[Congressional Record Volume 144, Number 124 (Thursday, September 17, 1998)]
[Senate]
[Page S10520]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FAIRCLOTH:
  S. 2490. A bill to prohibit postsecondary educational institutions 
from requiring the purchase of goods and services from on-campus 
businesses, intentionally withholding course information from off-
campus businesses, or preventing students from obtaining course 
information or materials from off-campus businesses; to the Committee 
on Labor and Human Resources.


                 the college costs savings act of 1998

 Mr. FAIRCLOTH. Mr. President, this fall millions of college 
students are returning to campus. Today I introduce legislation that 
will ease the financial burden for these students, and reduce the costs 
of student financial aid on the taxpayers.
  My bill seeks to inject some good, old-fashioned competition in the 
market for the purchase of college textbooks. Every student knows that 
the costs of textbooks can run into hundreds of dollars. It has become 
a major expense for most college students. My bill would bar financial 
aid to any university or any student attending a university that, 
directly or indirectly, requires students to purchase textbooks 
exclusively on campus. Further, the legislation would require that non-
campus businesses have reasonable access to the textbook requirements 
of college courses, so that they too could stock textbooks and have 
them available to students at a more competitive price.
  Regrettably, the way aid is currently disbursed by the Department of 
Education is artificially raising costs for students throughout the 
country. There is a nationwide use of financial aid to, in effect, 
channel funds exclusively to college ``business-like'' enterprises. 
These funding methods prevent financial aid from being spent at small 
businesses attempting to compete in the campus area marketplace.
  Through the use of Department of Education-permitted ``student 
accounts,'' colleges are creating their own dominance in such areas as 
college bookstores. Off-campus choice is virtually unavailable, even if 
off-campus stores offer students a less-expensive alternative. With the 
development of ``campus cards,'' aid is even more captive to the on-
campus economy.
  I raised this issue with Secretary Riley at a hearing this spring and 
through a subsequent letter. The Department claims such distribution of 
aid funds is voluntary. The Department of Education stated in its June 
22nd response that off-campus businesses can accept these campus cards 
only if an institution ``wishes to establish a business relationship 
with an off-campus business.'' In most cases, that is not their wish. 
In most cases, only on-campus enterprises benefit. The Congress never 
intended financial aid funds--or any other funds--to be used for 
purposes of monopolization on college campuses. Competition in the 
campus-area marketplace is being restricted--and in many cases--
eliminated. Students have little to no choice in shopping for books and 
materials.
  The net result is that students are often paying higher costs for 
these goods and services, like textbooks. And, the federal government, 
providing student aid, is paying the higher price too.
  There isn't a college student in this country that does not think 
that textbooks cost too much. Buying course books has become a major 
expense for the vast majority of students.
  Evidence shows that off-campus bookstores are generally less-
expensive if students receiving financial aid had full access to them. 
A recent report of the National Association of College Stores 
(``NACS'') reports that each student spends an average of $300 for new 
textbooks at an on-campus bookstore compared with less than $200 for 
textbook purchases at an off-campus bookstore.
  Additionally, another unfair practice that I have been informed about 
is that some institutions refuse or obstruct access by off-campus 
college bookstores to the titles of textbooks required by the teaching 
staff. This legislation addresses both of these problems.
  Further, I believe we should be taking any reasonable steps that we 
can to reduce the cost of attending college. A 1998 Congressional 
Commission on the Cost of Higher Education Report tells us that America 
has a ``college cost crisis.'' It found that 71 percent of the public 
believes that a four-year education is not affordable for most 
Americans. Clearly, people are concerned about the ever-growing costs 
of higher education.
  This legislation could save every student hundreds of dollars a year 
in college costs, if we can promote greater free market competition in 
the sale of college textbooks. As for financial aid, if this 
legislation can only save one percent of the amount that is spent on 
financial aid, it would approximate a $500 million savings.
  Clearly parents, students and the federal government could use this 
kind of financial relief. Mr. President, I would urge my colleagues to 
support this legislation.
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