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Poor Print Quality DOCUMENT RESUME ED 435 267 HE 032 485 TITLE Can Small Business Compete with Campus Bookstores? Hearing before the Committee on Small Business, United States Senate, One Hundred Fifth Congress, Second Session. INSTITUTION Congress of the U.S., Washington, DC. Senate. REPORT NO Senate-Hrg-105-784 ISBN ISBN-0-16-057913-9 PUB DATE 1999-09-24 NOTE 191p. AVAILABLE FROM U.S. Government Printing Office, Superintendent of Documents, Congressional Sales Office, Washington, DC 20402. PUB TYPE Legal/Legislative/Regulatory Materials (090) EDRS PRICE MF01/PC08 Plus Postage. DESCRIPTORS *Bookstores; Business Administration; *College Stores; *Competition; Entrepreneurship; Federal Aid; Federal Legislation; Hearings; Higher Education; *Small Businesses; Student Financial Aid IDENTIFIERS Congress 105th ABSTRACT This transcript records testimony concerning Senate Bill 2490 which would bar federal aid from being used at colleges that directly or indirectly discriminate against off-campus businesses. The bill responds to difficulties small businesses have in competing with college campus bookstores due to the ability of colleges to channel student financial aid to college businesses and college bookstores. Following opening statements by Senators Lauch Faircloth and Olympia J. Snowe, the transcript presents the full testimonies of the following individuals: Graham Gillette, on behalf of Campus Bookstores, Inc.; William D. Gray, president of Gray's College Bookstore and national chairman of the Campus Area. Small Business Alliance; Rob Karr, representing the Illinois Retail Merchants Association, and Anthony Samu, president:of the United States Student Association. Also included are comments for the record from: John-Paul de Bernardo, of Campus Area Small Business Alliance; Daniel Lieberman, of Dynamic Student Services; David Longanecker, of the Office. of Postsecondary EducatiOn, U.S. Department of Education; and Richard C. Yount, Loupots Bookstores of Houston, Inc. (DB) ENTIRE DOCUMENT: POOR PRINT QUALITY Reproductions supplied by EDRS are the best that can be made from the original document. P S. HRG. 105-784 CAN SMALL BUSINESS COMPETE WITH CAMPUS BOOKSTORES? HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES SENATE ONE HUNDRED FIFTH CONGRESS SECOND SESSION SEPTEMBER 24, 1998 U.S. DEPARTMENT OF EDUCATION Office of Educational Research and Improvement EDUCATIONAL RESOURCES INFORMATION CENTER (ERIC) 42 This document has been reproduced as received from the person or organization originating it. Minor changes have been made to improve reproduction quality. Points of view or opinions stated in this document do not necessarily represent official OERI position cr policy. Printed for the Committee on Small Business U.S. GOVERNMENT PRINTING OFFICE 52-290 cc WASHINGTON :.1998 For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 ISBN 0-16-057913-9 2 BEST COPYAVAILABLE .COMMITTEE ON SMALL BUSINESS CHRISTOPHER S. BOND, Migiogii, Chairman CONRAD BURNS, Montana JOHN F. KERRY, Massachusetts PAUL COVERDELL, Georgia DALE BUMPERS, Arkansas DIRK ICEMFTHORNE, Idaho CARL LEVIN, Michigan ROBERT F. BENNETT, Utah TOM HARKIN, Iowa JOHN. W. WARNER, Virginia JOSEPH I. LIEBERMAN, Connecticut BILL FRIST, Tennessee PAUL D. WELLSTONE, Minnesota OLYMPIA J. SNOWE, Maine MAX CLELAND, Georgia LAUCH FAIRCLOTH, North Carolina MARY LANDRIEU, Louisiana MICHAEL ENZI, Wyoming ,PAUL H. COOKSEY, Chief Counsel PATRICIA R. FORBES, Democratic Staff Director CONTENTS OPENING STATEMENTS Page Faircloth, The Honorable Lauch, a United States Senator from North Caro- . lina 1 Snowe, The Honorable Olympia J., a United States Senator from Maine 4 WITNESS TESTIMONY Gillette,' Graham, president, Pinnacle Communications, LLC, Des Moines, Iowa, on behalf of Campus Bookstores, Inc., Ames, Iowa 2 Gray, William D.D., pfesid-ent, Gray's College Bookstore, and National Chair- man, Campus Small Business Affiance, Charlotte, North Carolina 6 Karr, Rob, vice-president, government and member relations, Illinois Retail Merchants Association, Chicago, Illinois 122 . Samu, Anthony, president, Muted States Student Association, Washington, D:C. 131 ALPHABETICAL LISTING Faircloth, The Honorable La.uch Opening statement 1 Gillette, Graham Testimony 2 Gray, William D Testimony 6 Prepared statement and attachments 9 Karr, Rob Testimony 122 . Prepared statement and attachments 125 Samu, Anthony Testimony 131 Prepared statement 133 Snowe, The Honorable Olympia J. Prepared statement 4 COMMENTS FOR THE RECORD de Bernardo, John-Paul, Counsel, Campus Area Small Business Alliance, letter and attachments 144 Lieberman, Daniel, founder & partner, Dynamic Student Services, West Ches- ter, Pennsylvania, statement and attachments 147 Longanecker, assistant secretary, office of postsecondary education, U.S. De- partment of Education, Washington, D.C., statement 180 Yount, Richard C., counsel, Loupots Bookstores of Houston, Inc., Houston, Texas, letter 181 (m) CAN SMALL BUSINESSES COMPETE WITH CAMPUS BOOKSTORES? THURSDAY, SEPTEMBER 24, 1998 UNITED STATES SENATE, COMMITTEE ON SMALL BUSINESS, Washington, D.C. The Committee met, pursuant to notice, at 10:09 a.m., in room 428-A, Russell Senate Office Building, the Honorable Lauch Fair- cloth presiding. Present: Senators Faircloth and Snowe. STATEMENT OF THE HONORABLE LAUCH FAIRCLOTH, A UNITED STATES SENATOR FROM NORTH CAROLINA Senator FAIRCLOTH. The hearing will come to order. Good morn- ing. I am sorry we are a little late, but we were voting earlier and we might have to take a short recess in order to vote again. I have an opening statement which I will read and then we will start with our first witness. I would like to welcome the witnesses here this morning, especially William Gray from Charlotte. Thank you for being with us, Bill. This fall, millions of students are returning to college campuses and everybody knows that the cost of attending college, univer- sities, has gone up practically every year in the last dozen or more years. So anything we can do to reduce the cost has to be tried, and that is what this hearing is about. I called this hearing after learning that these increased costs may be the result of some practices that are going on on school campuses, practices that may be urged directly or indirectly by the colleges themselves and the Department of Education. Specifically, I am speaking about obstacles that do not allow students to shop competitively for textbooks. A very real problem is that student fi- nancial aid is being channeled almost exclusively to college busi- nesses and college bookstores, on-campus bookstores. Private busi- nesses simply are not able to compete for the money because of the control of the flow of the money by the colleges themselves. One example of this, is the so-called campus card, which cannot be used for off-campus businesses. Another example is thatsome colleges refuse or obstruct access by off-campus bookstores toeven the titles or textbooks going to be required by the teaching staff themselves. College textbooks can run into hundreds of dollars. Clearly,we need a more competitive situation in thisarea. I suspect that off- campus bookstores can sell these books for a lot less and thereby save a lot of money for the students. Whether they can or not, they (1) 2 should be given the opportunity. And while we aresaving dollars at the schools, we will also besaving money from the Federal Gov- ernment here. If we could save 1percent of the amount that is spent on financial aid, it wouldproduce a $500 million savings. For these reasons, I have introduced S. 2490.It would bar Fed- eral aid from being used at colleges thatdirectly or indirectly dis- criminate against off campus businesses. Iwould hope that the De- partment of Education should wantstudent choice. In fact, it would seem they would take stepsto encourage it. But I was disappointed that the Department would not send awitness for this hearing. They were notified a week ago now and theychose to not send any- one here. I wanted to hearfrom the agency and hear what they had to say. I do understand they submitted acomment,for the record, but I would like very much to have hadthem here and this is something we will pursue. I thank you and I would like to go to ourfirst witness this morn- ing and hear from him. As I say, we probably aregoing to have to be interrupted for a brief recess toallow me to go vote. Our first witness would be Mr. Gillette, GrahamGillette. STATEMENT OF GRAHAM GILLETTE, PRESIDENT,PINNACLE COMMUNICATIONS, LLC, DES MOINES, IOWA, ONBEHALF OF CAMPUS BOOKSTORE% INC., AMES, IOWA Mr. GILLETTE. Thank you, Senator.Thank you. Your opening statement hits the nail on the head. Thisis about power. This is about the control of information, and even moreimportantly to stu- dents, the control of dollars. Thank you for providing me the opportunity to behere today. My name is Graham Gilletteand I represent Campus Book Store of Ames, Iowa. Since 1973, Floyd and Sandra Balleinhave been oper- ating this store across the street from the beautifulIowa State Uni- versity campus. In sentimental terms to many studentsand alum- ni, Campus Book Store is as much a part of theUniversity experi- ence as the Union' andthe student newspaper, the Iowa State Daily. But I am not here to talk about saving a piece ofISU his- tory. I am here to talk about the cost of educationalsupplies and the important role Campus Book Store and manyprivate stores across the country play in makinghigher education affordable. The
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