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 1963– 64 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

testimony for the record. We believe that adequately presents both the need for the programs suggested there and explains the nature of those programs. In brief, they are the Higher Education Facilities Act of 1963, for which we are asking a 5-year extension, and title III of the Higher Education Act, but, if I may, sir, I would like to present in detail the testimony which relates to the national defense student loan program.

Senator MORSE. The procedure you have outlined is certainly satisfactory.

We will put in the record at this point, the entire statement of the Department, so that there will be continuity in the record; then, the Commissioner can present his prepared comments.

Senator Yarborough has come in.

Before you came in, Senator Yarborough, I announced that the hearings will not last beyond 3 days; to meet all committee requirements, I have instructed counsel to see to it that the witnesses are limited in their oral testimony on the basis of the time that they and counsel have worked out, so that they will make their statements in that period of time and no longer, and then they will file supplemental statements to support their oral testimony. We will call witnesses back during executive sessions, if we decide that we need further discussion from them, particularly, the administration witnesses.

I want to say to the witnesses this morning that Senator Yarborough is the chairman of the Subcommittee on Labor. He will have to leave about 10 o'clock for a session of that subcommittee. I shall have to suspend these hearings soon thereafter when I am advised that one more person is needed to make a quorum.

I will go down to that hearing then.

The two subcommittees have almost identical membership and we sometimes have difficulty in getting a quorum for the markup. I hope that counsel can find some member of the full committee who is not on the subcommittee to preside, so that we can finish these hearings this morning. If counsel cannot, the witnesses will have to file the rest of their statements this morning.

Senator YARBOROUGH. I desire to commend the chairman for his diligence on all of these educational problems and these special educational measures. Except for this commitment in the executive session, I will give priority to this subcommittee, although I have six meetings today, but, as I say, except for the executive session, I will give priority to the Education Subcommittee. I commend the chairman on his diligence and his efficiency in pushing these hearings through. I hope that they be long enough and yet short enough to save the National Defense Education Act from the Bureau of the Budget's effort to destroy it.

Senator MORSE. We have the votes to do that. That is the answer to the Bureau of the Budget-just the votes. I am not interested in their reaction.

Their position is obviously fallacious. I will not waste any time. on it but just vote.

Senator YARBOROUGH. I desire to associate myself with the statement of the chairman, Senator Morse.

Senator MORSE. I want to say to the gentleman from Texas that his complete cooperation has made it possible for us to expedite the edu

cational bills. Counsel will go to work and see if he can get somebody to take my place after 10 o'clock.

You may proceed in your own way, Mr. Howe.

Mr. Howe. One further observation, Mr. Chairman, with the testimony that we are submitting for the record, there are four exhibits which we would like also to accompany this testimony in the record. Senator MORSE. They will be inserted in the record.

(The prepared statement of Mr. Howe and accompanying exhibits read in full as follows:)

PREPARED STATEMENT OF HON. HAROLD HOWE II, COMMISSIONER OF EDUCATION, U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Mr. Chairman and members of the Subcommittee on Education, I am happy to have this opportunity to meet with the distinguished Subcommittee which has played such a prominent role in expanding educational opportunities for the college students of our Nation. Major changes in the National Defense Education Act of 1958, the Higher Education Facilities Act of 1963, and the Higher Education Act of 1965-all these products of this Committee have had a substantial impact on the course and quality of American higher education. All reflect this Subcommittee's recognition that, if the goals of our Nation's higher educational system are to be met, every college must be developed to its full potential.

The increased complexity of modern-day life, a thirst for knowledge on the part of young people, and a growing demand on the part of all employers for college graduates have had a profound effect upon our higher education system. College enrollments have doubled in the past decade; there are today nearly 6 million students in our Nation's colleges and universities. By 1975 enrollments are expected to reach 8.6 million. Freshman enrollments for 1965 were 18 percent

above those of the previous year.

Our society is trying to rise to the challenge presented by burgeoning enrollments. The number of colleges has tripled since the end of World War II— from 866 to 2,200 in 1966. There is every indication that this spectacular growth will continue.

Such rapid growth has not been limited to undergraduate enrollments and institutions. Students with bachelor's degrees are entering graduate school in ever-increasing numbers. Increasingly, colleges, vocational and technical schools, business, and industry are requiring their professional employees to have some postgraduate education. Ten years ago, there were about 240,000 students enrolled in graduate school; last September, there were 570,000. By 1971, it is expected that there will be almost 1.1 million students in graduate schools across the country.

Although increasing numbers of students are seeking undergraduate and graduate educations, rising costs of such education are making it increasingly difficult. Costs to the undergraduate student in public institutions averaged $850 in 1940; last year that cost had almost doubled-$1,560. By 1980, the cost of an undergraduate education in a public institution will be even higher-an estimated $2,400. In private institutions, the costs have risen from $1,100 in 1940 to $2,370 in 1965; by 1980, it is estimated that the average annual cost will be $3,640.

Programs created by this Committee recognize the importance of a national investment in higher education. Financial assistance offered to college students furnishes a good example of this investment in educated manpower. Until 1964, as you know, the National Defense Education Act of 1958 was the only major Federal program for the support of undergraduate students needing financial assistance. Since then, you have authorized the College Work-Study Program, for which the 1967 budget provides $134 million. You have established the Opportunity Grant Program for able but exceptionally needy students; the budget figure for 1967 is $120 million. You have also provided a loan guarantee program with Federal interest subsidies for students at almost all income levels.

These programs will be larger in FY 1967 than ever before. We expect well over 1 million students to borrow money under the NDEA Loan Program and the Subsidized Guarantee Loan Program; 210,000 to hold work-study grants; and 220,000 to receive opportunity grants.

The proposed Higher Education Amendments of 1966, S. 3047, would strengthen three basic elements of our overall program of Federal assistance to higher education: (1) construction of higher education facilities, (2) the strengthening of developing colleges, and (3) our student loan programs.

AMENDMENTS TO THE HIGHER EDUCATION FACILITIES ACT OF 1963

When the Higher Education Facilities Act was enacted in 1963, President Johnson hailed it as "the most significant education bill passed by the Congress in the history of the Republic." It is the cornerstone of Federal legislation for higher education and has a significance that goes far beyond bricks and mortar.

The capacity of our colleges and universities must be enlarged to accommodate the increased enrollments of students, both graduate and undergraduate. Without Federal assistance colleges and universities would be under tremendous pressure to impose upon the student population, in the form of increased tuition, the added expense of financing the expansion of American higher education. It is clear, then that the construction of higher education facilities, as well as programs specifically concerned with student financial aid, have a direct bearing upon the welfare of the student and upon equality of educational opportunity. During the first year of operation, fiscal year 1965, the three programs authorized by the Act got off to a good start, even though funds were not appropriated until several months after the beginning of the fiscal year. At this point, Mr. Chairman, I would like to introduce for the record Exhibits 1 and 2 which report on all three programs for fiscal year 1965 and for fiscal year 1966.

Title I of the Act establishes grants to public and private nonprofit colleges and universities for undergraduate classroom, laboratory, and library construction. These grants are used to pay up to 40 percent of construction or improvement costs of public community colleges and up on one-third these costs for all other institutions of higher education.

In 1965 under Title I, State commissions were established and State plans approved for all of the States. A total of 516 construction grants to 475 different institutions were approved within the year. Grants awarded for these projects amounted to $224.4 million, making possible construction of almost $1.4 billion in value.

Grants went to 98 community college campuses which plan to educate 110,776 additional undergraduate students by the fall of 1968.

Grants also went to 377 institutions or branch campuses other than public community colleges. These institutions plan to educate 535,329 additional undergraduate students by the fall of 1968 (28.6 percent of the total expected nationally).

During the fiscal year 1966, the demand for assistance under the Higher Education Facilities Act remained high. On June 30, approval actions had been completed on all applications received under Title I. The value of the 241 approved construction grants to community colleges and public technical institutes amounted to about $105 million. The value of construction grants to other institutions amounted to $362.1 million. Of the total-about $467 million $10.6 million represents reallocated funds appropriated for fiscal year 1965, and the remainder funds appropriated for fiscal year 1966. An unobligated balance of $1.5 million of the appropriation for fiscal year 1966 will be reallotted among the States. Probably a large part of the funds will be allocated to Kansas, where the campus of Washburn University was partially destroyed by a tornado.

Title II of the law establishes grants to public and nonprofit private colleges and universities for graduate classroom, laboratory, and library construction. These grants are also used to pay up to one-third of construction of improvement costs.

Under Title II, an Advisory Committee was formed, along with six panels to evaluate applications prior to final action by the Advisory Committee. During fiscal year 1965, 125 applications were received and 85 approved, at a total cost of $60 million, the full appropriation. Demand for assistance in construction of graduate facilities remains strong but at about the same level. Ninety-five grants were approved during fiscal year 1966 with a total value of $60 million, the full amount of the funds appropriated for the year. This assistance will enable colleges to construct graduate facilities with a total value of nearly $325 million.

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Federal loans are available for undergraduate and graduate school construc tion under Title III of the Act. This program complements the grant programs embodied in Titles I and II. Under a combination of these programs, the Federal share may not exceed three-fourths of the total cost of construction.

Almost $108 million in loans to build graduate and undergraduate facilities were obligated in fiscal year 1965. Of the over 140 applications received, 133 were approved. In fiscal year 1966, due in part to the lowering of interest rates to 3 percent, the demand for loans was even higher. Public institutions now find the interest rate attractive. Under Title III, the funds available permitted the processing of only 143 out of 279 loan applications received. There are accordingly already 136 loan requests for fiscal year 1967, with a total value of $157.2 million. The value of the applications approved for fiscal year 1966 was $101.2 million.

The strong demand which we have experienced under all three Higher Education Facilities programs is an expression of what President Kennedy called "the long predicted crisis in higher education facilities." The essence of the crisis is a gap between the resources needed to build facilities and the resources available for this purpose. Even with the expenditure of an estimated $1 bilion in non-Federal construction of undergraduate facilities, plus $600 million in Federal grants and loans, the gap between needs and resources is estimated to exceed $4 billion.

It is for these reasons that we propose the extension of the Higher Education Facilities Act for 5 years, through fiscal 1971. The authorization level for fiscal year 1967 would be $453 million for grants for construction of undergraduate facilities, $60 million for grants for construction of graduate facilities, and $200 million for loans for graduate and undergraduate construction. An additional $7 million is requested to cover the costs of administration of State plans and for comprehensive planning of construction needs of institutions of higher education. We propose that the latter sum should be available for administrative expenses of State commissions not only under Title I of the Facilities Act, but also under Title VI of the Higher Education Act of 1965, which authorizes grants for instructional equipment. In keeping with this, we propose an amendment to provide for authorization of appropriations for both purposes in only one place, namely Section 105(b) of the Higher Education Facilities Act.

Although funds have been made available in past years for the expenses of State administration no money has been available to allow States or institutions to project their construction needs over an extended period of time. Under the proposed amendment, grants for this latter purpose would be made to State commissions on application to the Office of Education. Planning to be supported might be conducted by institutions of higher education or by State commissions, in cooperation with colleges and universities, or by independent agencies, under contract.

The planning supported would be comprehensive in scope and directed toward the preparation of master plans in terms of what are generally called program requirements, rather than of actual specifications for construction. In view of the limited funds available, they would in only exceptional cases be available to cover architectural and engineering fees.

There is an acute need for comprehensive forward planning under this program. It is a program which involves massive amounts of money and hundreds of institutions throughout the country. The State plans which have been prepared are essentially administrative documents for the purpose of arbitrating competition in application. Only in a few States are these plans based upon systematic projections of enrollments, careful definitions of optimum size, detailed assessments of financial resources and local needs, or intensive space utilization studies. When such studies have been well conducted at the campus level and are reflected in State plans, resources have been more wisely allocated. Provision of funds for such planning can result in dramatic improvement of planning efforts leading to more efficient and effective utilization of Federal construction funds. The need for inter-State and regional planning is also dramatic. The necessity for this has been particularly conspicuous under the Appalachian Regional Development Act of 1965. There are in being in various regions of the country institutions established by the States which concern themselves with higher education over entire regions-the Western Interstate Commission for Higher Education, for example; the New England Board of Higher Education; and the Southern Regional Education Board. State commissions might wish to engage