[Congressional Record (Bound Edition), Volume 147 (2001), Part 15]
[House]
[Pages 21678-21680]
[From the U.S. 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

[[Page 21679]]

Members may have 5 legislative days 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

[[Page 21680]]

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).
  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.

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