[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[House]
[Pages 7345-7347]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1900
                 NEED-BASED EDUCATIONAL AID ACT OF 2008

  Mr. DELAHUNT. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1777) 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, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1777

       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 2008''.

     SEC. 2. AMENDMENT.

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     Schools Act of 1994 (15 U.S.C. 1 note) is repealed.

  The SPEAKER pro tempore (Mr. Loebsack). Pursuant to the rule, the 
gentleman from Massachusetts (Mr. Delahunt) and the gentleman from 
Texas (Mr. Smith) each will control 20 minutes.
  The Chair recognizes the gentleman from Massachusetts.


                             General Leave

  Mr. DELAHUNT. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. DELAHUNT. Mr. Speaker, I yield myself such time as I may consume.
  First, I want to thank the Chair of the Judiciary Committee for 
allowing this important piece of legislation to move forward. I 
particularly want to thank the ranking member of the Judiciary 
Committee, Mr. Lamar Smith, for the opportunity to work with him on 
this significant legislation and for his outstanding work on this issue 
throughout the year.
  The Need-Based Educational Aid Act of 2008, as its name suggests, is 
aimed at making college more affordable and accessible to qualified 
students, something that this Congress has repeatedly shown its 
commitment to. With overwhelming bipartisan majorities, we have passed 
such legislation as the College Cost Reduction and Access Act, and just 
last week, the Ensuring Continued Access to Student Loans Act. We have 
also increased transparency in the higher educational financial aid 
system by passing the Student Loan Sunshine Act.
  H.R. 1777 will further that commitment to enhance educational 
opportunities. These successes are rooted in clear recognition on both 
sides of the aisle that access to higher education is vital to our 
national economy and central to America's promise.
  However, the Need-Based Educational Act differs from those bills I 
just enumerated in two important aspects. First, this bill addresses 
institutional aid only. That is, aid provided to students from a 
college or university's own funds, not Federal dollars. Second, this 
bill is about increasing access to grants, as opposed to loans. Given 
the current cost of higher education, the financial sacrifices families 
make to send their children to college, and the amount students owe 
when they graduate, grants, as opposed to loans, play a vital and 
unique role in maintaining access to higher education.
  This act will permanently extend the current antitrust exemption for 
colleges and universities that admit all students on a need-blind 
basis, without regard to a student's ability to pay, and provide 
institutional aid that is strictly need-based. This safe harbor from 
the antitrust laws allows two or more of these schools to agree on a 
common aid application in a common system of analysis of financial 
need, and to exchange information on commonly admitted students. It 
does not permit discussion or comparison of institutional awards for 
individual students. The current exemption expires on September 30 of 
this year.
  Why is this bill necessary? Beginning in the 1950s, a substantial 
number of our most prestigious private colleges and universities agreed 
to award institutional financial aid to students solely on the basis of 
demonstrated financial need. The schools recognized that,

[[Page 7346]]

without such an agreement, and without a uniform analysis of ``need,'' 
the schools would spend all of their money competing with each other to 
offer the largest aid package to a small select group of elite 
students. As a practical matter, the schools would be unable to fill 
the available spots in each incoming class because the select top 
students, who may or may not need such aid, were few in number. In 
addition, though, there would be many highly meritorious students who 
would be forced to forego their admission because of limited economic 
circumstances and insufficient financial aid.
  The schools' decision was made in service of a social goal that the 
antitrust laws do not address, namely, making financial aid available 
to the broadest pool of students solely on the basis of demonstrated 
financial need. Congress responded quickly, passing the first temporary 
antitrust exemption in 1992, and we have reauthorized the exemption 
three times, each time improving and extending the exemption over the 
previous iteration.
  The current exemption allows the schools to agree on this system of 
need-blind admissions and need-based aid, and allows a one-time 
exchange of student financial information through a third party. 
However, any further information-sharing is prohibited.
  Since the last extension, both the GAO and the Antitrust 
Modernization Commission have examined the exemption and have found it 
consistent with antitrust principles. The schools themselves have 
lauded the exemption for increasing access to need-based aid and for 
bringing greater transparency to financial aid allocations. However, 
without this safe harbor, the schools fear that their collaboration on 
financial aid policies would subject them to prosecution.
  Many studies show that our Nation's poorest students benefit the most 
from attendance at a prestigious school and, conversely, stand to lose 
the most from lack of access. Fortunately, these schools were empowered 
to continue and expand upon this truly American ideal that no 
individual should be denied a real chance to succeed because he or she 
was born poor.
  I urge my colleagues to join myself and Mr. Smith in passing the 
Need-Based Educational Aid Act.
  I reserve the balance of my time.
  Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, first of all, I am glad we are considering this timely 
legislation tonight, H.R. 1777, the Need-Based Educational Aid Act of 
2008. I also want to thank the gentleman from Massachusetts (Mr. 
Delahunt) for his tireless efforts in promoting this legislation, and 
also for his leadership, because if it were not for his leadership, we 
would not be here tonight considering this important bill. It was good 
working with him and I appreciate the success that he has had in 
getting us to this point. This issue has long been of interest to me 
personally as well. I also sponsored the bill that extended the 
exemption in 1997 and 2001.
  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. In the 1950s to the late 1980s, the practice continued.
  In 1989, the Antitrust Division of the Department of Justice brought 
suit against nine of the colleges. 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. 
That temporary exemption codified the settlement and allowed colleges 
to provide aid on the basis of need only, to use common criteria to 
determine need, to use a common financial aid application form, and to 
allow the exchange of the student's financial information through a 
third party.
  In 1994, Congress extended this exemption as section 568 of the 
Improving America's Schools Act. Congress has extended the exemption 
twice since 1994, in 1997 and 2001. Twenty-seven schools currently are 
members of the so-called Presidents' Group which utilizes this 
antitrust exemption. Several other colleges, including Yale and 
Harvard, participate as advisory members of the group. This exemption 
expires on September 30, 2008.
  Common treatment of these types of issues makes sense and, to my 
knowledge, there are no complaints about the existing exemption. In 
fact, a recent GAO study of the exemption found that there had been no 
abuse of the exemption and stated that there had not been an increase 
in the cost of tuition as a result of the exemption. The Antitrust 
Modernization Commission 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 itself. 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 the colleges involved 
because of the limited financial means of his or her family. This bill 
helps protect need-based aid and need-blind admissions.
  Mr. Speaker, the last time the House considered a permanent extension 
of this antitrust exemption, it passed by a vote of 414-0. The bill is 
supported by the American Association of Community Colleges, the 
American Association of State Colleges and Universities, the American 
Council on Education, the Association of American Universities, the 
National Association for Independent Colleges and Universities, the 
National Association of State Universities and Land-Grant Colleges, and 
the Presidents' Group. I urge my colleagues to support this bill as 
well.
  Finally, Mr. Speaker, I want to again thank Mr. Delahunt for his work 
on this legislation and for getting us to the point where it is being 
considered tonight.
  With that, I will yield back the balance of my time.
  Mr. DELAHUNT. Mr. Speaker, before yielding my time back, I want to 
suggest that the eloquence of the ranking member of the Judiciary 
Committee will result in a more significant margin this year than that 
410-0. Again, I sincerely appreciate his fine work.
  Mr. CONYERS. Mr. Speaker, I support the bill cosponsored by 
Representative Bill Delahunt and Ranking Member Lamar Smith. H.R. 1777, 
the ``Need-Based Educational Aid Act of 2007,'' removes the current 
sunset attached to 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 for the exchange of student financial information 
through a third party.
  In 1992, Congress passed a similar temporary exemption, which was 
first extended in 1994, then again extended in 1997, and once again 
extended in 2001. The exemption passed in 2001 expires later this year. 
During the years of its operation, we have been able to witness and 
evaluate the exemption, and we have found that it seems to be working.
  The need-based financial aid system makes financial aid available to 
the broadest number of students solely on the basis of demonstrated 
need. The schools have been concerned that without this exemption, they 
would be required to compete--through financial aid awards--for the 
very top students, which could result in a system in which the very top 
students receive an excess of the available aid while the rest of the 
applicant pool receives less or none at all. Ultimately, such a system 
could undermine the principles of

[[Page 7347]]

need-based aid and need-blind admissions.
  Because the exemption has thus far appeared warranted, I support H.R. 
1777 and hope that it will continue to protect need-based aid and need-
blind admissions, and preserve the opportunity for all students to 
attend one of the Nation's most prestigious schools.
  Mr. DELAHUNT. I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Massachusetts (Mr. Delahunt) that the House suspend the 
rules and pass the bill, H.R. 1777, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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