Raj Yerasi '95 wants to go into business. And he considers The Wharton School at the University of Pennsylvania to be the best undergraduate business school in the country.

But any intention that the first-year student from Rowland Heights, Calif. might have had of attending Penn evaporated last April when he saw his financial aid offers.

Stanford University expected his family to contribute $3500 of what it would have cost for him to attend. Harvard wanted $5000. But Penn's offer would have left Yerasi's family with a tuition bill of more than $8000.

"[Stanford and Harvard] were the two best aid packages, so those are the only two I visited," said Yerasi. "Penn was ruled out off the bat."

Two years ago, a student like Yerasi might have gone to Penn. Now, after the May settlement of an antitrust suit filed by the Department of Justice, Yerasi and some of his classmates say they are seeing such wide discrepancies in financial aid offers that their college choices are virtually made for them.

According to admissions officials at Harvard and other schools, the impact such discrepancies have on financial aid budgets, coupled with the recession, threaten not only the decades-old policies of need-blind admissions and need-based financial aid but also racial and economic diversity on college campuses everywhere.

Two years ago, the Justice Department began its investigation of the Overlap Group, a now-defunct organization of 23 colleges which included all the Ivy League institutions as well as private colleges like Amherst, Williams, and Bowdoin. The group met annually to decide on financial aid offers to students accepted by more than one of the member institutions.

According to a report in The Chronicle of Higher Education, former attorney general Richard Thornburgh, who was defeated last month in his bid for a Pennsylvania seat in the U.S. Senate, said the group denies students "the right to compare prices and discounts among schools, just as they would in shopping for any other service."

The investigation concluded last May when the Ivy League members of Overlap, under pressure from the Justice Department, signed an agreement known as "the consent decree." The decree imposed a gag rule on financial aid offices, effectively ending the practice of jointly deciding aid awards.

"Each school can agree to distribute need-based scholarships unilaterally, but it can't decide to do that in consort with the group," said James Miller, director of financial aid.

In the era of Overlap, financial aid offers rarely differed by more than a few hundred dollars, aid officers say. But now both students and high school counselors say that students entering college this fall, the first group to be affected by the decree, have seen aid offers that regularly differ by thousands of dollars.

High school college counselors say the alarm sounded last May when high school seniors saw their financial aid offers.

Carl W. Bewig, director of college counseling at Phillips Andover Academy, said that he saw discrepancies of as much as $8000 in the aid awards of students he advised.

"To me, it represented a falling apart of the need-based financial aid program," he said.

Counselors at public high schools, even those with affluent student bodies, say that the discrepancies have affected college decision-making.