[Congressional Record Volume 147, Number 131 (Wednesday, October 3, 2001)]
[Senate]
[Pages S10252-S10253]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 NEED-BASED EDUCATIONAL AID ACT OF 2001

  Mr. REID. Madam President, I ask unanimous consent that the Judiciary 
Committee be discharged from further consideration of H.R. 768 and the 
Senate proceed to its immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the bill by title.
  The legislative clerk read as follows:

       A bill (H.R. 768) to amend the Improving America's School 
     Act of 1994 and make permanent favorable treatment of need-
     based educational aid under the antitrust laws.

  There being no objection, the Senate proceeded to consider the bill.


                           Amendment No. 1844

  Mr. REID. Madam President, I understand that Senator Kohl has a 
substitute amendment at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Kohl, proposes 
     an amendment numbered 1844.

  Mr. REID. Madam President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Need-Based Educational Aid 
     Act of 2001''.

     SEC. 2. AMENDMENT.

       Section 568(d) of the Improving America's Schools Act of 
     1994 (15 U.S.C. 1 note) is amended by striking ``2001'' and 
     inserting ``2008''.

  Mr. KOHL. Madam President, I rise today to offer a substitute 
amendment to H.R. 768. This legislation, as amended, will extend for 
seven years an existing antitrust exemption granted to colleges and 
universities that admit students on a need blind basis. The exemption 
provides protection for these schools to cooperatively develop a 
methodology for determining financial need in order to best assess a 
family's ability to pay the costs of attendance.
  There is no doubt that higher education opens doors and creates 
opportunities. It is therefore imperative that we in Congress do what 
we can to keep higher education affordable for our nation's students 
and their families. Some of the best and most prestigious colleges and 
universities admit students without regard to their financial need, 
allowing talented students from disadvantaged backgrounds to achieve 
their full potential. This exemption allows those colleges and 
universities to generate a uniform methodology to determine a family's 
need. The colleges and universities that use the exemption believe it 
allows them to attract needy students and maintain a thriving financial 
aid program.
  Discussions among colleges and universities using need-blind 
admissions policies began more than thirty years ago. However, in 1989, 
the Department of Justice filed suit against 23 colleges and 
universities alleging that their cooperation violated antitrust laws. A 
federal district court ruled that the schools were subject to the 
antitrust laws. In 1991, most of the colleges and universities settled 
with the Department of Justice with a promise to stop sharing 
information.
  Faced with the prospect of eliminating their discussions as a result 
of the settlement, the colleges and universities sought a law allowing 
them to meet. In 1992, Congress passed the original two-year antitrust 
exemption for those schools that guaranteed that their aid was need-
blind. The exemption was extended in 1994 and 1997. With the lawsuit 
and the court order so fresh in our collective memory, it seems prudent 
to extend the exemption for a reasonable length of time, but not 
indefinitely. The exemption has always been grated on the theory that 
cooperation among universities in determining financial aid need 
benefits prospective students and their families. But there is little 
if any objective data to support this proposition. So this amendment 
directs the General Accounting Office (GAO) to study the effects of the 
antitrust exemption on undergraduate grant aid. The study will require 
schools who participate in discussions under the antitrust exemption to 
maintain and submit records. While the study will be comparative, 
schools that do not participate in discussions permitted by the 
exemption will not be required to maintain or submit records.
  As a general rule, I strongly oppose antitrust exemptions. Our 
antitrust laws guarantee competition, and competition means lower 
prices and higher quality for consumers--including students purchasing 
a college education. but the colleges and universities using the 
exemption believe that the market functions differently in this case. I 
am therefore willing to extend the exemption for another seven years 
but believe that any further activity in this area must be coupled with 
hard objective data providing that this exemption does indeed benefit 
students and their families. Too many families are struggling today to 
put their children through college. So we must act very carefully and 
with full information before we pass a permanent antitrust exemption.
  I would like to thank Representatives Lamar Smith and Barney Frank 
and their staffs for their work on this legislation in the House, and 
Senators DeWine, Leahy, and Hatch and their staffs for their assistance 
on this substitute amendment. We hope the House will agree to these 
changes and expeditiously send this legislation to the President for 
his signature.
  Mr. LEAHY. Madam President, I appreciate the work that Senators Kohl 
and DeWine have done on this bill. I want to point out that while this 
bill extends the antitrust exemption for participating institutions' 
methodologies and applications for need-based financial aid, that 
exemption is still limited to the institutions' dealings with potential 
students collectively. It has not, and does not, exempt those 
institutions from the prohibitions of the

[[Page S10253]]

Sherman Act, 15 U.S.C. 1, with respect to awards to specific individual 
students. Independent of any antitrust concerns, the participating 
institutions also assure us that they do not discuss or compare awards 
for individual students, and we rely on their continuing that practice.
  Mr. REID. Madam President, I ask unanimous consent that the 
substitute amendment be agreed to, the bill be read a third time and 
passed, the motion to reconsider be laid upon the table and any 
statements relating to the bill be printed in the Record, and that the 
title amendment be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 1844) was agreed to.
  The bill (H. R. 768), as amended, was passed.
  The title was amended so as to read:

       An Act to amend the Improving America's Schools Act of 1994 
     to extend the favorable treatment of need-based educational 
     aid under the antitrust laws, and for other purposes.

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