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“NEED-BASED EDUCATIONAL AID ACT OF 2008” mentioning the U.S. Dept. of Justice was published in the House of Representatives section on pages H2922-H2924 on April 30, 2008.
The publication is reproduced in full below:
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NEED-BASED EDUCATIONAL AID ACT OF 2008
Mr. DELAHUNT. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1777) to amend the Improving America's Schools Act of 1994 to make permanent the favorable treatment of need-based educational aid under the antitrust laws, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1777
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 Act of 2008''.
SEC. 2. AMENDMENT.
Subsection (d) of section 568 of the Improving America's Schools Act of 1994 (15 U.S.C. 1 note) is repealed.
The SPEAKER pro tempore (Mr. Loebsack). Pursuant to the rule, the gentleman from Massachusetts (Mr. Delahunt) and the gentleman from Texas (Mr. Smith) each will control 20 minutes.
The Chair recognizes the gentleman from Massachusetts.
General Leave
Mr. DELAHUNT. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Massachusetts?
There was no objection.
Mr. DELAHUNT. Mr. Speaker, I yield myself such time as I may consume.
First, I want to thank the Chair of the Judiciary Committee for allowing this important piece of legislation to move forward. I particularly want to thank the ranking member of the Judiciary Committee, Mr. Lamar Smith, for the opportunity to work with him on this significant legislation and for his outstanding work on this issue throughout the year.
The Need-Based Educational Aid Act of 2008, as its name suggests, is aimed at making college more affordable and accessible to qualified students, something that this Congress has repeatedly shown its commitment to. With overwhelming bipartisan majorities, we have passed such legislation as the College Cost Reduction and Access Act, and just last week, the Ensuring Continued Access to Student Loans Act. We have also increased transparency in the higher educational financial aid system by passing the Student Loan Sunshine Act.
H.R. 1777 will further that commitment to enhance educational opportunities. These successes are rooted in clear recognition on both sides of the aisle that access to higher education is vital to our national economy and central to America's promise.
However, the Need-Based Educational Act differs from those bills I just enumerated in two important aspects. First, this bill addresses institutional aid only. That is, aid provided to students from a college or university's own funds, not Federal dollars. Second, this bill is about increasing access to grants, as opposed to loans. Given the current cost of higher education, the financial sacrifices families make to send their children to college, and the amount students owe when they graduate, grants, as opposed to loans, play a vital and unique role in maintaining access to higher education.
This act will permanently extend the current antitrust exemption for colleges and universities that admit all students on a need-blind basis, without regard to a student's ability to pay, and provide institutional aid that is strictly need-based. This safe harbor from the antitrust laws allows two or more of these schools to agree on a common aid application in a common system of analysis of financial need, and to exchange information on commonly admitted students. It does not permit discussion or comparison of institutional awards for individual students. The current exemption expires on September 30 of this year.
Why is this bill necessary? Beginning in the 1950s, a substantial number of our most prestigious private colleges and universities agreed to award institutional financial aid to students solely on the basis of demonstrated financial need. The schools recognized that, without such an agreement, and without a uniform analysis of ``need,'' the schools would spend all of their money competing with each other to offer the largest aid package to a small select group of elite students. As a practical matter, the schools would be unable to fill the available spots in each incoming class because the select top students, who may or may not need such aid, were few in number. In addition, though, there would be many highly meritorious students who would be forced to forego their admission because of limited economic circumstances and insufficient financial aid.
The schools' decision was made in service of a social goal that the antitrust laws do not address, namely, making financial aid available to the broadest pool of students solely on the basis of demonstrated financial need. Congress responded quickly, passing the first temporary antitrust exemption in 1992, and we have reauthorized the exemption three times, each time improving and extending the exemption over the previous iteration.
The current exemption allows the schools to agree on this system of need-blind admissions and need-based aid, and allows a one-time exchange of student financial information through a third party. However, any further information-sharing is prohibited.
Since the last extension, both the GAO and the Antitrust Modernization Commission have examined the exemption and have found it consistent with antitrust principles. The schools themselves have lauded the exemption for increasing access to need-based aid and for bringing greater transparency to financial aid allocations. However, without this safe harbor, the schools fear that their collaboration on financial aid policies would subject them to prosecution.
Many studies show that our Nation's poorest students benefit the most from attendance at a prestigious school and, conversely, stand to lose the most from lack of access. Fortunately, these schools were empowered to continue and expand upon this truly American ideal that no individual should be denied a real chance to succeed because he or she was born poor.
I urge my colleagues to join myself and Mr. Smith in passing the Need-Based Educational Aid Act.
I reserve the balance of my time.
Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, first of all, I am glad we are considering this timely legislation tonight, H.R. 1777, the Need-Based Educational Aid Act of 2008. I also want to thank the gentleman from Massachusetts (Mr. Delahunt) for his tireless efforts in promoting this legislation, and also for his leadership, because if it were not for his leadership, we would not be here tonight considering this important bill. It was good working with him and I appreciate the success that he has had in getting us to this point. This issue has long been of interest to me personally as well. I also sponsored the bill that extended the exemption in 1997 and 2001.
Beginning in the mid-1950s, a number of private colleges and universities agreed to award financial aid solely on the basis of demonstrated need. These schools also agreed to use common criteria to assess each student's financial need and to give the same financial aid award to students admitted to more than one member of that group of schools. In the 1950s to the late 1980s, the practice continued.
In 1989, the Antitrust Division of the Department of Justice brought suit against nine of the colleges. After extensive litigation, the parties entered into a consent decree in 1991 that all but ended the practice. In 1992, Congress passed the first exemption to the antitrust laws for these colleges as part of the Higher Education Amendments. That temporary exemption codified the settlement and allowed colleges to provide aid on the basis of need only, to use common criteria to determine need, to use a common financial aid application form, and to allow the exchange of the student's financial information through a third party.
In 1994, Congress extended this exemption as section 568 of the Improving America's Schools Act. Congress has extended the exemption twice since 1994, in 1997 and 2001. Twenty-seven schools currently are members of the so-called Presidents' Group which utilizes this antitrust exemption. Several other colleges, including Yale and Harvard, participate as advisory members of the group. This exemption expires on September 30, 2008.
Common treatment of these types of issues makes sense and, to my knowledge, there are no complaints about the existing exemption. In fact, a recent GAO study of the exemption found that there had been no abuse of the exemption and stated that there had not been an increase in the cost of tuition as a result of the exemption. The Antitrust Modernization Commission studied this exemption and found that it provides ``limited immunity for limited conduct.'' That is, it is narrowly tailored to meet its goals of promoting access to need-based financial aid.
This bill would make the exemption passed in 1992, 1994, 1997, and 2001 permanent. It would not make any change to the substance of the exemption itself. The need-based financial aid system serves worthy 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. No student who is otherwise qualified should be denied the opportunity to go to one of the colleges involved because of the limited financial means of his or her family. This bill helps protect need-based aid and need-blind admissions.
Mr. Speaker, the last time the House considered a permanent extension of this antitrust exemption, it passed by a vote of 414-0. The bill is supported by the American Association of Community Colleges, the American Association of State Colleges and Universities, the American Council on Education, the Association of American Universities, the National Association for Independent Colleges and Universities, the National Association of State Universities and Land-Grant Colleges, and the Presidents' Group. I urge my colleagues to support this bill as well.
Finally, Mr. Speaker, I want to again thank Mr. Delahunt for his work on this legislation and for getting us to the point where it is being considered tonight.
With that, I will yield back the balance of my time.
Mr. DELAHUNT. Mr. Speaker, before yielding my time back, I want to suggest that the eloquence of the ranking member of the Judiciary Committee will result in a more significant margin this year than that 410-0. Again, I sincerely appreciate his fine work.
Mr. CONYERS. Mr. Speaker, I support the bill cosponsored by Representative Bill Delahunt and Ranking Member Lamar Smith. H.R. 1777, the ``Need-Based Educational Aid Act of 2007,'' removes the current sunset attached to an exemption in the antitrust laws that permits schools to agree to award financial aid on a need-blind basis and to use common principles of needs analysis in making their determinations.
The exemption also allows for agreement on the use of a common aid application form and for the exchange of student financial information through a third party.
In 1992, Congress passed a similar temporary exemption, which was first extended in 1994, then again extended in 1997, and once again extended in 2001. The exemption passed in 2001 expires later this year. During the years of its operation, we have been able to witness and evaluate the exemption, and we have found that it seems to be working.
The need-based financial aid system makes financial aid available to the broadest number of students solely on the basis of demonstrated need. The schools have been concerned that without this exemption, they would be required to compete--through financial aid awards--for the very top students, which could result in a system in which the very top students receive an excess of the available aid while the rest of the applicant pool receives less or none at all. Ultimately, such a system could undermine the principles of need-based aid and need-blind admissions.
Because the exemption has thus far appeared warranted, I support H.R. 1777 and hope that it will continue to protect need-based aid and need-
blind admissions, and preserve the opportunity for all students to attend one of the Nation's most prestigious schools.
Mr. DELAHUNT. I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the gentleman from Massachusetts (Mr. Delahunt) that the House suspend the rules and pass the bill, H.R. 1777, as amended.
The question was taken; and (two-thirds being in the affirmative) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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