It will of course be some time before we will have any real indication of the effect of these reforms. They did not come in time to have an impact on operations during Fiscal Year 1966, and reports on Fiscal Year 1967 will not be filed until the fall of 1967. It will be some time thereafter before the reports can be evaluated.

Nevertheless, with the help of the recently enacted amendments, and with the increased cooperation of the academic community, it is our strong belief that a marked improvement in the collection of loans and the general administration of the National Defense Student Loan Program will be reflected in future reports.

EXHIBIT 2

Comparison of annual repayment records, National Defense Student Loan Program

EXHIBIT 3

Excess of payments over amounts due and excess of accelerated payments over past due payments, national defense student loan program

Percent past due, by Federal region, of total amounts due, collected and uncollected, under the national defense student loan program

Federal region and States in region

Oct. 31, June 30, 1964

1965

I. Maine, Vermont, New Hampshire, Rhode Island, Massachusetts, and Connecticut..

II. New York, Pennsylvania, New Jersey, and Delaware.

IV. Tennessee, Mississippi, Alabama, Georgia, South Carolina, and Florida..
V. Wisconsin, Michigan, Illinois, Indiana, and Ohio.

VII. New Mexico, Oklahoma, Arkansas, Texas, and Louisiana.
VIII. Montana, Idaho, Wyoming, Utah, and Colorado.

IX. Washington, Oregon, California, Nevada, Arizona, Alaska, and Hawaii..

III. Maryland, Virginia, West Virginia, Kentucky, District of Columbia, Puerto
Rico, and North Carolina..

VI. North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, and
Missouri

Senator JAVITS. What is the order of magnitude of the improvement in the NDEA loan program?

Mr. MUIRHEAD. If I may turn to this table now.

Senator JAVITS. I am rather proud of those amendments to NDEA enacted last year. I am glad to hear that they work.

Mr. MUIRHEAD. The order of magnitude of the improvement, I think, can be answered this way: The number of student loan accounts has increased from 640,000 to 834,000, and of those accounts the number that are now in collection status are comparably 274,000 for 196364 and 370,000 for 1964-65.

The total amount of money that is in collection status amounted to about $191 million for 1963-64 and increased to about $294 million for 1964-65. At the end of that year payments past due amounted to $4,400,000.

Senator JAVITS. How does that compare with the previous years? Mr. MUIRHEAD. In 1963-64 payments past due amounted to 1.6 percent of the value of accounts in collection status. The comparable figure for 1964-65 was 1.5 percent.

Senator JAVITS. It has now decreased to 1.5 percent?

Mr. MUIRHEAD. Yes; this is our estimate. I think the point that I would like to stress here is that even though the program is growing larger, and there are more accounts, the value of payments past due in fiscal year 1965 was no higher a proportion of loans outstanding than it was in the previous fiscal year. We believe the trend toward increases in the delinquency rate has been halted, and that sustained attention to this problem will bring reductions in this trend.

Senator JAVITS. I would say to you that I think that the delinquency rate should be nil nationally, but that cannot be managed. I think the fact that there is a change in the trend is very helpful. I think that it is a great tribute to the students of the country that the rate of delinquency is that low. Thank you.

Senator MORSE. Thank you very much, Senator.

You will stand ready to supply to the subcommittee such memorandum as may be requested.

I am delighted now, Mr. Commissioner, to call upon you to present your testimony.

You may proceed in your own way.

STATEMENT OF HON. HAROLD HOWE II, COMMISSIONER OF EDUCATION; ACCOMPANIED BY DR. SAMUEL HALPERIN, DEPUTY ASSISTANT SECRETARY OF HEALTH, EDUCATION, AND WELFARE FOR LEGISLATION; MR. PETER P. MUIRHEAD, ASSOCIATE COMMISSIONER OF EDUCATION FOR HIGHER EDUCATION; AND DR. ALBERT L. ALFORD, ACTING ASSISTANT COMMISSIONER OF EDUCATION FOR LEGISLATION, U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Mr. Howe. Thank you, Mr. Chairman. In line with your view just expressed, and also because we have been in communication with some of the committee staff, we would like not to present the full written testimony that we have but to submit a portion of it for the record, and if we may we would like specifically to present the first 14 pages of our