▶ 0:19:19Objection. The chair is authorized to declare recess at any time. Uh we welcome everyone to today's hearing on collusion and higher education. Without objection, I ask unanimous consent for Mr. nails to be permitted to participate in this hearing to question the witnesses if a member yields him time for that purpose of which I will yield him five minutes. Um I'll now uh recognize myself for an opening statement.
▶ 0:19:49According to the National Center for Education Statistics, US colleges and universities are 700 dollar 700 billion industry. Harvard endowment alone which stood north of 50 billion as of 2023 is larger than the GDP of 120 nations. Six of the eight Ivy League schools have endowments exceeding billion.
▶ 0:20:15Ivy League schools should be competing to offer the best product at the best price possible. Instead, they collude to raise prices and spend their inflated cartel earnings on bloat.
▶ 0:20:29According 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% and respectively continues to go higher. Today, the cost to attend an Ivy League school can exceed $100,000 per school year.
▶ 0:20:55Ever 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.
▶ 0:21:20Not only has tuition skyrocketed, but these schools are also deliberately keeping class sizes small to maintain exclusivity and inflate their perceived prestige. Between 1978 and 2023, while the US population grew by just 50% and the number of applicants increased by 450%, Harvard reduced its class sizes by seats.
▶ 0:21:47Across 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 cost.
▶ 0:22:18In 1958, MIT and the eight Ivy League schools formed what is widely known as the quote 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.
▶ 0:22:41In 1989, the Department of Justice began investigating these practices and ultimately filed an antirust lawsuit. By 1993, all nine schools had settled. In response, Congress adopted section 568 of the Improving America's Schools Act 1994, granting colleges an antirust exemption, provided they did not consider a student's ability to pay while making admissions decisions.
▶ 0:23:10In 1999, elite schools formed a new cartel, the 568 President's 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.
▶ 0:23:33In 2022, former students sued many of the Ivy League schools for colluding on financial aid formulas that favored 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.
▶ 0:23:54She said, quote, "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.
▶ 0:24:19The CSS profile gives these schools access to sensitive information including family home ownership, savings and 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.
▶ 0:24:39Despite valuing their degrees at $400,000, having multi-billion dollar endowments and receiving billions more in taxpayer funding, these schools don't prioritize accessibility or quality of education. They prioritize profit and And even though the Ivy League schools no longer have an antirust exemption to coordinate on pricing, tuition continues to skyrocket.
▶ 0:25:07By 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 anti-competitive practices may harm students, taxpayers, and ultimately our country's future. I want to thank the witnesses again for appearing before us today, and I look forward to your input.
▶ 0:25:35I will now recognize the ranking member, Mr. Nadler, for his opening statement. Mr. Chairman, before before I start my opening statement, let me uh mention a personal stake in this. Uh I am the first member of my family to go to college. We didn't have much money.
▶ 0:25:58My father worked on a gas station and I was offered full scholarships by two Ivy League colleges, Yale and Colombia. I chose Colombia and I never had to pay a scent. Mr.
▶ 0:26:13Chairman, 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 Let's be clear. The cost of tuition at many colleges and universities, not just Ivy League institutions, is too high and is unaffordable for too many families.
▶ 0:26:39But 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.
▶ 0:27:09They would not make cuts to Pell grants that would reduce or eliminate access for up to 4 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.
▶ 0:27:31And they would not include devastating cuts to Medicaid, which will deprive roughly 3.4 million low-income students of much needed health care. But Republicans showed us very clearly that their priority is tax cuts for billionaires, not affordable higher education. So it is a little difficult to take their concerns seriously today.
▶ 0:27:53This hearing also comes in the context of the Trump administration's allout assault on education and research at colleges and universities across the country and particularly at Ivy League and other elite universities. The administration has 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.
▶ 0:28:22At 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 look to bring their brains and talents elsewhere. But this attack on higher education has an even more sinister purpose. Its real target is academic freedom.
▶ 0:28:47Taking a page from the authoritarian playbook, the Trump administration is using every tool at its disposal in a pressure campaign to impose its ideology on independent academic institutions and to bend them into submission. And unfortunately, they have a willing partner in the Republicans on the judiciary committee.
▶ 0:29:09Instead 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 debet President Trump's ideological war against a 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.
▶ 0:29:35That amounts to a focus upon less than 1 half of 1% 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 antirust theory so that they can bully their political targets. Sadly, this follows a familiar pattern.
▶ 0:30:00Last 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.
▶ 0:30:16When 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 the flawed antitrust theory to justify a campaign to threaten and intimidate them into abandoning abandoning their efforts at responsible advertising.
▶ 0:30:37When 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 antirust investigation. And now today, they return to the same tired playbook, using the power of this committee to support the Trump administration's efforts to target educ academic institutions.
▶ 0:31:02After having launched an overroad fishing expedition against Ivy League universities, they're 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.
▶ 0:31:19If 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.
▶ 0:31:42Unfortunately, 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.
▶ 0:32:11I look forward to hearing from them and I yield back the balance of my time. Gentleman yields back. I now recognize chairman of the full committee, Mr. Jordan, for his opening. Thank you, Mr. Chairman. So, first they set the same general price. Then second, they demand large amounts of information from the student and their family for each student. Then they squeeze every dime they can out of that family for tuition. And then third, they limit class size. So they agree on price, they perfect price discriminate, and they limit output.
▶ 0:32:42That's about as anti-competitive behavior as you can get. And then with this windfall of money they get, perfect price discrimination, collusion on the price, limiting the class size at the at the institution. There's a windfall of money they get from students and their families and the government, the taxpayers. They hire an unbelievable amount of administrators. Mr. Sheay has pointed that out. Such a deal. Such a deal for taxpayers and families. That's what's going on.
▶ 0:33:11And thank goodness the chairman's having a hearing on this. It's 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, anti-semitic behavior. I mean, not to mention all that. That's what's going on. And the ranking member of the subcommittee says, "We're wasting our time. You've got to be kidding me. the taxpayers appreciate that their tax money actually is used in the right way, not like it's being used at these institutions. So again, I want to thank the chairman for this hearing.
▶ 0:33:41I look forward to our witnesses and thank them for being present today and testifying. With that, I yield back. Gentlemen yields back. I now recognize the ranking member of the full committee, Mr. Rasin, for his opening statement. Thank you very much, Mr. Chairman. Thanks to our witnesses for joining us today. Uh, 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.
▶ 0:34:08Another class war tax scam that will not only throw 14 million Americans off of their Medicaid, but increase the national debt by $3 In case our friends missed it, Elon Musk, who you've 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.
▶ 0:34:33So, I was pleasantly surprised to see we were going to have a hearing on antitrust because there used to be Republicans like progressive trustbuster Teddy Roosevelt who actually believed in protecting the American people against price fixing conspiracies, monopoly, and runaway corporate power. I thought perhaps, Mr.
▶ 0:34:49chairman, we could get together to protect our personal data, to investigate uh 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.
▶ 0:35:12Like 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. And I don't even know why Donald Trump's so mad at Harvard.
▶ 0:35:38They 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's our new ambassador to France, for his multiple convictions for tax evasion and witness tampering. Now, that would be a worthwhile hearing, Mr. chairman. How wealthy people like the Kushners and the Trumps buy their way in to America's elite institutions, as Donald Trump calls them.
▶ 0:36:06But antirust 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'll accuse you of violating antitrust.
▶ 0:36:30We'll probably be having a hearing on how Elon Musk is now violating antirust since he's turned against Donald Trump and their appalling bill. So today they're accusing eight universities who represent less than 1/ half of 1% 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.
▶ 0:37:00And of course no antitrust scholars took it seriously and even their own Department of Justice didn't do anything with it. They control the antitrust division again. Why do they need another hearing in this committee? Why don't they just bring their case if there's a case? They've got the power. That's what they've 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 Victor Orban in Hungary.
▶ 0:37:30This 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 disscent from forming against the autocrat in 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.
▶ 0:37:59Vance 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 a hundred times and never forget it. 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.
▶ 0:38:21They must be quote in sync with the administration and what the administration is trying to accomplish." That's a federal government takeover of every private and public university and college in America. Now, Harvard has stood up to the administration's uh attempted hostile takeover, rejecting its blatantly unconstitutional demands to control its governance, its curriculum, and the ideology of its faculty and students.
▶ 0:38:47In 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 leftwing rogue Democrat judges, but Republican judges, too, for violating the university's First Amendment rights. We've got academic freedom in America under the First Amendment.
▶ 0:39:12And now the Trump administration ridiculously threatens to come after the university's taxexempt status. They want to revoke Harvard's taxexempt status. Um, and they've asked all federal agencies to cancel all of the contracts they have with Harvard to get the work of the American people done, contracted work. But Trump is losing in court every day. And Harvard is winning as it stands up for academic freedom and its right to make scientific and academic progress.
▶ 0:39:41and hundreds of colleges and universities across the country are standing with Harvard. DHS head Christy Nman has said that its 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 have been hit hard at smaller schools. Researchers are going to lose their jobs. Labs will close and important work will go undone.
▶ 0:40:12Our Republican colleagues have no interest in making higher ed more accessible and more affordable. In their big, beautiful bill, they're 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 PEL eligibility, the end to subsidized loans, and a host of other destructive changes that will push college way out of reach for hundreds of thousands of Americans.
▶ 0:40:40The administration also proposed nearly an 80% 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 this is breathtaking duplicity to claim that the Ivy League schools are conspiring against their students to make tuition unaffordable when House Republicans are complicit in the largest setback in access to higher education for workingclass Americans in decades.
▶ 0:41:09not content to undermine American students through these direct cuts to education. They're also proposing cutting $880 billion dollars from Medicaid and $300 billion from SNAP, the nation's primary anti-hunger program. Do you know what happens to millions of low-income students who don't have health care and don't have enough food to eat. Most of them are going to drop out of school. Today's hearing just regurgitates the mega agenda.
▶ 0:41:36persecute 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's got nothing to do with antirust law. I yield back. Gentleman yields back. Without objection, all other opening statements will be included in the record. We'll now introduce today's witnesses. Dr. Preston Cooper. Dr.
▶ 0:42:04Cooper 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 R research. Next, Mr. Alex Sheay. Mr.
▶ 0:42:33Shay is a rising junior at Brown University where he studies computer science and economics. He's also a journalist uh serving as a contributing opinion writer for the Boston Globe and as the publisher of the Brown Spectator. Mr. Scott Martin. Mr. Martin is a partner and co-chair of the antitrust practice group, excuse me, at Haltzfield LLP.
▶ 0:42:59He has spent more than 25 years in civil litigation and his practice specializes in pricing, distribution, and other competition issues. Uh, Miss Julie Margaretta Morgan. Miss Morgan is the president of the Century Foundation, a progressive think tank. She previously served as the associated director of research, monitoring, and regulations at the Consumer Financial Protection Bureau. Uh we welcome our witnesses and thank them for appearing today.
▶ 0:43:29We will begin by swearing you in. Would you please rise and raise your right hand? Do you swear 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. Yes, you do. Let the record reflect that the witnesses have answered in the affirmative.
▶ 0:43:57Thank you and 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. And Dr. Cooper, you may Good morning, Chairman Fitzgerald, Chairman Jordan, Ranking Member Rascin, and Ranking Member Nadler, and distinguished members of the subcommittee.
▶ 0:44:23Thank you for the opportunity to testify today on the enrollment 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 anti-competitive behavior. Most Ivy League institutions severely limit undergraduate admissions, turning away thousands of qualified applicants.
▶ 0:44:48The 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 antirust law, provided they admitted students on a need-blind basis.
▶ 0:45:14In 2022, a group of students filed a class action lawsuit against 17 elite universities, including several Ivy's, alleging that admissions are not actually needlind. Most of these schools eventually settled the lawsuit for a collective $320 million. Another law lawsuit was filed in 2024 alleging that elite universities have continued to coordinate their pricing decisions even after the antitrust exemption expired.
▶ 0:45:39My 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. But the enrollment pricing and spending practices of the Ivy League raise some red flags. Classic cartels limit supply in order to drive up prices and profits. And 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 2200 students to join the class of 1982.
▶ 0:46:10Due to population increases and higher rates of overall college attendance, one might expect that number to grow. Instead, Harvard admitted just over 1900 students to join its class of 2028. Unlike most other private colleges, Ivy League universities have mostly not increased admissions to match rising demand. Instead, the schools have opted to become more selective with the average Ivy League admissions rate falling from 15% in 2002 to just 5% in 2022.
▶ 0:46:39As student demand rises, but Ivy League institutions keep admissions relatively flat, the obvious result is upward pressure on prices. The annual price of tuition and fees at Ivy League universities ranged between $59,000 and $69,000 in the previous academic year. That's between 56% and 82% higher than the average for private colleges. Ivy League students are also less likely to receive financial aid.
▶ 0:47:04While 84% of students at nonivvy colleges uh enjoy a discount off the sticker price, the share of Ivy League students receiving institutional financial aid is just 52%. 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.
▶ 0:47:27Ivy 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 non-instructional staffer for every two students compared to one staffer for every six students at other private colleges. All of this matters because Ivy League institutions have an outsiz impact on the future of America.
▶ 0:47:56Ivy League graduates are vastly over represented among elites in business, politics, and media. A group of institutions which limits enrollment and charges excessive prices denies opportunity to thousands of students, particularly middle-class students with strong academic qualifications who f 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.
▶ 0:48:26The market for elite education bears many of the telltale signs of anti-competitive 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, and I look forward to your questions. Thank you, Dr. Cooper. We'll now recognize Mr. Martin for five minutes. Thank you, Chairman Jordan. Ranking me.
▶ 0:48:54Thank you, Chairman Jordan, Ranking Member Rascin, Chair Fitzgerald, Ranking Member Nadler, and distinguished members of the subcommittee. I thank you for extending an invitation to testify today. My name is Scott Martin. I'm an attorney whose work is 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'm also an author and co-editor of multi-olume antitrust treatise.
▶ 0:49:24I 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 and a competitive acts undertaken by a single actor with market power and concerted conduct, particularly when the latter involves direct or horizontal competitors.
▶ 0:49:49Most 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 United States Supreme Court has labeled the supreme evil of antirust. In testifying today, I make no prejudgment about any current conduct, nor has my law firm represented a party in the cases I'll discuss.
▶ 0:50:12Indeed, the hope of antitrust lawyers is always that free markets are operating properly and that unlawful conduct is not interfering with that. But there are several reasons here for heightened vigilance to protect and encourage robust competition in higher education.
▶ 0:50:28First, 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 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 sevenfold. Meanwhile, output in terms of class size has not kept pace with population growth. This is true despite increased demand and increasing multi-billion dollar endowments.
▶ 0:50:59Common sense 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, in a belief of which I am not questioning the sincerity that they are engaged in noble work of the advancement of knowledge may create an atmosphere suggesting that relaxation of rules of competition would be appropriate for this industry. Not so.
▶ 0:51:26Most legal scholars will tell you not only that antitrust exemptions are rare and rightly so, but also that special sectoral rules and regulation have at best a mixed track record in our nation. In a different higher education context, my law firm brought the Oannon case that challenged NC2A restraints on college athletes. That marketplace has flourished and the sky has not fallen.
▶ 0:51:50And 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.
▶ 0:52:17And 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 and college for college bookstore sales and local housing.
▶ 0:52:40The 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. And perhaps most pertinent to the subcommittee here, in 1989, as you've 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 cost of attendance for purposes of collectively determining financial assistance offered to commonly admitted students.
▶ 0:53:11That case resulted in a 10-year consent decree in 1991 under which those universities committed not to agree on student financial aid. and sub subsequently to the congressional passage of the so-called 568 exemption permitting colleges to formulate common approaches to awarding financial aid provided they strictly adhered to need-b blind admissions 568 exemption expired on September 3022 and was not renewed.
▶ 0:53:39However, as you know, current and former college students allege in a class action filed in 2022 that members of the 568 president's 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. Thank you, Mr. Mr. Martin, Mr.
▶ 0:54:10Sheay, you may Chairman Fitzgerald, Ranking Member Nadler, Chairman Jordan, uh, Ranking Member Rascin, thank you for inviting me to appear before you today. My name is Alex Sheay and I'm a rising junior at Brown University, one of the most exclusive institutions in the world. But I'm not here to glorify the Ivy League. I'm here to warn you that the promise of American higher education of opportunity through meritocracy is under attack. I'm a legacy student at Brown.
▶ 0:54:40I went to a prep school that feeds to the Ivy League. And my parents are doctors who can afford the $93,000 a year sticker price. In other words, I'm exactly who the Ivy League was built for. But 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's the American dream. But today, that dream is now a good.
▶ 0:55:08According to the New York Times, at Brown, the median students family makes over $200,000 a year. Half the student body comes from the top 5% of earners. And research by Brown's own professor, John Freriedman, shows that even equally qualified low-income students are vastly underrepresented. At this very moment, the American people are tightening their belts, and Brown is raising tuition to beyond $90,000 a year.
▶ 0:55:32And even while charging students the price of a luxury car, Brown is on track to run a $46 million deficit this year. Where's all the money going? I'll tell you where it's going. It's going into an empire of administrative bloat and bureaucracy. Brown employs 3,85 full-time non-instructional staff for just 7,229 undergrads. That's one administrator for every two students. This isn't education.
▶ 0:55:57This 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 Paxton. And when budget cuts are made, these expenses stay while the student experience deteriorates. My dorm floods when it rains, and the burger patties in our dining hall have been replaced by an unappetizing beef mushroom blend.
▶ 0:56:25The idea that Brown's administration can be streamlined isn't conjecture. We didn't used to have these many administrators. Across the nation, the number of university administrators has risen by 162% in recent decades. And it's no coincidence that correspondingly, the cost of education has risen 181% in inflationadjusted dollars since the '90s. 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.
▶ 0:56:53The 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% of demonstrated need. But 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.
▶ 0:57:19And 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 aid offers. I'm a reporter for the Brown Spectator and to document this problem, I created a website called Bloat at Brown that used AI to assess 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.
▶ 0:57:49Our website was hacked. And associate dean Kirstston Wolf 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. But we refused to back down and we won our hearings. There was no misconduct, only exposure. And that's what Brown feared the most.
▶ 0:58:12This 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 Paxton, 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.
▶ 0:58:35It belongs to the kid in rural Kansas with a 4.0 no GPA, the firstgen 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. Thank you, Mr. Sheay. Dr. Morgan, you may begin. Good morning, Chairman Fitzgerald, Ranking Member Nadler, and members of the subcommittee. Thank you for the opportunity to testify at this hearing.
▶ 0:59:04The rising cost of college beyond high school in this country is a major concern for many American families. Whether they're looking at an associates 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, and most families are forced to cope by taking on student loan debt that becomes a lifelong burden. I applaud the committee's interest in the cost of higher education. However, the focus of this inquiry is misplaced.
▶ 0:59:33Ivy League institutions train less than 0.4% of undergraduate students in this country, whereas the vast majority of students attend public community colleges and open access state 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 hay stack while the rest of the hay stack is on fire. And here's the latest source of that fire.
▶ 0:59:58Legislation approved by the House of Representatives pays for tax cuts for the richest Americans by increasing the price of college for low and middle inome students, including taking away PEL grants from 1.4 million Americans and reducing them for another 3 million. The deep cuts to Medicaid and SNAP in that bill will also likely increase public school tuition by squeezing state budgets as higher education will be at the top of the chopping block to cover state budget shortfalls.
▶ 1:00:25Antitrust at elite colleges is deeply inadequate for solving the problem of high prices of 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 lower and middle inome 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 jur this committee's jurisdiction.
▶ 1:00:56For 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's strong bipartisan precedent for this in Medicare, where the federal government assigns payment rates to health care services provided to Medicare beneficiaries. And while Ivy League practices don't trickle down to open access schools, the predatory practices of for-profit colleges are definitely trickling up.
▶ 1:01:23Community 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. Lastly, 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.
▶ 1:01:50Instead of simply enforcing the law, federal officials are openly looking for any punitive measure 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 this obsession with the Ivys.
▶ 1:02:05But I think this line 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 Yels of the world as finishing schools for the children of wealthy and well-connected rather than knowledge centers that can freely evaluate and challenge social and political trends. This attack on Ivy League schools has worrisome parallels to the actions of an authoritarian regime.
▶ 1:02:28And regardless of our views on elite higher education, it should be of concern because it's a sharp departure from the from the law and from the 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 of our communities needs. Thank you, and I look forward to your questions. Gentlewoman yields back. Mr. Chairman, gentleman's recognized. have the unanimous consent request.
▶ 1:02:58Without objection, Mr. Chairman, uh I ask unanimous consent to uh enter uh China really wants to attract the talented scientists Trump just helped uh from today's New York Times. Without objection. Thank you. I yield back. Uh thank you, Dr. Morgan. Now proceed under the five-minute rule with questions. And the gentleman from California is recognized. Mr. Isa, thank you. Uh Dr.
▶ 1:03:24Morgan, uh, you went to Boston College, also known as one of the new Ivy's, I did go to Boston College for law school. I have no idea whether it's called a new Ivy. Um, Google says it is, and who else can we ask? Uh, the uh uh bottom line is undergraduate is now over $67,000, over $88,000 all inclusive. Um, is that one of the elite schools that you would be referring to beyond the original eight Ivy Leagues?
▶ 1:03:55Absolutely. I do think that colleges like And let me ask you a question since you made such a point that Boston College or that other colleges the the G the basic eight and we'll just add the new IVs that charge similar amounts they should be exempt from antitrust because they have a small market share and cater to the ultra My testimony offers no opinion.
▶ 1:04:17No, you you you made a point as an antitrust point that they because they had such a small market share, they had little or no effect. I'm sorry. Can can I answer the question? No, I want you to answer that question. Okay. So, the point I'm making about the I don't want to know the point you're making. You can say yes or no. Did you say that? Can you restate the question, please? What did I say? You said, and I'll paraphrase. Thank you very much.
▶ 1:04:46you said that uh that you know that we shouldn't be concentrating on them because they had such a small market share. Is market share a a factor in antitrust activity of multiple companies working together in collusion? I believe we should be focusing on now. Thank you for not answering that. You make it easy on me. Doctor uh Mr.
▶ 1:05:07Barton is collusion even without large market share if it's if it makes prices unreasonably high if it has an effect is that antitrust behavior it's per se unlawful okay so you have per se unlawful behavior uh alleged and yet the Democrats 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
▶ 1:05:38raising their prices. Uh Mr. Sheay, you're uh you you described yourself as uh sort of part of the uh the wealthy and entitled. Um which is unusual in this body for anyone. Everyone else seems to want to be herocial Albert. Uh but uh your family was able to pay what needed to be paid at a Ivy League school. Correct. Right. And most Americans can't afford this though. $93,000 a year.
▶ 1:06:07That's like 150% of the median American income. Okay. And the evidence that's 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 uh of overhead, if you will, inefficient overhead by administrators. Absolutely.
▶ 1:06:37Administrative overhead is growing not just at the Ivy League, but at state universities all across the country. It's risen dramatically in recent years. And 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 a hallmark when you give uh antitrust exemption? That's correct. We often see higher prices and higher profits.
▶ 1:07:05So 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 the efficiency, we could in fact allow more people to be able to leave college without burdensome I think that's correct. Uh we need more competition in higher education. Okay.
▶ 1:07:34So today's hearing is really about antitrust behavior by the most esteemed university. And Mr. Chay, I'm going to ask you a question. Is it your understanding as a rising junior, if I'm 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?
▶ 1:07:57this is empirically true is that if going to an Ivy League school can definitely raise your uh potential earnings especially um if you're from a low-income family. So Mr. Martin the tendency by the universities that will deliver you 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 the real detriments of this antitrust behavior?
▶ 1:08:26It it should trouble us as antitrust lawyers. Thank you. I yield back. Gentleman yields back. Now recognize the ranking member for five Thank you, Mr. Chairman. Dr. Morgan, before I begin my questions, can you uh please say your answer to Mr. Ice's question on market size? Yes. I believe that market size is relevant here to the question of where we should be focusing our attention.
▶ 1:08:50The vast majority of students in America do not attend Ivy League colleges and they don't attend colleges whose um 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 budgets. Thank you.
▶ 1:09:15For many, college is a good investment that ensures greater earnings over lifetime and an opening to the middle class. However, the cost of tuition at many schools is too high, closing the door to families who cannot afford the higher 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 programs.
▶ 1:09:44The 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? The Republican budget is going to have drastic negative impacts on the cost of higher education for most students in this country.
▶ 1:10:08As I said in my testimony, it's going to cut PEL grants for millions of students, making them foot the bill for more of college. It's going to make student loans more expensive to repay on the back end. It caps the the amount of federal student loans that people can take on, but the amount not the amount of tuition, meaning that more people are going to have to take on private student loans to cover that gap. And how does higher education support the country and our economy generally?
▶ 1:10:36Higher education is incredibly important to our economy and it serves a number of purposes. Number one, those open access schools and community colleges that I referred to are educating people to become doctor sorry to become nurses, nurse practitioners, HVAC repair people, electricians, you know, the people who serve our communities every day and make our economy robust.
▶ 1:10:57But our educational institutions also provide funding for or um 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. 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?
▶ 1:11:27I think we're all going to feel the impacts of these cuts for a long time. We're not going to be developing the drugs that make us safer and healthier in this country. We're not going to be developing the innovations that help keep us competitive and power manufacturing within our country. Um, so it's going to have a really big impact on on us as a whole.
▶ 1:11:46I also think that it's going to move more innovation to the private sector, which means that we're really only going to be developing the innovations that are profitable and not necessarily the ones that are best for for the public as a whole. And most of our drugs are are not initially profitable without federal uh research. Uh Dr. Morgan, the United States has been the beneficiary of foreign students coming here, being educated here, the best and the brightest, and staying here.
▶ 1:12:16Uh it's one of the reasons for scientific uh supremacy. Uh what is the effect of the Trump administration's hostility to foreign students and denials of visas and even revocations of visas? What will be the effect on on our economy and on our uh scientific supremacy? Yes, I think that first of all, 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.
▶ 1:12:45So, this is really part of an effort to kind of turn the screws in any place that the administration can to bring colleges around to a set of What would be the result? Oh, sure. So um I think the result of this these um of uh this change to um to admission for international students is going to have an effect on our country's ability to bring in minds from all across the world and benefit from their academic excellence um to provide um you know
▶ 1:13:15an opportunity for those st students to take part in our democracy and learn our values. In short, it promises to shift uh scientific primacy from the United States to China. Would you agree with that? I totally agree with that. Thank you. I yield back. Gentleman yields back. We now recognize a gentleman from Washington for five minutes. Well, uh thank you, Mr. Chair, for holding this important hearing.
▶ 1:13:38Uh there is zero doubt that the uh Ivy League institutions behave in a uh anti-competitive manner. Uh in fact uh if you look at their pricing and value and marketing model, it looks very similar uh to some famous jewel companies and how they control uh the supply of diamonds and inflate what is a commodity uh into a precious item in of of limited scarcity. Uh but I do believe that American higher education is a gem of American society.
▶ 1:14:08uh what it does for uh research, social mobility uh and overall aid to our economy uh is extremely important. Unfortunately, it's a gem that has been uh thrust into the mud uh largely by uh Democratic leadership. Uh and Democrats are great if you're a college administrator and want to see your salary increase or your job supply increase. They're terrible if you're a college student and you uh don't want to see your debt levels increase.
▶ 1:14:36Uh 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. And uh you know the problem with an 18-year-old is they don't know the difference between $6,000 in debt or $60,000 in debt. They've never had a job and had to pay it back. So what this body should be doing is how do we create an environment where student all students can get through school uh with no debt.
▶ 1:15:03Uh when I was in our state senate uh as Republicans, when we took control in the state senate, we actually dropped the price of college tuition 20% in Washington state under Republican leadership because we were working uh for the middle class. Uh I've had the experience of going to a big state school, Wash State University, where my father's a professor. Uh I spent a year uh as a teacher at UN Catholic University of Mosamb beek teaching war refugees.
▶ 1:15:26I was a teaching fellow at Harvard when I did my masters there and I was on uh short-term on the faculty at Science Poe University in Paris which is kind of the Harvard of France and across all those uh uh um experiences what I saw is that uh the amount of growth in administrators in uh American universities is simply out of control. Uh when you go to science poe there's no diversity deans, student housing deans, student welfare deans.
▶ 1:15:54there is simply this reliance on college students to behave as adults and figure stuff out for themselves. In doing that, they're able to provide college at a much much lower level. So, what this body needs to do is to figure out ways to get out all the BS out of higher education, get back to basics and uh create mechanisms uh to bring uh cost down. Now, I do want to touch on this issue of of the Ivy Leagues and Harvard specifically, which does have some real problems.
▶ 1:16:23Uh when I went to Harvard, uh there was a lack of viewpoint diversity. We used to call the the uh Republican club the phone booth club because there were so few of us 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. But in any event, the solution to this is just to make these universities uh reflective of American society. It's like Noah's Arc. Just increase access and viewpoint diversity.
▶ 1:16:46uh this shouldn't be hard uh except the fact the far left does not want to give up its strangle hold on America's most elite universities but this is going to happen uh secondly there is a problem with the Chinese government and foreign institutions uh utilizing America's most elite uh universities when I went to Harvard uh there was sort of a smallcale scandal that they refused to fly the flag of Taiwan uh at that time uh and in fact we have some important uh legislation here in body in the deterrent
▶ 1:17:17act uh which we passed out of the house that would illuminate how much foreign influence is going on in college campuses from uh places like China and even today Harvard resists implementing uh that bill. I'd like to uh uh enter for the record uh this uh uh column this newspaper article that Harvard has trained so many Chinese communist officials they call it their party school. So there very much is a problem of China these universities if I could enter this in the record. Thank you, Mr. Chair.
▶ 1:17:46Uh, and finally, uh, I just want to, um, thank all the panelists for fighting this antirust, uh, issue. But as we think about these issues, we all need to realize that college enrollment is about to go off a cliff due to demographic uh, changes in America. We have a silver tsunami of older Americans and we have a dwindling rapidly supply of college students uh because of uh uh democratic factors in terms of birth rates and also the cost.
▶ 1:18:16So this anti-competitive behavior will likely become worse in coming years as uh the market total market for college students uh reduces. With that I yield back. Gentleman yields back. Uh Mr. Nadler is recognized for unanimous consent request. Uh Mr. Mr.
▶ 1:18:34Chairman, 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 that argues low-income to moderate students will quote, "borrow more but with worse terms." Without objection. Thank you. And 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 without objection. and another entitled declining enrollment is leading to school closures.
▶ 1:19:04Without objection, the uh ranking member of the full committee, Mr. Rasca, is now recognized for five minutes. And thank you, Mr. Chairman. Uh Mr. Shay, so you describe yourself as um a son of wealth and privilege. I think you describe yourself as a legacy student. Does that mean your parents or your grandparents went to Brown? Yeah, my father went to Brown. Um, but the other than having some complaints like the beef mushroom blend, uh, you're you're really speaking not so much for yourself, but for other kids.
▶ 1:19:34You say the kids who are not born on third base. Is that right? Absolutely. I think the value of an Ivy League degree used to mean that that you were smart, that you're brilliant, but I think it's being diminished. And 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've advocated by a couple hundred kids, the vast majority are going to end up going to, if they can afford it, state universities, uh, community colleges, and so on.
▶ 1:20:01So my question for you is, will you use your platform here today to oppose the major cuts in Pell grants, which have allowed, uh, an avenue for upward mobility and education for young people that are built into the current tax bill, 1.4 million Americans would be thrown off. And I just wonder if you would oppose the cuts to PEL grants, the cuts to student loans and the cuts the 80% cuts to college work study which you know allows people to work their way through college.
▶ 1:20:27Well, I think something that we've observed economically is that No, no, I'm going to like my friend, I'm going to ask you to answer the question. Do you oppose all those cuts or do you support them? I guess I believe that uh that subsidizing education only increases the cost because So you so you favor those cuts. You would just get rid of the Pell Grant program. Is that right? I'm not an expert on the PEL grant program, but I know that generally you seem to be an expert. So you you you don't favor federal student aid to kids who want to go to college for PEL grants or college work study.
▶ 1:20:57You're opposed to that. I think that when students don't pay the cost of going to college, then we've seen prices. You made yourself clear and thank you for coming in for your testimony. Look, um the a point was made before that collusion is per se illegal, which of course is true as a matter of antirust law, but per se collusion is only illegal if there is actually per se collusion.
▶ 1:21:21Now, this reminds me of a hearing that we did over in the oversight committee with Chairman Comr about impeachment where the Republicans lined up all these witnesses about impeachment of Joe Biden and then all of them said that they didn't see evidence. they they were not aware of evidence that would justify impeachment. And so the two expert witnesses here, Dr. Cooper and Mr. Martin, as I'm reading your testimony, uh are saying that they they don't have evidence of price fixing. Uh Mr. Martin says, I think you just stated it.
▶ 1:21:51I'm making no judgment about any current conduct. You're not making a statement on it. Dr. Cooper, you said, "My testimony does not take a position on whether Ivy Leagues are coordinating their pricing decisions or whether they're in violation of federal antitrust laws." So again, this is much a do about nothing. Uh this is an attempt just to create kind of a propaganda smokec screen to attack the Ivy League schools. And your expert witnesses are saying that they don't have evidence that there are antitrust violations going on.
▶ 1:22:19And of course they're 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. But there is a real problem in America.
▶ 1:22:47Only 10% of college students uh go to for-profit colleges, but they're responsible for 50% of all student loan defaults. And I'm going to ask for um unanimous consent to enter uh a campaign statement by Marco Rubio uh entitled Trump University is an absolute scam. Get the facts about pending litigation if we could, Mr. Chairman. But Dr. Morgan, let me let me go to you.
▶ 1:23:14Um, how does the Republican attack on regulatory protections against for-profit colleges and universities um, uh, affect the fraud against students taking place and the education market generally because they are dismantling the regulations that were put in place to protect students against for-profit university fraud.
▶ 1:23:37Yeah, we're seeing action both here in Congress and at the Department of Education that are dismantling or laying the groundwork to dismantle all of the protections that have been put in place for for-profit schools. And what we've seen cycllically 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. Okay. And what about their move to abolish the Department of Education and to gut the Consumer Financial Protection Bureau?
▶ 1:24:05Will that exacerbate the difficulties that young people are having paying for college? We're taking the cops off the beat who can actually identify that fraud and stop it and put money back into people's pockets. Gentleman's time. Gentleman's time is expired. Um, I'd ask unanimous consent to enter the record the following.
▶ 1:24:22an article from Ivy Coach titled Ivy League tuition and fees for 2024-25 comparing tuition rates amongst the eight Ivy League schools and also an article from Ivy Coach titled Ivy League admission statistics comparing the acceptance rates amongst the eight Ivy League schools. I now recognize a gentleman from Virginia. Thank you, Mr. Chairman. I appreciate uh the hearing and I appreciate the comments of the ranking member. Let's define what collusion is.
▶ 1:24:50Let'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. Uh it's very clear that the eight Ivy League member institutions have a long history of colluding with each other and other elite higher education institutions.
▶ 1:25:18Back in 1958, they formed a cartel called the IV 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.
▶ 1:25:40Later operating under a now expired antitrust exemption, many of the Ivy League institutions and other elite higher education institutions formed the 568 President's Working Group, which likewise created a common formula to ensure 568 PWG schools would not compete on price. So this behavior led to lawsuits and settlements against many of the Ivy League institutions. Uh Dr.
▶ 1:26:05Cooper, 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 Absolutely, Congressman. I believe the opaque financial aid system enables uh 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. We've seen collusion on pricing before enactment of the section 568 exemption.
▶ 1:26:34And 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? So the uh the the prices that colleges charge are very opaque right now. You have to apply and be admitted in order to figure out how much you're going to pay.
▶ 1:26:55And at that point the uh college sort of has you captive that you it's going to be very difficult for you to comparison shop at that point go to a different school and you kind of have to accept the price that the school is charging you or else maybe not go to So similar question to Mr. Martin. Um these institutions through the overlap group and the 568 president's working group used this common financial aid formula for decades um to make sure they weren't competing on price.
▶ 1:27:21Do 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? Well, that's the subject of an ongoing litigation in the Northern District of Illinois. And to put a finer point, I I make no prejudgment as to what the outcome of that litigation would be. I only note that, you know, 12 of the 17 member institutions have settled it for a total of $320 million. It survived a motion to dismiss. it's gone on uh through um uh through discovery.
▶ 1:27:52Um and quite candidly, some of the documents uh in that case uh will be challenging for the remaining defendants. And if they are shown to be using the same formula, could that present significant antitrust issues? It it it could there are substantial damages alleged in the case. Mr. She Brown's Brown's estimated cost of attendance during the 2526 academic year is $97,284 per year.
▶ 1:28:19That means Brown values a degree from its institution at $400,000. Uh do you think a degree from Brown is worth nearly $400,000? That's a very good question. I think that um is that empirically it's it's just barely worth it. But I think that uh for the kids who it could help the most uh that's that's too much for them to pay upfront. I appreciate that.
▶ 1:28:41I I would argue that it does not uh the the worth is not uh four times the worth of an instate school or uh six or eight times that of a community college education. And with that, I would yield back. Gentleman yields back. Mr. Chair, I have a UC members recognized. I ask unanimous consent to enter into the record uh ABC News article.
▶ 1:29:04Judge finalizes $25 million settlement for victims of Donald Trump's fraudulent university and USA Today judge finalizes $2 million settlement for students of Sham University. Without objection, uh gentleman from California is now recognized for five minutes. Thank you, Mr. Chairman. Appreciate you and the ranking member. Thank you for holding this hearing today.
▶ 1:29:26I'm sure here in Washington DC Brown, discussing Harvard, discussing private elite universities is very important somehow somewhere, but not to district. We're bluecollar middle class. My dad wasn't a doctor. who's a union worker making cardboard boxes and my mom used to clean hotel rooms at a buck 50 an hour and we managed to survive.
▶ 1:29:57My 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. appreciate holding this hearing today talking about these elite institutions, but I can assure you back home nobody gives a darn about this stuff.
▶ 1:30:25What they care about is how to survive on a basis. Public policy, government subsidization of public education. What's that old saying? If it ain't broke, don't fix it. The GI Bill, World War II over, the greatest generation comes back, comes back to the US. We decide to pay for their college education.
▶ 1:30:54We educated a generation, the greatest generation that built the greatest country in the world on the government dime. My generation. I did go to the Harvard, the West Coast, Cal State Fullerton. second rate school, not a UC, but a Cal State. That was right for this kid from the hood. By the way, my tuition then was zero.
▶ 1:31:24Pell grant, Cal Grant paid for everything and I skipped a few meals to make it happen. Here we are today discussing Harvard Brown. I'm going to have to go back and tell my constituents that two or three hours spent here today is going to make a big difference in their life. I will tell you what they're looking at.
▶ 1:31:51Cell grants, Pell grants, cutting of PEL grants, school loans. They want to know how they can also get the opportunity to go to college. And 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? And don't those taxpayers go to our children? The greatest gift God had gives us, our children, to educate them.
▶ 1:32:20So what's 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 immigrants.
▶ 1:32:46Chart behind me shows all of AI companies have been recently started up by immigrants in this country. I thought we were supposed to win the AI competition.
▶ 1:33:01And 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 in 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.
▶ 1:33:27So again, what is it that's broke that we are trying to fix? Would the gentleman yield for question? Go ahead, Mr. Craig. Thank you for your very passionate and eloquent remarks. What would have happened to you if you had not had um access to Pell Grants and Cal Grants and public money to go to school? What would happen to your working-class constituents today? Are you asking me to delve into a personal confession?
▶ 1:33:54The gift that my father gave me when I graduated from high school was he said, "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's where that financial aid came in to being this kid from the hood who wasn't quite ready for college was able to make it with that financial aid. Gentlemen's time has expired.
▶ 1:34:24Now recognize Mr. Gooden from Texas for five minutes. Thank you, Mr. Chairman. I I think one of the points Mr. Sheay 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, etc. 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's subsidized or not uh to pay for these degrees.
▶ 1:34:53I'm curious, Mr. Sheay, when you started asking all these questions and making noise at Brown University, what was their response to you? They were not very happy. Um, the Brown administration told people not to respond uh to our emails and then they hit us with a disciplinary investigation, charging me personally for bizarre things such as emotional/ psychological harm. Apparently, that's a real student code of conduct violation. But I was found not responsible for anything.
▶ 1:35:19But they also dragged in the entire board of the Brown spectator and charged all of us. Um, and luckily we were cleared. But I think this shows that that there's rot and they're trying to cover it up. Isn't that interesting that they had a problem with your free speech and the the work you were doing, but they didn't have a problem with the pro Palestinian encampments and all the anti-semitism?
▶ 1:35:41Isn't Isn't that just wildly ironic that they would go after little old you, just a student that's banging the drum and kicking and screaming about high cost and that pissed them off so much that they started an investigation and came after you, but they didn't have a problem with the anti-semitism all over their campus. This is certainly a double standard. Um, in in 2023, we saw that a large group of protesters were actually arrested for trespassing.
▶ 1:36:08They invaded uh one of the buildings and they were asked to leave. They didn't leave. They were arrested and Brown told the the the prosecutor to drop the charges. They weren't disciplined at all. Um I think there is a there's a clear double standard here. Well, I hope you'll keep I hope you'll keep after it. Uh the fact that the Democrats on this committee uh are going after you uh not hard. I'll give I'll give them credit. Uh but trying to nail you down on a Pell Grant question that really doesn't have anything to do with the point we're trying to make here.
▶ 1:36:37The point is, if college wasn't so expensive, we wouldn't even need all this financial aid because it wouldn't cost a fortune to go to college. It shouldn't cost $400,000. And kids that can't afford it wouldn't need the aid that they get because they would have aid, but we we would need $400,000 of it.
▶ 1:36:56And so I hope that every child, every student in America can go to whatever college they want, but they're not going to as long as class sizes are limited and the price tags keep going up. Uh, another another interesting tidbit that I have found in all of this is all these endowments. Uh, one of my colleagues on the other side said taxpayer money uh was meant to go towards uh, funding this.
▶ 1:37:22If an Ivy League institution has billions of dollars in their endowments, then you've I'm wondering how much needs to be given to this university uh with extra taxpayer dollars. Dr. Cooper, will you comment on that? Absolutely. Some of these Ivy League universities have endowments in the tens of billions. Harvard has an endowment north of $50 billion.
▶ 1:37:48And these institutions actually pro are less likely to provide institutional financial aid than other private colleges with fewer resources. And yet my colleague over here seems to just be outraged that we would want Harvard or 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? I think you're right.
▶ 1:38:16Harvard 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. Well, I I just I praise your work. I I'm sorry on on behalf of my colleagues on the left that seem to be so angry uh with your exposing of the corruption and the collusion and the exorbitant cost increases of Ivy League educations.
▶ 1:38:41I can't hear one peep out of them with respect to the anti-semitism in these same Ivy League institutions. They're all mad at President Trump for actually standing up against this anti-semitism that we're seeing. They're actually they're mad at President Trump for trying to bring down the cost and saying to these Ivy League institutions, we're not going to keep sending you money of US taxpayer dollars as long as you're helping to propagate this anti-semitism.
▶ 1:39:11They're doing nothing about this and Democrats are so mad at the president for standing up for the students and for standing up for the taxpayers that they instead are are wasting your time going after you. So keep it up, Mr. Sheay, Dr. Cooper, Mr. Martin. I appreciate your work and I encourage you to keep the pressure on Brown, especially Mr. Sheay. Uh don't be discouraged and know that the American people, the vast majority of the American people, uh support your efforts and we stand with you and we share your your views. Thank you.
▶ 1:39:40Gentleman yields back. We have a couple of uh unanimous consent requests. Mr. Korea first. Thank you, Mr. Chairman. Uh unanimous consent for the uh including the following items in our record. First one, Trump is crushing America's AI leadership. We still have time to fix it. April 23rd, Without objection. JD Vance wanted aggressively attack American universities. June 3rd, 2025.
▶ 1:40:09cost of federally sponsored research infographic on the Association of American Universities website. Without objection, 2022 benefiting society and the economy, American technology transfer for 2023. Federal R&D cuts would be another un unforced policy error. Number seven, America's R&D rethink threatens its innovation supremacy.
▶ 1:40:34Number eight, new American Fortune 500 in 2024, American Immigration Council. Number nine, US scientists warned that Trump's cuts will set off brain drain. Number 10, these are the US universities more more dependent on international students. And number 11, losing international students could devastate many colleges. Thank you, Mr. Chair. Without objection, Mr.
▶ 1:41:00I'll ask unanimous consent to enter the record the following a Washington Post article titled students overpaid elite colleges 685 million price fixing suit. Uh a pre a press release from Burger Migu titled plaintiffs in elite university price fixing case settled with Caltech and John Hopkins and then also plaintiffs memorandum of law in support of their motion for class certification in the case of Corzo versus Brown.
▶ 1:41:29the gentleoman for Mr. Chairman, I just had one more if I could. Oh, go ahead. This is for one article entitled Congressional Republicans budget reconciliation bill imperils 4.4 million Pell Grant recipients. Without objection. The gentleoman from Vermont is now recognized for Thank you, Mr. Chair. We should be able to work together and find bipartisan solutions to this problem. I have two teenagers myself. They're starting to look at colleges. I've got sticker shock.
▶ 1:41:58um as do most parents who go through this process. And I am really worried about all of the talented students who don't even apply, not just because of the tuition or the uh room and board, but simply the fees in order to apply. It's out of reach for so many families and the astronomical costs mean working people do not have a fair shot at higher education. I think that that is why we have been so vocal today about the cuts to the Pell Grant program.
▶ 1:42:28Everyone seems to agree that the high cost of college is a real problem in this country, but we can't seem to agree on how it is that we're going to bring down tuition costs. This is the kind of things 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.
▶ 1:42:56But that's not actually why we're here today. It's so clear that that's not what this is actually about. Dr. Morgan, I'm so glad that you're here and I thank you so much for your time. Can you, you know, take us through sort of the crux of what it is that we're supposed to be doing here, which is unpacking all of this? What are the things that are driving these higher costs in education? Yeah, thank you for the question. Um, it differs really by sector.
▶ 1:43:23There are a lot of varied factors that go into college costs, but it really 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, you know, they're out to maximize their profit. So the cost of providing the education is actually quite low and doesn't really drive the the tuition prices. Their cost of marketing is quite high because they're trying to bring people in the door.
▶ 1:43:46Um you know 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 the cost of tuition is state appropriations.
▶ 1:44:01And so that's why I've been quite focused on what um 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 I think we are going to see a squeeze on state budgets that increases the price of tuition and what we've seen in the past is that it takes a really long time to unwind that even if we're looking at something that you know that only affects a given year.
▶ 1:44:26So what you're saying is is true that if we are not investing in the institutions that most of our students go to, we are compounding the problem. That's so I really appreciate that. Um when we're talking about um the affordability problem, are we talking about all institutions of higher education in the United States or is it just the Ivy's?
▶ 1:44:50You know, I think there's there's a broad swath of colleges where the tuition is quite high and where they're using these opaque discounting models to get to a net price, but there are a lot of colleges in this country that have held their costs quite low despite, you know, weathering the storms of state budgets and cuts to federal aid um and are really doing their best to provide an an education at a transparent price to people where they can come out with as little debt as possible.
▶ 1:45:16I 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. So that's right for community college students in particular. They're going to be affected by cuts to things like SNAP. They're also affected by the impact of things like the tariffs and the cost of living that the cost of living increases that that's driving for families.
▶ 1:45:39So for them, the whole package and their indebtedness to achieve an education is going to be higher because of all of the the rising costs that we're seeing right now. I really appreciate that is complicated problem. It requires a seriousness of purpose and not some sham hearing. My rec my Republican colleagues are not here to seriously investigate the problem of college affordability.
▶ 1:46:02They 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 opposite opposition. The reason I know this is because my 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.
▶ 1:46:33So, 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's a shame and it's a disservice to our students across this country. I yield back. Gentlewoman yields back. Gentlewoman from Wyoming is recognized for five minutes.
▶ 1:47:03Thank you. I yield my five minutes to the uh Mr. Neils from Texas. Thank you, Miss Hegman. Thank you for our witnesses taking the time to be here. As we've already discussed, the tuition rate rates at self-proclaimed elite universities have ballooned over the years due to long-standing collusion between them. Long-standing collusion.
▶ 1:47:24This 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 non-instructional staff per two students. How do you like that ratio? Yet the average private university gets by with onethird the administrative staff.
▶ 1:47:50And much like we see in the federal government at some point bureaucracies they get so big fat 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 Sheay, decided to ask. Great question, Alex.
▶ 1:48:16Pursuant to his work as a student journalist investigating administrative bloat at Brown, Mr. Sheay emailed all 385 non-faculty employees of the university to inquire about where what their job entail, right? Rather than simply respond to the inquiry, Brown chose to initiate disciplinary proceedings against Mr. Sheay. I was so appalled when I heard about this that I wrote a letter to Brown urging them to reverse course.
▶ 1:48:43I believe our fearless leader, Chairman Jordan, and the committee, they wrote a letter and Brown reversed course and I'm glad they did. It's one thing to create a vast useless administrative bureaucracy to justify an exorbitant tuition rate of $93,000, but to punish a student journalist for daring to ask a question about it is unacceptable, Mr. Sheay, what first prompted you to make the inquiry? That's an excellent question.
▶ 1:49:11So, Brown has a $46 million budget shortfall, even uh even while charging students the price of a luxury car. and uh and and it doesn't seem like they want to cut any administrators. They're having hiring freezes, but they're they're not willing to cut any jobs. So, I thought this was something that needed to be looked into. Why do you think the employees that you email, they didn't they didn't answer your questions? Many of them didn't respond. Well, some of them answered, and the ones who answered seem to have pretty useful jobs. So, I guess we can maybe infer that the ones who didn't have jobs that are not so important.
▶ 1:49:40The ones that didn't were too embarrassed. They were too embarrassed. They weren't going to respond to you. Why do you think elite uh schools like Brown might be more frugal in administrative spending if they had to pay the same 21% tax rate on their endowment profits as corporations? Certainly. I mean, when when you have to pay higher taxes, there's there's less money floating around and you got to tighten the budget. Now, that's beautiful. We put it reconciliation now. So, these universities is 1.4. Now, it's going to go to 21%. 21%.
▶ 1:50:10I'm so excited that that legislation was in our reconciliation. How about you, Mr. Dr. Cooper, what do you think? I think that uh the 21% tax on endowments will probably induce some belt tightening among these Ivy League institutions. And I would also note that the tax is uh structured such that if you expand your enrollment, you face a lower tax rate because and that might be an inducement that some of these colleges need to actually admit more qualified students from middle- inome backgrounds. Well, let me be clear. We're not actually taxing the endowment itself. It's the net profits, the earnings on their investments.
▶ 1:50:41And we're expecting 7 to10 billion dollars annually. 7 to 10 billion. It's a big deal. Mr. Cooper, the average four-year private university costs around uh 35,000 per student while the Ivy Leagues average 126,000. To what degree is administrative bloat attributed to this? I can't imagine that most of that extra $126,000 in spending per student is really going to benefit students.
▶ 1:51:06What we see is much higher administrator to student ratios at Ivy League institutions than other private colleges. Thank you. Thank you, Miss Haggman. Uh Mr. Chair, I yield back. The uh gentleman yields back and the gentleoman from Wyoming's time is yielded back. I now recognize the gentleman from Illinois for 5 minutes. Thank you uh Mr. Chairman.
▶ 1:51:29And this uh hearing highlights a real problem, the crisis of affordability in higher education. But instead of focusing on systemic issues and solutions, Republicans have chosen a narrow and misleading target, the Ivy League, which enrolls less than 1% half of 1% of all undergraduate students.
▶ 1:51:55It's 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%. So, this problem isn't limited to antirust violations by the Ivy League. It's a problem that affects working families regardless of which school students attend.
▶ 1:52:24And this problem is rooted in the commodification of education. Many schools have become real estate trusts and hedge funds that treat education as an afterthought. They gain 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.
▶ 1:52:54This model has been a disaster for students and for our economy. Higher education is becoming more essential and more unaffordable. Over 40 million people hold nearly $2 trillion in debt and black and Latino students, immigrant students and first generation students in particular are being priced out of opportunity.
▶ 1:53:20So in addition to antitrust enforcement, Congress must act and we should consider policy options like tuitionfree public college caps on tuition increases, increase need-based aid, reforms to the student loan system, and support for trade and vocational schools.
▶ 1:53:44Not everyone needs to go to college, but if Republicans were serious about affordability, we'd see policy solutions. We don't see that. Instead, we see culture wars. Let's talk about what they actually do. Miss 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? It does not. Thank you.
▶ 1:54:10Does cutting research funding for universities lower tuition costs? It does not. Does funding financial aid does cutting financial aid programs and student debt relief lower tuition costs? Definitely does not. Does suppressing free speech and enforcing a Trump approved ideology lower tuition costs? It does not. Thank you.
▶ 1:54:33And as usual, Republicans are pretending to be firefighters when they're actually arsonists. We need to address the cost of higher education. But nothing in their cruel reconciliation bill does that. So this hearing is just a hypocritical hypocritical distraction. Republicans fight culture wars.
▶ 1:54:59They manufacture outrage and funnel taxpayer dollars to billionaires and to ICE while defunding higher education programs that help workingclass 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. Gentleman yields back.
▶ 1:55:29Gentleman from North Carolina is now recognized for five minutes. Thank you, Mr. Chairman, and thank you to all of you that are on the panel today uh for your testimony. We've been in and out of other committee meetings and uh but I did have the privilege of reading your written testimonies in advance. And I I do want to just ask you a couple of questions. Um, you know, for decades, elite universities were protected by the antitrust exemption under the understanding that they were going to provide these needlind financial aid, which they arguably are not.
▶ 1:55:59Um, and so, Mr. Martin, I want to go to you first. Um, in your view, did the exemption do anything meaningful to bring down colleg's cost to make or make colleges expense more accessible? I've I've not studied that, Congressman, but I'm aware of nothing. Okay.
▶ 1:56:18We we really, I think, have seen what 30 years of colluding about the financial aid formulas did to college affordability and accessibility, but 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 antirust exemption like section 568 or force the schools to compete against one another?
▶ 1:56:48As as an antirust uh uh lawyer, congressman, u the free market is generally uh the best uh the best tool for solving problems of prices. Well, and I I too I believe that competition would play a role in bringing down college costs. And uh 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 uh everyday Americans.
▶ 1:57:18So thank you. Thank you for your response. Um I want to go to Mr. Shia. And uh Mr. Shia, you caused quite a stir with your email to Brown's employees. your efforts to to shine a light on Brown University's excess mirrors our fight in Congress to cut wasteful spending as we're dealing with it day in and day out. Could Can you I don't want to give you a chance to explain your motivation for shining a light on what you describe as administrative bloat. Exactly.
▶ 1:57:46Well, I think the the root of the problem is that Brown is just so darn unaffordable for students all across the country. And that's why Brown is the has the richest median income of all the Ivy League schools. Like I said, half of the Brown student is from body is from the top 5% of Americans. And I I just think that's wrong. I think that's morally wrong because the Ivy League is supposed to be a ladder to the American dream. But uh but we're we're pulling up the ladder so that only rich kids can can access it. And I think that's wrong.
▶ 1:58:12And and I noticed in your written testimony that uh you pointed out there's roughly a ratio of one administrator for every two students. And I got to ask you, is this necessary for Brown students to obtain a degree? Certainly not. We can we've 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.
▶ 1:58:39And I would say, does this number of administrators meaningfully impact the overall experience of Brown students? Certainly not. And they they might even detract from it because when budget cuts need to be made um the the enormous administrative bloat means that and and their uh unwillingness to reduce it means that the costs have to be cut somewhere else. Right. So and which lead you almost answer my other question is how could cutting some of the bloat benefit the consumer that's looking to come to Brown? Well, absolutely.
▶ 1:59:08Like dorms flood the the food is unappetizingly bad and the the quality just keeps getting worse. like they're they're reducing uh red meat from all the dining halls. They say it's about the environment, but it's really about the cost. Um and and by reducing administrative bloat, we definitely could see some improvements in the student experience. Thank you. Dr. Cooper, let me ask you.
▶ 1:59:27You said in your written testimony that quote, "The surplus revenues that Ivy League institutions enjoy currently fuel administrative bloat, but they could be used to create more seats for qualified applicants. Can you explain the the benefits for our entire nation that could come from increased enrollment at these elite institutions? Absolutely. Right now, uh if you look at uh elite institutions graduates, they are vastly over represented in the elites of business, politics, and media.
▶ 1:59:57And 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, you know, a greater diversity of folks in those elite positions. Uh so I would love to see uh Ivy League institutions use their endowments, use all the money they're currently spending on administration to expand and create opportunity for more of those students. Well, thank you and thank you to all of you for uh shining the light that you're shining today. And uh Mr. Chairman, with that I yield back. Gentleman yields back. Without objection, I ask unanimous consent.
▶ 2:00:27Enter 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 and an article by Saja Sarda titled How to Crush the Ivy League Cartel. And finally, a document number 753-18 filed in the case of Henry versus Brown University on December 16th, 2024.
▶ 2:00:56Uh we now recognize the gentleman from Georgia for 5 minutes. Uh thank you, Mr. Chairman. Let's be clear, everybody. There is no 568 antirust exemption thanks to the Biden administration. And um as far as Mr. Shei's uh testimony is concerned, um it's Brown did not discipline uh Mr. Shei contrary to his report. And also Mr.
▶ 2:01:25She's numbers in terms of administration staff for Brown University are incorrect. So, uh, and I'm surprised that you would pull up the ladder for students who are going to u regular universities and colleges uh prevent them from getting uh financial aid. That's crazy.
▶ 2:01:46Uh but at any rate um you know 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 towards authoritarianism and dictatorship which Donald Trump and MAGA represent.
▶ 2:02:11They say this hearing is about I 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 uh Trump's uh attack on academia which comes straight out of the authoritarian playbook.
▶ 2:02:35Universities 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.
▶ 2:02:57So 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 our democracy guarantees. Dr.
▶ 2:03:24Morgan, I believe that academia in 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? Absolutely. You know, first of all, our institutions of higher learning are places where people come together and learn and have to, you know, kind of be in the same place as people with different opinions. So it really promotes democratic values from the start.
▶ 2:03:54But to your point, universities can also be a place of free inquiry that can can result in um you know information that can oppose or point out flaws in larger societal trends or political trends. So they can be really important voices in our um in our societies.
▶ 2:04:12They're also places that produce research that can help us under better understand what's happening in the world around us, including what's happening the kind of effects of the um the negative changes that a presidential administration might be putting in place. So, they're incredibly important to our democracy and to our society. Thank you. As a lawyer, I've watched with horror as a number of law firms bent a knee and succumb to Donald Trump's unlawful pressure campaign.
▶ 2:04:41But I'm proud of the brave firms that chose to stand up for the rule of law. Now, as Trump goes after the universities, I'm equally concerned. In March, Colombia 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 in rejecting Trump's demands.
▶ 2:05:09Morgan, 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? Yeah, I think it's incredibly important that universities follow the law but do not submit to demands that have nothing to do with their legal requirements.
▶ 2:05:32Um, you can see in the attacks on Harvard and the the kind of proposed solutions from the Trump administration that they're looking to really control the minutia of the decisions at those colleges. That's not an appropriate role for the federal government to take. I think the other thing that's important to understand here is that other universities are going to take their cues from what these much better resourced institutions um are able to do in terms of standing up to the administration.
▶ 2:06:01So it's really important for those universities that have the resources to do so to take a stand. So attacking elite institutions is a canary in the coal mine. That's right. All institutions of higher learning are under attack. That's right. Thank you. With that, I yield back. Gentleman yields back. Now recognize the chairman of the full committee, Mr. Jordan, for five minutes. Uh thank you, Mr. Chairman. Mr. Shay, what did you say tuition was again at uh at Brown? Annual tuition. It's $93,064 in direct costs. 93.
▶ 2:06:31That doesn't count room and board and books and everything. That's just tuition, right? No, that's that's including room. That's everything. Okay. $93,000. How many students you say again was that Brown? Over 7,000, I think you said. 7,000. Yeah. So, that's a lot of money coming in. Maybe it could be some grants. It could be some aid. It could be some, you know, loans, whatever. But 93,000 times 7. It's like $700 million coming into Brown every year. And you asked the fundamental question, sort of simple question. You asked the question, where the heck's all the money going, right? And you said, "Maybe I'll check the administrators." How many administrators have?
▶ 2:06:59And you said, I think the number you said was 38 or 3,85. Is that right? Yep. And then you sent a letter to these guys asking another fundamental question. What do you do all day? And what was the response you said? Most of them didn't get back with you. Most of them didn't respond. And we were uh hit with disciplinary charges. So the administrators couldn't respond to a simple question. You're taking in $700 million a year. What the heck are you 3,800 administrators doing?
▶ 2:07:25Every the administrators didn't respond, but the administration came after you. Is that right? That's right. When you investigate the administration, it turns out they investigate you back. Yeah. And uh you know, it was interesting to me because the 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. Right. Was it Brown what's the name of your paper? Brown spectator. Yep. And they come after you. Why do you think they did that?
▶ 2:07:55Why did they come at Well, first of all, what did they come after you about? What did you allegedly do wrong? Well, first it was emotional and psychological harm, invasion of privacy, and misrepresentation, and then they decided to charge me with uh violating the technology. Asking someone how they spend your money is emotional harm. That's what they alleged apparently. Uh and then what happened in the investigation?
▶ 2:08:18Well, then they escalated and they enched 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 a completely bogus claim. And are there other are there other newspapers that Brown would use Brown in the in the name of the paper? Yes. Uh are other newspapers the Brown? Probably in the entire history of the university, there's been some kind of Brown publication, right? Certainly. Yeah. I mean, that's just ridiculous. Why do you really think they did it? Why did they really come after you? I think that they were upset that we uh unveiled the rot that was going on.
▶ 2:08:47All these administrators um with pretty useless jobs and uh that's certainly one reason they were mad at you, but I think it's probably more I think they were trying to make sure no one else would do it in the future. That's always the way it works. The left comes after people. They will they want a chill speech so it doesn't happen again. Do you think that was part of their motivation? I think that certainly was true, but it backfired terribly. Sure did. Sure did. Because you're brave enough to keep talking, keep come here and testify. So, God bless you for doing that. Now, you can have I'll direct this to you, Mr. Martin.
▶ 2:09:15You can have a bloated bureaucracy when you're colluding on price and not and and and making sure you're not competing on price with other similarly situated institutions. Is that right, Mr. Martin? Yes. And you're not supposed to do that, are you? According to the law, is that right, Mr. Martin? You clue on price, it's it's per se unlawful. It's per se unlawful. And you can also you can also have bloated when you clude on price and you limit output. You limit class size. Is that right, Mr. Martin? That's correct. And do you think that's going on at these? Oh, there's a third one.
▶ 2:09:45You 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. You say that student can pay this amount. You'll 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 38 3,85 administrators for 7,000 students. Is that right, Mr. Martin? You make an excellent point.
▶ 2:10:13The more perfect the information, the more perfect the collusion can be, algorithmically or otherwise. Of course, and that's exactly what's going on. Is that right, Dr. Cooper? The evidence is certainly consistent with that. Yes, that's what the evidence shows. And yet the other side says, "Oh, how dare Mr. Fitzgerald have this hearing?" You got to be kidding me. They they tried to chill the speech of a news publication at the university for a student.
▶ 2:10:36They're supposed to be serving asking a simple and fundamental question and they want to chill that because they don't want anyone to look under the covers and see that they're colluding on price. They're limiting output and they're doing perfect price discrimination. Imagine that. Imagine that. And we're not supposed to have a hearing. Holy cow. I want to thank the chairman for doing the hearing. I want to thank all of you for testifying. And Mr. Shay, thank you for stepping forward and letting the country know what's going on at these elite universities. Well, will the gentleman yield for a quick question? I yield back to the chairman. I'll yield.
▶ 2:11:06You got Well, I just wonder if your feelings are the same about um the attacks on a private uh student publication called the Harvard Law Review taking place by the Trump administration right now. Well, I think the chairman or the ranking member knows that you and I have uh been strong defenders of the press. We have co-sponsored together the press act defending the press. I will continue to do that, but I'm I'm focused on the situation in front of us today. Mr. Shay at Brown University.
▶ 2:11:36I'm with you. Hold the thought. And uh more power to the free press at Brown and at Harvard. God bless America. Gentlemen, time is expired. That concludes today's hearing. Want to thank our women. Unanimous consent request. Oh, Mr. Nandler has a UC request. Thank you, Mr. Chairman. And I ask unanimous unanimous consent to enter into the record an article entitled Ivy League schools financial aid from the Ivy coach daily.
▶ 2:11:59And it says, moreover, while the sticker price at the Ivy League schools is high, about $90,000 per year, roughly half 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 completely free education to families whose incomes aren't $75,000 or less. Is that the title or the whole article? That's the whole article. Yeah. And I have a second without objection. I have a second unanimous consent request. Shorter.
▶ 2:12:27Uh, I ask unanimous consent to enter into the record an article from Chicago Booth Review titled Who's at Fault from Stu for Student Loan Defaults that argues that this article reviews research that analyzes student loan defaults and finds it finds that for-profit colleges half of the student loan defaults are from programs that only enroll 10% of US students. Furthermore, the review argues that default rates are not being driven by tuition costs. Without objection, that concludes today's hearing.
▶ 2:12:56We want to thank the witnesses for appearing before the committee today. Without objection, all members will have five legislative days submit additional written questions for the witnesses and additional materials for the record. Without objection, the hearing is