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Purpose

LOAN FUNDS FOR STUDENTS IN INSTITUTIONS OF HIGHER EDUCATION

To provide for the establishment of loan funds at colleges and universities in the Nation so that undergraduate and graduate students may borrow on reasonable terms to pursue their courses of study in such institutions.

The National Defense Education Act of 1958 provided for the program through fiscal year 1962. Public Law 87-344 extended it through fiscal year 1964, Public Law 88-210 extended it another year, and the National Defense Education Act Amendments, 1964 then extended it through fiscal year 1968.

The Higher Education Act of 1965 included amendments which (a) broadened the definition of the term "institution of higher education," (b) authorize participating institutions to use student loan funds to reimburse themselves within specified limits for expenses in administering the program, (c) authorize a higher loan cancellation privilege under teaching conditions where there is a high concentration of students from low-income families, and (d) add various provisions relating to loan repayments. As used in the law, the term "State" means any of the 50 States of the Union, the District of Columbia, Puerto Rico, American Samoa, Guam, or the Virgin Islands. It also may mean the Canal Zone.

Undergraduate students eligible to receive loans may borrow a maximum of $1,000 in any academic year or its equivalent, and a total of $5,000 during the course of their undergraduate studies. Graduate and professional students may borrow up to $2,500 annually, with a limit of $10,000 for combined undergraduate and graduate study. Students obtain their loans from the institutions in which they are enrolled.

A loan is due during a 10-year period beginning nine months after the borrower ceases to be enrolled on at least a half-time basis. Interest is at 3 percent and starts to accrue at the beginning of the repayment period.

A borrower who becomes a full-time teacher in a public or other nonprofit elementary or secondary school or in an institution of higher education, is entitled to have as much as 50 percent of his loan cancelled at the rate of 10 percent for each year of teaching. If such a teacher serves in an eligible school in which there is a high concentration of students from low-income families, cancellation may be at the rate of 15 percent annually and an additional 50 percent of the loan, plus interest, may be cancelled.

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1/ Not included are authorizations in sections 207 (b) and 208 of the National Defense Education Act of 1958; namely: (a) "not to exceed a total of $25,000,000* for loans to help institutions of higher education finance their contributions to their student loan funds, and (b) payments to reimburse institutions for their share of cancelled loans.

2/ Included are funds for loans to institutions and funds to reimburse for student loans which are cancelled.

3/ This figure can be expected to be at least one-ninth of the Federal expenditure exclusive of funds for loans to institutions and for reimbursements for cancelled loans; namely, at least one-ninth of $130,024,845 for fiscal year 1965.

Method of Distribution

Funds are allotted to States in the proportion that the full-time college enrollment in the particular State bears to that in all of them. Within each allotment, funds are allocated among institutions on the basis of approved institutional requests except when such requests are for a total sum which exceeds the allotment. In such instances, each receives the same percentage as the amount of its request bears to the amount of all the approved requests in the State.

Criteria for Decision:

Enrollment data for use in determining fiscal year 1966 allotments: V.9. Department of Health, Education, and Welfare, Office of Education. Opening Fall Enrollment in Higher Education, 1964. Circular No. 762. OF 54003-04. Washington: U.S. Government Printing Office, 1964. 84 p.

Regulations: 31 F.R. 7463, May 24, 1966--45 C.F.R. 144.

Reallotment

When the allotment to a State for Federal capital contributions exceeds the total of such contributions to institutions in the State for a fiscal year, the unused portion may be reallotted from time to time to other States in proportion to their original allotments for such year but only to States where allotments were insufficient for approved requests and only to the extent needed to meet such requests.

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Matching Requirements

At least $1 for each $9 in Federal funds. (An institution unable to meet its share of the capital contribution to its loan program may obtain a Federal loan for such purpose.)

Who May Receive Federal Aid

Public or nonprofit private institutions of higher education which (a) admit only persons having a certificate of graduation from a school providing secondary education or the recognized equivalent of such certificate, (b) are legally authorized to offer postsecondary education, (c) offer either at least a 2-year course with credits acceptable toward a bachelor's degree or not less than a 1-year program to prepare students for gainful employment in a recognized occupation, and (d) are accredited by a nationally recognised accrediting agency or meet one of the alternate requirements.

Application Procedure

As prescribed by regulations, an institution files with the U.S. Comissioner of Education its initial application for a Federal capital contribution to a student loan fund and also includes for approval, a proposed agreement on establishment of the fund in accordance with conditions established by the enabling legislation. After the Commissioner enters into the agreement with the institution, the institution thereafter applies to him annually for a Federal contribution using the appropriate application form obtainable from the Office of Education.

Developments During the Past Year

About 317,000 students in 1,630 institutions borrowed some $162,000,000 under the program in fiscal year 1965. Among measures looking toward an inproved repayment schedule were on-site visits by more regional representatives, accelerated audit and fiscal reviews, issuance of a guide on Collection Procedures for participating institutions, encouragement of cooperative collection for groups of institutions, and scheduling of workshops for collection officials.

Legal Basis

Public Law 85-864 (National Defense Education Act of 1958), September 2, 1958, title II (77 Stat. 1583) as amended or affected by Public Laws 87293 (Peace Corps Act), September 22, 1961, section 20 (75 Stat. 623); 87-344, October 3, 1961, section 201 (75 Stat. 759); 87-400, October 5, 1961 (75 Stat. 832); 87-835, October 16, 1962, section 3 (76 Stat. 1070); 88-210, part B, December 18, 1963, section 22 (77 Stat. 415); 88-665 (National Defense Education Act Amendments, 1964), October 16, 1964, section 201 (78 Stat. 1100); 89-253, October 9, 1965, section 31 (75 Stat. 623); 89-329 (Higher Education Act of 1965), November 8, 1965, section 461 (79 Stat. 1252)--20 U.S.c. 421.

Additional information may be obtained from: Division of Student Financial Aid, Bureau of Higher Education, U.S. Department of Health, Education, and Welfare, Washington, D. C. 20202.

SUPPLEMENTARY EDUCATIONAL CENTERS AND SERVICES

Purpose

To support supplementary educational centers and services in order to stimulate and assist in:

a. Providing vitally needed educational services not available in sufficient quality and quantity.

b. Establishing and developing exemplary elementary and secondary school educational programs to serve as models for regular school programs.

Grants may be awarded under this program for the planning or operation of projects appropriate under title Ill of the Elementary and Secondary Education Act of 1965.

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1/ The entire appropriation of $75,000,000 is being obligated in fiscal year 1966, with expenses occurring over a longer period.

Method of Distribution

Not more than 2 percent of the annual appropriation is reserved for apportionment among Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Trust Territory of the Pacific Islands.

Each State of the Union and the District of Columbia may receive $200,000 and a portion of the remainder computed as follows: (1) half of the balance is apportioned in the same proportion that the number of children age 5 to 17 in each bears to the total number of such children in all the States of the Union and the District of Columbia; and (2) the other half is apportioned in the same ratio that the population of each bears to the population of all States of the Union and the District of Columbia. Apportionments for fiscal year 1966 also are available during fiscal year 1967.

Criteria for Decision:

To assure equitable distribution of grants within each State, the U.S. Commissioner of Education considers the size and population of the State, the geographic distribution of the population, relative need of different persons and groups, and relative ability of particular local education agencies to provide services and activities.

Assurances must be given that persons broadly representative of the educational and cultural resources of the area to be served are involved in both the planning and the development of programs, and that provision has been made for participation of children and teachers in public and nonprofit private schools.

Reallocation:

Amounts not required by a State may be reapportioned to other States in the same proportion as their original apportionments.

Source of Data:

Population data: Estimates of the Population of States, by Age: July 1, 1963, from "Population Estimates." Current Population Reports. Series P-25. No. 294. Washington: U.S. Department of Commerce, Bureau of the Census, November 5, 1964.

Regulations: 30 F.R. 13138, October 15, 1965--45 C.F.R. 118 (with enabling legislation authorizing the program through fiscal year 1970).

Matching Requirements

None.

Who May Receive Federal Aid

Local education agencies.

Application Procedure

Local education agencies request grants by submitting project proposals to the U.S.Commissioner of Education on or before such dates as he prescribes from time to time. They simultaneously submit copies of their proposals to the appropriate State education agency. (In making his decision on an application, the Commissioner considers the State education agency's evaluation of a proposal along with that by the Advisory Committee on Supplementary Educational Centers and Services established in accordance with title III of the enabling legislation.)

Developments During the Past Year

Immediately after the enabling legislation was signed on April 11, 1965, and pending appropriation of related funds, work was begun on guides and other information for chief State school officers.

Legal Basis

Public Law 89-10 (Elementary and Secondary Education Act of 1965), April 11, 1965, titles III and VI (79 Stat. 39 and 55)--20 U.S.C. 841 and 881.

Additional information may be obtained from: Division of Plans and Supplementary Centers, Bureau of Elementary and Secondary Education, Office of Education, U.S. Department of Health, Education, and Welfare, Washington, D.C. 20202.

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