Antitrust Law Daily College recruitment organization required to change rules on how members conduct admissions process
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Thursday, December 12, 2019

College recruitment organization required to change rules on how members conduct admissions process

By Jeffrey May, J.D.

Antitrust Division settlement with National Association for College Admission Counseling intended to promote vigorous competition among colleges for student enrollment.

The National Association for College Admission Counseling (NACAC) has agreed to settle Department of Justice Antitrust Division charges that it established and enforced illegal restraints on the ways that colleges compete in the recruiting of students. The Antitrust Division filed a complaint in the federal district court in Washington, D.C., alleging that certain association rules restrained competition between colleges and universities for the recruitment of first-year and transfer students. Under the terms of a proposed consent decree, NACAC has agreed to abolish three rules from its Code of Ethics and Professional Practices (CEPP), which broadly regulates how its college members conduct their admissions process (U.S. v. National Association for College Admission Counseling, Case 1:19-cv-03706).

Membership in the NACAC is conditioned on adherence to the CEPP. The Justice Department took issue with three of the CEPP's rules: (1) the "Early Decision Incentives Rule," which restrained any person from offering incentives to students applying under an Early Decision application plan that are not available to students applying under a different application plan; (2) the "First-Year Undergraduate Recruiting Rule," which restrained any schools from recruiting or offering enrollment incentives to first-year college applicants on the basis that (a) a particular date passed; (b) the applicants had either declined admission or not affirmatively indicated that they are still interested in attending that institution; or (c) the applicants had already enrolled in, registered at, declared their intent to enroll in or register at, or submitted contractual deposits to other institutions; and (3) the "Transfer Student Recruiting Rule," which restrained any person from recruiting or offering enrollment incentives to transfer students. The government alleged that these recruiting rules, which were horizontal agreements among the schools participating in NACAC, denied American college applicants and potential transfer students access to competitive financial aid packages and benefits and restricted their opportunities to move between colleges.

Under the terms of the proposed consent decree, the NACAC is required to remove these rules. In fact, NACAC members voted to voluntarily remove the rules at their Annual Meeting in September while the two-year investigation was still pending. The consent decree also would require the association to appoint an antitrust compliance officer among other compliance obligations.

NACAC comment on settlement. The NACAC released a statement today acknowledging the settlement. The group said that it agreed to end the rules, despite its belief that "the code of ethics provisions in question best served the interests of students transitioning to college." The NACAC went on to say that it "will further examine its code of ethics in the coming year to determine how it can best continue to serve the interests of students to fulfill its mission."

Attorneys: Ryan S. Struve for U.S. Department of Justice.

Companies: National Association for College Admission Counseling

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