About the 568 Presidents' Group

A Brief Summary and Analysis of Section 568

In 1992, Congress included a new Section 1544 to the Higher Education Act reauthorization that made it permissible for institutions to agree to award financial aid on a need-only basis. Just prior to the expiration of that provision, a new Section 568 was added to the Improving America's Schools Act of 1994 (15 U.S.C. 1 note) that both extended the language in Section 1544 and made certain key features of the MIT Settlement available to a broader group of institutions. On September 30, 2008, H.R. 1777 was signed into law extending Section 568 of the Improving America's Schools Act of 1994 to September 30, 2015.

What Does Section 568 Do?

Section 568 states that it is not unlawful under the anti-trust laws for two or more need blind institutions to agree or attempt to agree:

1. to award financial aid only on the basis of need;
2. to use common principles of analysis for determining need;
3. to use a common aid application form; and
4. to engage in a one-time exchange of certain pre-award data of commonly admitted financial aid students.

The amendment specifically prohibits the sharing of any information on the amount or terms of any prospective, individual aid award and makes clear that the exemption does not apply to the awarding of federal financial aid.

How is Section 568 Related to the MIT Settlement?

Section 568 differs in several important ways from the MIT Settlement. Whereas the MIT Settlement has two preconditions for participating in certain cooperative financial aid activities (being need blind and meeting the full need of admitted students), under Section 568 eligible institutions must meet only the need-blind test in order to be eligible to participate in the exempt behavior enumerated in the provision.

The notion of a data exchange is also contained in the MIT Settlement, where two elements are specifically mentioned: 1) an exchange of five specific data elements on common admits prior to the awarding of aid; and 2) an ex post facto exchange of aggregate institutional data after awards are made. Section 568 permits only the former exchange and is silent on the latter.