The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“NEED-BASED EDUCATIONAL AID ANTITRUST PROTECTION ACT OF 1997” mentioning the U.S. Dept. of Justice was published in the House of Representatives section on pages H4145-H4146 on June 23, 1997.
The publication is reproduced in full below:
NEED-BASED EDUCATIONAL AID ANTITRUST PROTECTION ACT OF 1997
Mr. SMITH of Texas. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1866) to continue favorable treatment for need-based educational aid under the antitrust laws.
The Clerk read as follows:
H.R. 1866
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Need-Based Educational Aid Antitrust Protection Act of 1997''.
SEC. 2. CONTINUATION OF FAVORABLE TREATMENT FOR NEED-BASED
EDUCATIONAL AID UNDER THE ANTITRUST LAWS.
(a) Amendments.--Section 568 of the Improving America's Schools Act of 1994 (15 U.S.C. 1 note) is amended--
(1) in the heading of subsection (a) by striking
``Temporary'',
(2) by striking subsection (d), and
(3) by redesignating subsection (e) as subsection (d).
(b) Effective Date.--The amendments made by subsection (a) shall take effect immediately before September 30, 1997.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Texas [Mr. Smith] and the gentleman from Massachusetts [Mr. Frank] each will control 20 minutes.
The Chair recognizes the gentleman from Texas [Mr.Smith].
General Leave
Mr. SMITH of Texas. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Texas?
There was no objection.
Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today the House considers H.R. 1866, the Need-based Financial Aid Antitrust Protection Act of 1997. Beginning in the mid-
1950's, a number of private colleges and universities agreed to award institutional financial aid; that is, aid from the school's own funds, solely on the basis of demonstrated financial need. These schools also agreed to use common principles to assess each student's financial need and to give essentially the same financial aid award to students admitted to more than one member of the group.
From the 1950's through the late 1980's the practice continued undisturbed. In 1989, the Antitrust Division of the Department of Justice brought suit against nine of the colleges that engaged in this practice. After extensive litigation the parties reached a settlement in 1993. In 1994, Congress passed a temporary exemption from the antitrust laws that basically codified that settlement. It allowed agreements to provide aid on the basis of need only, to use common principles of needs analysis, to use a common financial aid application form, and to allow the exchange of the student's financial information through a third party.
{time} 1245
It also prohibited agreements on awards to specific students. It provided for this exemption to expire on September 30, 1997.
Under this exemption, the affected schools have recently adopted a set of general principles to determine eligibility for institutional aid. These principles address issues like expected contributions from noncustodial parents, treatment of depreciation expense which may reduce a parent's income, evaluation of rental properties, and unusually high medical expenses. Common treatment of these types of issues makes sense and, to my knowledge, there are no complaints about the existing exemption. H.R. 1866 would make the exemption passed in 1994 permanent. It would not make any change to the substance of the exemption.
The need-based financial aid system serves social goals that the antitrust laws do not adequately address, namely making financial aid available to the broadest number of students solely on the basis of demonstrated need. Without it the schools would be required to compete, through financial aid awards, for the very top students. Those very top students would get all of the aid available, which would be more than they need. The rest would get less or none at all. Ultimately such a system would serve to undermine the principles of need-based aid and need-blinded missions.
No student who is otherwise qualified ought to be denied the opportunity to go to one of the Nation's most prestigious schools because of the limited financial institution of his or her family. H.R. 1866 will help protect need-based aid and need-blinded missions and preserve that opportunity.
Mr. Speaker, I urge the House to suspend the rules and pass this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I express my appreciation to the gentleman from Texas
[Mr. Smith]. I think this is a mistake on the part of the Justice Department, and I am glad that Congress is appropriately stepping in to let universities do as they think best with the funds they have. We should note that this is twice today that we have legislated to say that antitrust rules should not be used in effect to interfere with charity. We did it earlier on the annuity question. Universities that are trying to maximize the extent to which they can help people go to school who could not otherwise afford it deserve a lot of credit.
Mr. Speaker, I admire the willingness of the universities to persevere. I want to particularly say the Massachusetts Institute of Technology it seems to me showed a good deal of courage in this whole incident by not simply bucking under when they were sued. All the universities here, we should understand, the ones involved are fighting on behalf of themselves and other universities for the right to try to address the economic problems of people who could not afford to go to these schools. This is an effort by them to maximize the extent to which they give scholarship aid to people who genuinely need it and for whom it would be a necessity in going to school. They deserve credit for that. What they basically said is they will take on this fight and come to Congress for the right to be charitable in the best sense. So I am glad we are acting.
Mr. Speaker, I appreciate the leadership that the gentleman from Texas [Mr. Smith], a member of the majority took, in making sure we could bring this forward. I am delighted this is going forward now.
Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
Mr. CONYERS. Mr. Speaker, I want to commend Mr. Smith and Mr. Frank for their diligent work in bringing this bill to our attention. H.R. 1866 simply makes permanent a limited antitrust exemption for educational institutions.
Congress acted to provide the exemption after court decisions in 1991 and 1994 found that Ivy League schools who were sharing aid information concerning applicants were violating the antitrust laws. The 1994 law is scheduled to expire on September 30 of this year unless Congress first acts to extend it.
Under the terms of the current antitrust exemption, universities are permitted to develop common aid forms and exchange student financial data through a third party so long as they agree to admit students on a need-blind basis. This means that participating schools are able to make maximum use of their available funds and ensure that the largest number of students are able to receive some form of aid. The law specifically prohibits schools from comparing the amount or terms of specific aid offers made to students.
The 1994 law has worked well. Because of the law, financial aid officers have been able to develop a common set of principles for awarding aid and a common aid form. This has simplified the financial aid procedures for both students and their families as well as the colleges. In part, as a result, last year colleges and universities provided an estimated $8.6 billion in grants from their own funds, or 30 percent more than the $6.6 billion in aid provided by the Federal Government. This aid is absolutely vital at a time of ever diminishing Federal resources.
The exemption is narrowly drafted--allowing antitrust enforcers to pursue anticompetitive conduct while protecting socially beneficial activities by colleges--and deserves to be made permanent. I understand that the Justice Department has expressed no concerns with the bill, and I urge the Members to join me in supporting this well-intended legislation.
Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman from Massachusetts [Mr. Frank], for his generous comments.
Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Petri). The question is on the motion offered by the gentleman from Texas [Mr. Smith] that the House suspend the rules and pass the bill, H.R. 1866.
The question was taken; and (two-thirds having voted in favor thereof) the rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
____________________
