[Congressional Record Volume 153, Number 56 (Friday, March 30, 2007)]
[Extensions of Remarks]
[Page E711]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 NEED-BASED EDUCATIONAL AID ACT OF 2007

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                            HON. LAMAR SMITH

                                of texas

                    in the house of representatives

                        Thursday, March 29, 2007

  Mr. SMITH of Texas. Madam Speaker, today I am pleased to join the 
gentleman from Massachusetts, Mr. Delahunt in introducing the ``Need-
Based Educational Aid Act of 2007.''
  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. From the 1950s to the late 1980s, the practice continued 
uncontested.
  In 1989, the Antitrust Division of the Department of Justice brought 
suit against 9 of the colleges that engaged in this practice. 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 of 1992. That temporary exemption codified 
the settlement and allowed agreements to provide aid on the basis of 
need only, to use common criteria, to use a common financial aid 
application form, and to allow the exchange of students' financial 
information through a third party. It also prohibited agreements on 
awards to specific students.
  In 1994, Congress extended this exemption as part of the Improving 
America's Schools Act. Congress has extended the exemption twice since 
1994--in 1997 and 2001. As of May 2006, twenty-eight schools utilized 
this antitrust exemption. This exemption expires on September 30, 2008.
  I believe the current exemption makes sense, and to my knowledge 
there have been no complaints about it. A recent GAO study of the 
exemption found there has been no abuse of the exemption and stated 
that there has not been an increase in the price of college as a result 
of the exemption. The Antitrust Modernization Commission, which is due 
to release its final report next week, 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.
  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 these schools because of the 
limited financial means of his or her family. This bill helps protect 
need-based aid and need-blind admissions.
  The last time a permanent extension of this antitrust exemption was 
considered by the House it passed by a vote of 414 to 0. I urge my 
colleagues to support this bill as well.

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