WASHINGTON – The Senate Judiciary Committee this week unanimously cleared bipartisan legislation to extend an expiring antitrust exemption that allows certain colleges and universities to collaborate on issues of need-based financial aid. The legislation, introduced last month by Chairman Chuck Grassley, Ranking Member Patrick Leahy and Senator Mike Lee, now goes before the full Senate for Consideration.
The Need-Based Educational Aid Act of 2015 extends the antitrust exemption, which allows colleges and universities to collaborate on the formula they use to determine a family’s ability to pay for college. In addition, the antitrust exemption permits higher education institutions to agree to award aid only on the basis of financial need and use a common application for aid. By allowing financial aid professionals to work together in these ways, the exemption helps ensure that the colleges and universities covered by this section of the law admit students without regard to ability to pay. It also prevents needless litigation over the development of principles for determining financial need. This exemption was first enacted in 1994, and has been reauthorized by Congress three times without opposition, most recently in 2008. A 2006 Government Accountability Office report found that the activities permitted by the exemption have not resulted in harm to competition.
The legislation passed in committee by voice vote. The reauthorization is needed because the current exemption expires in September. The House Judiciary Committee approved an identical version of the bipartisan legislation earlier this week.
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