquiry
that can result in information that can oppose or point out
flaws in larger societal trends or political trends.
They can be really important voices in our societies. They
are also places that produce research that can help us better
understand what is happening in the world around us, including
what is happening, the kind of effects of the negative changes
that a Presidential administration might be putting in place.
They are incredibly important to our democracy and to our
society.
Mr. Johnson. Thank you. As a lawyer, I have watched with
horror as a number of law firms bent a knee and succumbed to
Donald Trump's unlawful pressure campaign.
I am proud of the brave firms that chose to stand up for
the rule of law. Now, as Trump goes after the universities, I
am equally concerned.
In March, Columbia University caved to Trump's demands when
the administration threatened to yank away $400 million in
Federal funding. Yet, more recently, Harvard is showing
backbone and rejecting Trump's demands.
Dr. Morgan, why is it important that universities stand up
against the administration's attacks and conversely, what would
happen if universities succumbed and started towing the line
for this administration?
Dr. Morgan. Yes. I think it is incredibly important that
universities follow the law, but do not submit to demands that
have nothing to do with their legal requirements.
You can see in the attacks on Harvard, and the kind of
proposed solutions from the Trump Administration that they are
looking to really control the minutia of the decisions at those
colleges. That is not an appropriate role for the Federal
Government to take.
The other thing that is important to understand here, is
that other universities are going to take their cues from what
these much better resourced institutions are able to do in
terms of standing up to the administration.
It is really important those universities that have the
resources to do so to take a stand.
Mr. Johnson. So, attacking elite institutions is a canary
in the coal mine.
Dr. Morgan. That is right.
Mr. Johnson. All institutions of higher learning are under
attack.
Dr. Morgan. That is right.
Mr. Johnson. Thank you. With that, I yield back.
Mr. Fitzgerald. The gentleman yields back. I now recognize
the Chair of the Full Committee, Mr. Jordan for five minutes.
Chair Jordan. Thank you, Mr. Chair. Mr. Shieh, what did you
say tuition was again at Brown, annual tuition?
Mr. Shieh. It is $93,064 in direct costs.
Chair Jordan. The $93,000 doesn't count the room and board,
books, and everything. That is just tuition, right?
Mr. Shieh. No. That is including room and board.
Chair Jordan. That is everything? OK, $93,000. How many
students do you say again, was at Brown, over 7,000 you said?
Mr. Shieh. Seven thousand.
Chair Jordan. Yes. That is a lot of money coming in. It
could be some grants; it could be some loans or whatever.
The $93,000 7, it is like $700 million coming
into Brown every year. You asked the fundamental question, sort
of a simple question. You asked the question, where the heck is
all the money going, right?
You said, ``Maybe I will check the administrators. How many
administrators are they having?'' You said, I think the number
you said was 3,805, is that right?
Mr. Shieh. Yes.
Chair Jordan. Then, you sent a letter to these guys asking
another fundamental question, what do you do all day?
What was the response you said? Most of them didn't get
back with you?
Mr. Shieh. Most of them didn't respond. We were hit with
disciplinary charges.
Chair Jordan. The administrators couldn't respond to a
simple question, you are taking in $700 million a year. What
the heck are you 3,800 administrators doing every day?
The administrators didn't respond, but the administration
came after you. Is that right?
Mr. Shieh. That is right. When you investigate the
administration, it turns out they investigated you back.
Chair Jordan. Yes. It was interesting to me, because the
Ranking Member of the Full Committee and the Ranking Member of
the Subcommittee talked about academic freedom and the First
Amendment.
You were asking these questions on behalf of a student news
publication, right?
Mr. Shieh. Right.
Chair Jordan. Was it Brown, what is the name of your paper,
The Brown Spectator?
Mr. Shieh. Yes.
Chair Jordan. They come after you. Why do you think they
did that? Why did they come after--well, first, what did they
come after you about? What did you allegedly do wrong?
Mr. Shieh. Well, first it was emotional and psychological
harm, invasion of privacy, and misrepresentation. Then, they
decided to charge me with violating the technology policy.
Chair Jordan. You are asking someone how they spend your
money is emotional harm? That is what they alleged?
Mr. Shieh. Apparently.
Chair Jordan. Then, what happened in the investigation?
Mr. Shieh. Well, then they escalated it. They then charged
the entire Board of Directors of The Brown Spectator for
violating Brown's trademark, because our publication is named
The Brown Spectator, which is just a completely bogus claim.
Chair Jordan. Are there other newspapers at Brown that use
Brown in the name of their paper?
Mr. Shieh. Yes. Our other newspaper is the Brown Daily
Herald.
Chair Jordan. Probably in the entire history of the
university, there has been some kind of Brown publication,
right?
Mr. Shieh. Certainly.
Chair Jordan. Yes. That is just ridiculous. Why do you
really think they did it? Why did they really come after you?
Mr. Shieh. I think that they were upset that we unveiled
the rot that was going on, all these administrators with pretty
useless jobs.
Chair Jordan. That is certainly one reason they were mad at
you. It is probably more, I think they were trying to make sure
no one else would do it in the future.
Mr. Shieh. Yes.
Chair Jordan. That is always the way it works. The Left
comes after people, they want to chill speech so it doesn't
happen again. Do you think that was part of their motivation?
Mr. Shieh. I think that certainly was true. It backfired
terribly.
Chair Jordan. It sure did. It sure did, because you are
brave enough to keep talking. You can come here and testify.
So, God bless you for doing that.
Now, you can have, I will direct this to you, Mr. Martin,
you can have a bloated bureaucracy when you are colluding on
price and making sure you are not competing on price with other
similarly situated institutions.
Is that right, Mr. Martin?
Mr. Martin. Yes.
Chair Jordan. You are not supposed to do that, are you,
according to the law? Is that right Mr. Martin?
Mr. Martin. To collude on price? It is per se unlawful.
Chair Jordan. It is per se unlawful. You can also have
bloated bureaucracy when you collude on price and you limit
output, you limit class size.
Is that right, Mr. Martin?
Mr. Martin. That is correct.
Chair Jordan. Do you think that is going on at these--oh,
there is a third one.
You can also do all this if you engage in perfect price
discrimination, where you get all this information on the
student and their families, what they make, where it goes, what
they owe, what their retirement is, all this information, and
you can say that student can pay this amount and you will take
it right to the edge where they can pay and get perfect price
discrimination.
So, when you do those three things, you can afford to have
3,805 administrators for 7,000 students. Is that right Mr.
Martin?
Mr. Martin. You make an excellent point. The more perfect
the information, the more perfect the collusion can be,
algorithmically or otherwise.
Chair Jordan. Of course, That is exactly what is going on.
Is that right, Dr. Cooper?
Mr. Cooper. The evidence is certainly consistent with that,
yes.
Chair Jordan. That is what the evidence shows. Yet, the
other side says, oh, how dare Mr. Fitzgerald have this hearing.
You got to be kidding me.
They tried to chill the speech of a news publication at the
university, for a student they are supposed to be serving,
asking a simple and fundamental question. They want to chill
that because they don't want anyone to look under the covers
and see that they are colluding on price, they are limiting
output, and they are doing perfect price discrimination.
Imagine that. Imagine that. We are not supposed to have a
hearing. Holy cow. I want to thank the Chair for doing the
hearing.
I want to thank all of you for testifying. Mr. Shieh, thank
you for stepping forward and letting the country know what is
going on at these elite universities.
Mr. Raskin. Would the gentleman yield for a quick question?
Chair Jordan. I yield back to the Chair. I will yield. You
have got a few.
Mr. Raskin. Well, I just wonder if your feelings are the
same about the attacks on a private student publication called
the Harvard Law Review taking place by the Trump Administration
right now?
Chair Jordan. Well, I think the Chair--or the Ranking
Member knows that you and I have been strong defenders of the
press. We have co-sponsored together the PRESS Act, defending
the press. I will continue to do that.
Mr. Raskin. Very good.
Chair Jordan. I am focused on the situation in front of us
today and Mr. Shieh at Brown University.
Mr. Raskin. I am with you. Hold the thought. More power to
the free press at Brown and at Harvard.
Chair Jordan. God bless America.
Mr. Fitzgerald. The gentleman's time has expired. That
concludes today's hearing. We want to thank our witnesses.
Mr. Nadler. Mr. Chair, I have a unanimous consent request.
Mr. Fitzgerald. Mr. Nadler has a UC request.
Mr. Nadler. Thank you, Mr. Chair. I ask for unanimous
consent to enter into the record an article entitled, ``Ivy
League School's Financial Aid,'' from the Ivy Coach Daily. It
says, moreover, while the sticker price at the Ivy League
schools is high, about $90,000 per year, roughly half of the
students receive financial aid with average awards covering
two-thirds or more of the cost.
The vast majority of students from Ivy League schools
graduate with no loans. Half of the Ivy League schools offer a
completely free education to families whose income is $75,000
or less.
Mr. Fitzgerald. That is the title or the whole article?
Mr. Nadler. That is the whole article.
Mr. Fitzgerald. Yes. Without objection.
Mr. Nadler. I have a second unanimous consent request that
is shorter. I ask unanimous consent to enter into the record
and article from Chicago Booth Review titled, ``Who's at Fault
For Student Loan Defaults,'' that argues that this article
reviews, researches, and analyzes student loan defaults and
finds that for-profit colleges, half of the student loan
defaults are from programs that only enroll 10 percent of U.S.
students. Furthermore, the review argues that default rates are
not being driven by tuition costs.
Mr. Fitzgerald. Without objection.
Mr. Nadler. Thank you.
Mr. Fitzgerald. That concludes today's hearing. I want to
thank the witnesses for appearing before the Committee today.
Without objection, all the Members will have five
legislative days to submit additional written questions for the
witnesses and additional materials for the record. Without
objection, the hearing is adjourned.
[Whereupon, at 11:58 a.m., the Subcommittee was adjourned.]
All materials submitted for the record by Members of the
Subcommittee on the Administrative State, Regulatory Reform,
and Antitrust can be found at: https://docs.house.gov/
Committee/
Calendar/ByEvent.aspx?EventID=118342.
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