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From Antitrust Law Daily, July 30, 2015

[UPDATE: The “Need-Based Educational Aid Act of 2015” was signed into law on August 6.]

Renewed antitrust exemption for college financial aid collaboration awaits President's signature

By Jeffrey May, J.D.

Bipartisan legislation to extend an expiring antitrust exemption that allows colleges and universities that admit students on a need-blind basis to collaborate on the formula used to determine need-based financial aid is awaiting the approval of the President. The proposed “Need-Based Educational Aid Act of 2015” (S. 1482), which would extend the exemption for another seven years through 2022, was presented to the President on July 29. The exemption is set to expire on September 30.

Congress slightly modified the exemption, which has been in place since 1992, before passage. A provision of the existing exemption that extended the antitrust exemption to the exchange of student data through an independent third party under limited circumstances was sunsetted. According to Senator Patrick Leahy (D.-Vt.), a sponsor of the measure, that particular provision had never been used by the schools.

In remarks on the Senate’s unanimous passage of the measure on July 14, Leahy hailed the efforts to craft the limited exemption. He also questioned long-standing antitrust exemptions for industries, such as insurance.

“I would contrast the limited renewal the Senate has passed today with the McCarran-Ferguson Act, a permanent anti-trust exemption that the insurance industry has enjoyed since 1945,” Leahy said. “Requiring those who benefit from exemptions to the anti-trust laws to come to Congress and justify renewal ensures that they do not become a blank check for anti-competitive behavior.”

The House of Representatives took up the measure on July 27. It was approved the same day.

In remarks on the House floor, Rep. Lamar Smith (Tex.) said that a Government Accountability Office study had previously found that there had been no abuse of the antitrust exemption and that tuition had not gone up as a result. He added that the measure “permits multiple schools that have accepted the same student to award the same assistance. This ensures that the student selects the college that is the best fit, rather than the school that offered the most financial aid.”

MainStory: TopStory Antitrust

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