[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[House]
[Pages 5333-5335]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 NEED-BASED EDUCATIONAL AID ACT OF 2001

  Mr. SENSENBRENNER. Madam Speaker, I move to suspend the rules and 
pass 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:

                                H.R. 768

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

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

     SEC. 2. AMENDMENTS.

       Section 568(d) of the Improving America's Schools Act of 
     1994 (15 U.S.C. 1 note) is repealed.

  The SPEAKER pro tempore (Mrs. Emerson). Pursuant to the rule, the 
gentleman from Wisconsin (Mr. Sensenbrenner) and the gentleman from 
Michigan (Mr. Conyers) each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).


                             General Leave

  Mr. SENSENBRENNER. Madam Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and to include extraneous material on H.R. 768, the bill 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, today the House considers 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). It makes permanent an antitrust exemption that allows 
universities to agree on common standards of need when awarding 
financial aid.
  This exemption has been passed on a temporary basis several times 
without controversy, and the current version is set to expire at the 
end of September. It appears to be working well, and I am hopeful that 
it now can be made permanent.

[[Page 5334]]

  In a moment the sponsors of the bill, the gentleman from Texas (Mr. 
Smith) and the gentleman from Massachusetts (Mr. Frank), will seek time 
for a further explanation. I appreciate their work on this bill.
  Madam Speaker, I reserve the balance of my time.
  Mr. CONYERS. Madam Speaker, I yield myself such time as I may 
consume. I wanted to thank the author of the bill, the gentleman from 
Massachusetts (Mr. Frank), who was last seen leaving the floor, and I 
want to yield him some time because I do not think this is going to 
take long.
  What we were doing for many years on need-based educational aid 
assistance was passing temporary exemptions to the antitrust act. It 
worked fine. And now we have decided to permanentize it, thanks to the 
efforts of the gentleman from Massachusetts and as well as the 
gentleman from Texas.
  It is a great piece of legislation, and it represented probably the 
most vigorous high point of antitrust enforcement during the Bush, 
Senior, administration on record.
  I rise in support of H.R. 768, the ``Need-Based Educational Aid Act 
of 2001.'' This bipartisan bill would make permanent an exemption in 
the antitrust laws that permits schools to agree to award financial aid 
on a need-blind basis and to use common principles of needs analysis in 
making their determinations.
  The exemption also allows for agreement on the use of a common aid 
application form and the exchange of the student's financial 
information through a third party.
  In 1992, Congress passed a similar temporary exemption, which was 
extended in 1994, and again extended in 1997. The exemption passed in 
1997 expires later this year. During the almost ten years of its 
operation, we have been able to witness and evaluate the exemption, and 
we have found that it has worked well.
  The need-based financial aid system serves important social goals 
that the antitrust laws do not adequately address--such as 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, for the very top 
students.
  The result would be that the very top students would get all of the 
aid available, which would be more than they need. The rest of the 
applicant pool would get less or none at all. Ultimately, such a system 
would undermine the principles of need-based aid and need-blind 
admissions which are so important to achieving educational equality.
  No student who is otherwise qualified ought to be denied the 
opportunity to go to 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.
  Madam Speaker, I yield such time as he may consume to the gentleman 
from Massachusetts (Mr. Frank) for any comments he would like to make.
  Mr. FRANK. Madam Speaker, I thank the ranking member for yielding me 
this time. I want to express my appreciation to the gentleman from 
Texas (Mr. Smith) for moving on this so expeditiously and to the 
chairman of the committee.
  For people to understand this, briefly, we had a situation in which 
the Ivy League schools, MIT and a few others, formed what they called 
the overlap group. The purpose was, given that they have limited 
resources to give out in scholarships, and obviously there is not an 
infinite amount of money for universities, even wealthy ones, to give 
out scholarships, they wanted to avoid the situation where they 
competed for desirable students who were not financially in great 
distress, because that would have taken money away from the pool 
available to help young people go to school who might not otherwise be 
able to.
  Many of these schools strive to achieve what they call a needs-blind 
admission policy, or at least they used to the last time I talked. 
Maybe there is a new euphemism. But what it meant was that they strove 
to admit young men and women based on their ability to do the work of 
that school, and then, having admitted them, endeavored to make sure 
they could afford it financially by some package of financial aid from 
the university itself, loans, work study, Federal aid, et cetera.
  The overlap group was an effort to maximize the resources that could 
go to the students in need, and I regard that as one of the most 
socially responsible things universities did. The Justice Department 
challenged it. Particular credit, in my judgment, goes to Massachusetts 
Institute of Technology, which declined to go along. Some of the other 
colleges thought, oh, well, the Justice Department is coming after us, 
we better just drop this. MIT, to its credit, said, no, we will go to 
court and litigate this.
  During the litigation all parties then agreed to a settlement, and 
essentially this is the legislation that embodies the settlement, which 
allows some of what they used to do. It does not allow it all. If it 
were up to me, I would have restored totally what they were able to do. 
This is not a complete restoration of the overlap group, but it is a 
substantial restoration of their legal authority to be socially 
responsible.
  We are not talking now about government money, now, but their private 
funds. What this does is allow them to try better to target the private 
scholarship money available to them so that it goes to help bright 
students who are capable of doing the work at these first-rate 
universities, but unable to finance it and attend the universities.
  I think that is a goal all of us in this Chamber agree with, and I 
am, therefore, glad to be in support of this legislation.
  Mr. CONYERS. Madam Speaker, I yield myself such time as I may consume 
to add that the previous speaker went to Harvard, and the cosponsor of 
the bill went to Yale, and so their contributions are very important, 
and they did not participate in any of this funding.
  Mr. FRANK. Madam Speaker, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Massachusetts.
  Mr. FRANK. It was MIT that was the real hero of this, and to whom I 
think credit should be given.
  Mr. CONYERS. Madam Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Madam Speaker, as one who went to the University 
of Wisconsin, Madison, that has much better football and basketball 
teams than either Harvard or Yale, I yield 4 minutes to the gentleman 
from Texas (Mr. Smith).
  Mr. SMITH of Texas. Madam Speaker, I thank the chairman of the full 
committee for yielding me this time, and, Madam Speaker, I am going to 
go in a little more detail about the history of this bill and the 
necessity for it.
  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 
undisturbed.
  In 1989, the Antitrust Division of the Department of Justice brought 
suit against nine of the colleges involved that engaged 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, to use 
common criteria, to use a common financial aid application form, and to 
allow the exchange of the student's financial information through a 
third party. It also prohibited agreements on awards to specific 
students. This exemption expires on September 30, 2001.
  Common treatment of these types of issues makes sense, and to my 
knowledge there are no complaints about the existing exemption. H.R. 
768 would make the exemption passed in 1994 and 1997 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

[[Page 5335]]

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. H.R. 768 would help protect need-
based aid and need-blind admissions.
  Madam Speaker, this legislation passed the Committee on the Judiciary 
with no opposition, and I urge my colleagues to support this bill as 
well.
  Mr. CONYERS. Madam Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Madam Speaker, I yield back the balance of my 
time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Wisconsin (Mr. Sensenbrenner) that the House suspend the 
rules and pass 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. Madam 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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