Bill Proposes to Extend Exemption That Permits Institutions to Collaborate on Need-blind Policies

By Joan Berkes, Policy & Federal Relations Staff

A bill was introduced into the Senate on July 9 to extend for seven years the exemption of certain packaging practices from antitrust law. The Need-Based Educational Aid Act of 2015, S. 1482, would extend a provision that has been in law since 1994, known as section 568. This provision was enacted soon after the Massachusetts Institute of Technology (MIT) successfully challenged a Justice Department investigation into packaging procedures under which MIT and the Ivy League schools shared information to prevent bidding wars for highly desirable admitted students. The practice was designed to limit aid to need so that scholarship aid could be more fairly distributed to other students.

According to a statement issued by Sen. Chick Grassley, chairman of the Senate Judiciary Committee, section 568 “enables colleges and universities to collaborate on need-blind financial aid policies. By permitting certain specific activities, institutions are able to collaborate on a common formula for calculating a family’s ability to pay for college.” He explained the four specific joint practices currently allowed by section 568, which allow schools to:

  • Award financial aid to students only on the basis of demonstrated financial need;
  • Use common principles of analysis to determine financial need, so long as the agreement doesn’t restrict the independent professional judgment of financial aid officers;
  • Use common aid application forms; and
  • Engage in a one-time exchange, through an independent third party, of certain financial information submitted by students and their families.

Upon examination of this provision, the Committee found that the fourth bullet above is not actually used by institutions, and so it has been eliminated in the bill.

Sen. Grassley’s statement points out that: “By allowing financial aid professionals to work together in these ways, section 568 provides increased access to higher education to low-income students, while preventing needless litigation over the development of principles for determining financial need.”

NASFAA will continue to track the progress of S. 1482.


Publication Date: 7/13/2015

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