Mr. CARDWELL. A heavy concentration of Federal employees. The District of Columbia, those who do not live on Federal property, would go from $3.8 million down to $500,000. Arlington would go from $1.9 million

Mr. FLOOD. Arlington where?

Mr. CARDWELL. Arlington, Va.

Mr. FLOOD. That is adjacent and contiguous to Washington, D.C., and has a great many Federal employees.

Mr. CARDWELL. Correct. That would go from $1.9 million down to $900,000. Fairfax County

Mr. FLOOD. And the same applies to that county-a great many Federal employees who work in the District of Columbia.

Mr. CARDWELL. Yes. That is from $11.5 million down to $7.1 million. Prince Georges County

Mr. FLOOD. The same definition of that county applies.

Mr. CARDWELL. Correct. It is from $10 million down to $3.9 million. In short, once you get away from the District of Columbia area and the area adjacent thereto where you have a very large concentration of Federal employees and their families, the provisions would reduce Federal support for the large States California, New York, Pennsylvania, Ohio, and Illinois-but would probably increase assistance to North Dakota, South Dakota, Arizona, the small States where there is military impact. In other words, the whole design of this proposal is to go back to the beginning of the program. That is, to provide Federal assistance where there is an impact growing out of the military activity, be it expanded or otherwise.

Mr. FLOOD. That was the original purpose and intent of the act? Mr. CARDWELL. That is our protection. The 1972 budget was based on a different form. It provides 90 percent of entitlement to so-called A children, children whose parents both live and work on Federal property, and about 73 percent of entitlement for all B children across the board; B children being those whose parents work on Federal property but who live in the community and pay taxes. Mr. CONTE. Will the chairman yield there?

Mr. FLOOD. Yes.

IMPACT OF FEDERAL HOUSING PROGRAMS

Mr. CONTE. We are having enormous difficulties in some of the communities in my district right now. The high concentration of federally subsidized housing has created a crisis situation in some areas. The communities are just not able to absorb the tremendous influx of students caused by such programs. The schools are overcrowded and underequipped, municipal services are completely inadequate, and the localities cannot raise enough money to remedy this situation. What is the difference between bringing in people under subsidized housing programs and bringing them as the result of the operation of an Army installation?

Mr. CARDWELL. I guess I am not in a position where I am going to influence the design of the legislation. The so-called authority to provide impacted area aid where there are concentrations of lower rent public housing has been popularly characterized as category C children. They are the children who attend local schools and whose families reside in public housing, whose families are low income and do not themselves pay real estate or other taxes to any degree. The theory, of course, as Mr. Conte points out, is that the existence of that housing project in the community denies the community the taxes that it might otherwise collect.

I think that what you have here is a matter of historical accident. That particular legislative authority came along just 2 years ago. It has never been funded. The administration would like to modify significantly the whole concept of impact. It just seems inconsistent to the administration to embark on a new category of impact at a time when you are trying to overhaul the whole basic system.

As you well know, Mr. Conte, we have resisted the funding of that authority from its inception. But, the question you're asking about, section 235 funds goes even beyond the question of impacted area aid. As I understand it, this is an FHA program to provide interest-subsidized loans for low income families so that they can purchase, not rent property. Therefore, in the traditional sense there is no Federal impact because the District does not lose any tax base and cannot receive impacted area funds. If you want to pursue this further, I suggest you bring it up with either the Secretary or the Commissioner. Mr. CONTE. Thank you, Mr. Chairman.

Mr. CARDWELL. Let's go to higher education, chart 10. Looking at the totals, we show a decrease in Federal support for higher education, but if you examine it closely there are a lot of significant increases inside the total. Let's go down the items and maybe that way you will find out where the pluses and minuses really are. Grants and work study, an increase of $30 million, going from $672 million to $702 million. I might point out that the $672 million includes a supplemental appropriation for 1972 of $260 million. We are proposing a large increase in that particular program this year. That would increase it further in 1973, by another $30 million.

FORWARD FUNDING CYCLE

The $166 million, which is a minus item in 1973, represents the deletion of a one-time item that has been appropriated for 1972, to put these kinds of student assistance on what we call a forward funding cycle. Student assistance has become mixed up through the years. Some of it goes out in the appropriation that is available beginning July 1 to help assist students who will be enrolling in school 3 months later, in September. Most of it, though, has been going out through appropriation available on July 1 to fund students who would not be starting school until 12 or 15 months later, September of the following year. This gives the school districts and the colleges and universities an opportunity to know how much money they are going to have available and it meshes with the normal administrative cycle of the college, university or community.

The problem has become very complicated through the years because the appropriation has already been available on July 1. It has usually been available in October, 1 month after the school year that it is intended to serve has started. We requested the $166 million in 1972 to get all that money on an even, forward funding cycle. Since the money has been put up, we are synchronized and we don't need the appropriation in subsequent years. That accounts for $166 million worth of decrease.

STUDENT LOANS

Subsidized, insured loans, using private banking resources to finance student assistance, would go up $18 million to $215 million. The budget includes $293 million, at the same level as 1972, for direct student loans. This committee well knows we have had a tug of war for several years, with the administration proposing the elimination of the direct student loan program in its entirety, in favor of guaranteed loans and the Congress saying, "No," and putting it back-partly perhaps for philosophical reasons and differences and partly because the legislation that would make that change has never been able to get out ahead of the budget. And the committee has had little choice but to keep the direct money in there because they didn't know whether the legislation would ever be authorized. So we changed the presentation of our funding course.

We are still trying to persuade the Congress to drop the direct loan program. We are saying that the money is in the budget and it would be

dropped only if Congress were to adopt legislation authorizing its deletion. This way we think we have it on an even keel.

The total student assistance program in 1973 would fund about 2.9 million students at an average of about $510 a student. That is an increase of about 40,000 students over the prior year, and an increase of about $10 per student.

Mr. CASEY. Mr. Chairman, might I ask another question at this point?

Mr. FLOOD. Certainly.

SPECIAL PROGRAM FOR THE DISADVANTAGED

Mr. CASEY. Regarding the special program for the disadvantaged, which you haven't hit yet-maybe you were going to disadvantaged in what respect, financially or how?

Mr. CARDWELL. They were disadvantaged financially at one stage. These are students who had to be poor to get the basic Federal student assistance in the first place. We know students from that background are not as well prepared to pursue a college education as successfully as their peers from middle income backgrounds. This program provides special financial assistance to the schools who take such children to provide them remedial reading and other remedial work to help them through college.

Mr. CASEY. This has to do with the institution, rather than room, board, and tuition, correct?

Mr. CARDWELL. Correct. This goes to the educational institution rather than to the student.

EDUCATIONAL OPPORTUNITY GRANTS AND WORK-STUDY

Mr. CASEY. How is the item grants and work-study split-up? You have it all together again here. Are you increasing the grants like you did last time?

Mr. CARDWELL. Yes, sir.

Mr. CASEY. How about the work-study? Is it going to remain about the same? Or are you increasing it, too?

Mr. CARDWELL. The proposal from the budget would merge the funds for the two kinds of assistance into one fund and would leave the college student assistance officer with the choice of using either mode, whichever seemed best to suit the student.

In most cases I believe the Commissioner will tell you that they would expect the average student would be supported by a combination of assistance-a grant, a work-study job that would finance part of the student's education, and perhaps a loan as well.

There would be no breakdown at the Federal level between grants and work-study. The school would have the choice to put it all in workstudy, or put it all in grants, or to mix it up.

Mr. CASEY. It's expected, but it's not required?

Mr. CARDWELL. It's not required. That is right.

Mr. CASEY. In other words, if an institution wants to use all of their money to give educational opportunity grants, they can do it and forget about the work-study?