[Congressional Record Volume 147, Number 152 (Tuesday, November 6, 2001)]
[House]
[Pages H7730-H7732]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NEED-BASED EDUCATIONAL AID ACT OF 2001
Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and
concur in the Senate amendments to the bill (H.R. 768) 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.
The Clerk read as follows:
Senate amendments:
Strike out all after the enacting clause and insert:
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''.
SEC. 3. GAO STUDY AND REPORT.
(a) Study.--
(1) In general.--The Comptroller General shall conduct a
study of the effect of the antitrust exemption on
institutional student aid under section 568 of the Improving
America's Schools Act of 1994 (15 U.S.C. 1 note).
(2) Consultation.--The Comptroller General shall have final
authority to determine the content of the study under
paragraph (1), but in determining the content of the study,
the Comptroller General shall consult with--
(A) the institutions of higher education participating
under the antitrust exemption under section 568 of the
Improving America's Schools Act of 1994 (15 U.S.C. 1 note)
(referred to in this Act as the ``participating
institutions'');
(B) the Antitrust Division of the Department of Justice;
and
(C) other persons that the Comptroller General determines
are appropriate.
(3) Matters studied.--
(A) In general.--The study under paragraph (1) shall--
(i) examine the needs analysis methodologies used by
participating institutions;
(ii) identify trends in undergraduate costs of attendance
and institutional undergraduate grant aid among participating
institutions, including--
(I) the percentage of first-year students receiving
institutional grant aid;
(II) the mean and median grant eligibility and
institutional grant aid to first-year students; and
(III) the mean and median parental and student
contributions to undergraduate costs of attendance for first
year students receiving institutional grant aid;
(iii) to the extent useful in determining the effect of the
antitrust exemption under section 568 of the Improving
America's Schools Act of 1994 (15 U.S.C. 1 note), examine--
(I) comparison data, identified in clauses (i) and (ii),
from institutions of higher education that do not participate
under the antitrust exemption under section 568 of the
Improving America's Schools Act of 1994 (15 U.S.C. 1 note);
and
(II) other baseline trend data from national benchmarks;
and
(iv) examine any other issues that the Comptroller General
determines are appropriate, including other types of aid
affected by section 568 of the Improving America's Schools
Act of 1994 (15 U.S.C. 1 note).
(B) Assessment.--
(i) In general.--The study under paragraph (1) shall assess
what effect the antitrust exemption on institutional student
aid has had on institutional undergraduate grant aid and
parental contribution to undergraduate costs of attendance.
(ii) Changes over time.--The assessment under clause (i)
shall consider any changes in institutional undergraduate
grant aid and parental contribution to undergraduate costs of
attendance over time for institutions of higher education,
including consideration of--
(I) the time period prior to adoption of the consensus
methodologies at participating institutions; and
(II) the data examined pursuant to subparagraph (A)(iii).
(b) Report.--
(1) In general.--Not later than September 30, 2006, the
Comptroller General shall submit a report to the Committee on
the Judiciary of the Senate and the Committee on the
Judiciary of the House of Representatives that contains the
findings and conclusions of the Comptroller General regarding
the matters studied under subsection (a).
(2) Identifying individual institutions.--The Comptroller
General shall not identify an individual institution of
higher education in information submitted in the report under
paragraph (1) unless the information on the institution is
available to the public.
(c) Recordkeeping Requirement.--
(1) In general.--For the purpose of completing the study
under subsection (a)(1), a participating institution shall--
(A) collect and maintain for each academic year until the
study under subsection (a)(1) is completed--
(i) student-level data that is sufficient, in the judgment
of the Comptroller General, to permit the analysis of
expected family contributions, identified need, and
undergraduate grant aid awards; and
(ii) information on formulas used by the institution to
determine need; and
(B) submit the data and information under paragraph (1) to
the Comptroller General at such time as the Comptroller
General may reasonably require.
(2) Non-participating institutions.--Nothing in this
subsection shall be construed to require an institution of
higher education that does not participate under the
antitrust exemption under section 568 of the Improving
America's Schools Act of 1994 (15 U.S.C. 1 note) to collect
and maintain data under this subsection.
SEC. 4. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take
effect on September 30, 2001.
Amend the title 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.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Wisconsin (Mr. Sensenbrenner) and the gentleman from Massachusetts (Mr.
Frank) each will control 20 minutes.
The Chair recognizes the gentleman from Wisconsin (Mr.
Sensenbrenner).
General Leave
Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days
[[Page H7731]]
within which to revise and extend their remarks and include extraneous
material on H.R. 768.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
{time} 1415
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, today the House will send to the President for his
signature H.R. 768, the Need-Based Educational Aid Act of 2001. This
bill was introduced by the gentleman from Texas (Mr. Smith) and the
gentleman from Massachusetts (Mr. Frank), and I appreciate their hard
work on this issue.
Mr. Speaker, beginning in the mid-1950s, a number of prestigious
private colleges and universities agreed to award institutional
financial aid, that is, aid from the schools' own funds, solely on the
basis of demonstrated financial need. These schools also agreed to use
common principles to assist 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 1950s through the late 1980s, 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 final
settlement in 1993.
In 1994, Congress passed a temporary exemption from the antitrust
laws that basically codified the settlement. It allowed agreements to
provide aid on the basis of need only, to use common principles of need
analysis, to use a common financial aid application form, and to allow
the exchange of the students' financial information through a third
party. It also prohibited agreements on award to specific students. It
provided for this exemption to expire on September 30, 1997. That year,
Congress extended the exemption until September 30, 2001.
Under this exemption, the affected schools have adopted a set of
general principles to determine eligibility for institutional aid.
These principles address issues like expected contribution from
noncustodial parents, treatment of depreciation expenses that may
reduce a parent's income, valuation of rental properties, and unusually
high medical expenses. Common treatment of these types of issues make
sense, and to my knowledge, the existing exemption has worked well.
The need-based financial aid system serves 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, to the very top students. Those very top students
would get all 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 principle of need-based aid and need-blind
admissions.
No student who is otherwise qualified ought to be denied the
opportunity to attend one of the Nation's most prestigious schools
because of the financial situation of his or her family. H.R. 768 will
help protect need-based aid and need-blind admissions and preserve that
opportunity.
Mr. Speaker, unlike the original House bill, which permanently
extended the 1994 exemption, the Senate amendment to H.R. 768 would
extend the exemption for another 7 years, and it also directs the
General Accounting Office to review the exemption. It would not make
any change to the substance of the exemption. I urge my colleagues to
support this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. FRANK. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I want to express my appreciation to the chairman of the
full committee for so diligently staying on this and bringing this
forward. I want to express my particular appreciation to the gentleman
from Texas, who has now joined us, who has been one of the leaders in
making sure that we do this.
The gentleman from Wisconsin has explained this very well, and I just
want to underline a few points. It seemed to me at the time a great
misfortune and irony that the Justice Department was seeking to invoke
the antitrust law against the universities that were engaged in this
practice. It is one of the most socially responsible things that they
do.
Essentially, what we have are among the most prestigious universities
in the country, which people are eager to go to, saying that they
believe they have an obligation in spending scholarship money to
maximize the extent to which scholarship money enables poor or
moderate-income young people to attend. The sole purpose of this whole
enterprise is to extend the reach of scholarship aid based on need. For
that to have been challenged on antitrust grounds seemed to me at the
time a grave error.
I am delighted to have been able to work all this time, particularly
with the gentleman from Texas, to go to the aid of universities that
are trying to do the right thing. What this says is that the
universities can exchange information and they can share information;
not to raise prices, not to pay less to suppliers, not to do any of the
things that the antitrust law is aimed at preventing, but rather, to
maximize the extent to which financial aid goes to the young people who
need it.
There is a great deal of controversy in our government about the
extent to which, when the government is acting, we can take into
account compensatory and other factors. Here we have the ideal
situation. All of these institutions are wholly private institutions.
They are not constrained by the various rules that government needs to
follow. They have done this voluntarily, and I am very pleased that,
over time, the number of institutions has expanded. I am proud to
represent one of them, Wellesley College from Wellesley, Massachusetts.
They have volunteered to take on extra work among themselves so as not
to diminish the pool of scholarship funds available to those who are
needy, and I think that is something well worth doing.
Now, I know an amendment has come back from the Senate calling for a
GAO study. We are not in the process of amendment here; we are in
suspension. If we were in a situation where amendments were in order, I
think I would be tempted in this case to offer the amendment that I
once offered in the Committee on Financial Services; namely, that any
Member of Congress who offers an amendment requiring a study be
required to read that study when it is completed and take a public exam
on its contents, because we have this tendency to burden people with
compiling studies that no one, including us, ever reads. I myself do
not think in this case the study is necessary, and I think it burdens
universities, who are trying to do a good thing, with excess work. But
that is the price of getting this bill passed. It is a fairly small
price to pay for an important piece of legislation that does advance an
important social goal.
I salute the universities and, again, I want to express my gratitude
to the two gentlemen from the majority side for the work they have done
in bringing this forward.
Mr. Speaker, I reserve the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself 1 minute.
Mr. Speaker, let it be clear that this exemption expired on October
1, and if the exemption is not reinstated and continued, well-endowed
private colleges and universities, the gentleman from Massachusetts has
several in his State, and I am a graduate of one of them, and the
gentleman from Texas is also a graduate of one of them, will basically
be able to use their superior financial resources to buy out the best
students, generally by giving them more money than they really need for
financial aid, even though the tuition at these colleges and
universities is pretty steep.
By passing this bill and by reinstating the exemption, there will be
more money to go around to more good students and to open the doors to
these well-endowed, prestigious private colleges and universities to
more people to be able to go there.
Mr. Speaker, at this time I yield such time as he may consume to the
gentleman from Texas (Mr. Smith).
[[Page H7732]]
Mr. SMITH of Texas. Mr. Speaker, first I would like to thank the
chairman of the committee for yielding me time. I would also like to
thank the gentleman from Massachusetts (Mr. Frank) for his earlier
generous comments.
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 the group.
In 1989, the Antitrust Division of the Department of Justice brought
suit against nine of the colleges that engage in this practice. After
extensive litigation, the parties reached a settlement in 1993.
In 1994 and again in 1997, Congress passed a temporary exemption from
the antitrust laws that codified that settlement. It allowed agreements
to provide aid on the basis of need only, use common criteria, use a
common financial aid application form, and allow the exchange of the
student's financial information through a third party. It also
prohibited agreements on awards to specific students. The exemption
expired, as the chairman just noted a minute ago, on September 30,
2001.
To my knowledge, there are no complaints about the exemption. H.R.
768 would extend the exemption passed in 1994 and 1997 for 7 more
years.
The need-based financial aid system serves 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 a private, selective university because of the
limited financial means of his or her family. H.R. 768 will help
protect need-based aid and need-blind admissions.
Last April we approved a permanent extension by an overwhelming
margin of 414 to zero. However, the Senate has approved only a 7-year
extension. They also call for the General Accounting Office to study
the effects of the exemption and to submit a report in 5 years. If the
GAO chooses to examine a comparison group of schools for the study,
participation in the group would be voluntary. It is this version that
we vote upon today.
Mr. Speaker, I still believe that a permanent exemption from the
antitrust laws is justified and warranted. However, in the interest of
time, the House should accept the changes made by the Senate, and I
urge my colleagues to support this bill.
Mr. FRANK. Mr. Speaker, I yield back the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Culberson). The question is on the
motion offered by the gentleman from Wisconsin (Mr. Sensenbrenner) that
the House suspend the rules and concur in the Senate amendments to the
bill, H.R. 768.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________