to the IRS comparison study to determine the overall rate of misreporting, an effort to validate individual student reported application data since the 1975-76 academic year. Applicants are included in the validation effort on the basis of (1) sampling the applicant data base for high risk cases, determined by a set of pre-established criteria (PEC), and (2) referrals from institutions of higher education of cases containing discrepant information which cannot be resolved at the institutional level.

Applicants validated under the above mentioned categories were requested to supply: (1) a notarized copy of their (or parents') income tax return, (2) A notarized copy of their (or parents') W-2 forms, and (3) a notarized statement confirming the amount of the nontaxable income received in the year prior to which aid is requested. During the 1976-77 academic year, a combined total of approximately 7,100 (6,000 PEC and 1,100 institutional referrals) cases were validated. The final reports on the results of this validation effort are in

draft stages.

For the 1977-78 academic year, a total of 8,000 applicants will be selected from the applicant data base for follow-up and an estimated 1,200 additional students which institutions are unable to validate will be referred to the Office

of Education for follow-up and resolution.

14. Is it correct that a student who lived with his parents during January and February of 1976 and then got married in March of 1976 and moved out to live with his wife would be a dependent student this September even if he received less than $600 from his parents in either 1976 or 1977 and was not taken as a tax exemption by his parents for either year? Wouldn't the proposed new rule result in the same dependency status for students who got married even a year earlier?

Present regulations regarding the independent student state that any applicant who was claimed for Federal income tax purposes by his parents during the year prior to application (the base year), received more than $600, or

lived with his parents for more than two weeks, is defined as a dependent student and must report his parents' financial information.

The rationale

of the Office of Education has been that the fact that a student has recently married does not necessarily prove an applicant's financial independence from parental support as defined by these indicators. In addition, the fact that a

student has recently married and left his or her parent's household should not necessarily entitle the student to special consideration as an independent student for purposes of receiving Federal financial aid. The married student should be required to fulfill the same criteria as all other applicants in determining the financial relationship with his or her parents. Some students may still be receiving parental support, even though married, so that marital status cannot be considered a reliable measure of financial independence. The answer, therefore,

to the question is yes, the student would be considered a dependent student and must file with parental information.

The Office of Education recognizes, however, that there are some serious problems of equity in the case of independent students. The Office of Education would like to emphasize the fact that additional consideration is being given the problem of independents including the married student, and that we hope to present a more equitable proposal to the Congress by next March.

15. Figure 1 of Mr. Kornfeld's statement shows 140,000 veterans receiving BEOGS last year. Do you know how many of these are independent? Whether full-time or part-time students? How many are married? Do you feel our treatment of veterans under the G. I. Bill is fair? If not, what would you recommend?

Congressman Quie referred to the fact that approximately 140,000 veterans

receiving educational benefits applied for Easic assistance and were determined

As you know, Secretary Califano announced the establishment of the
Bureau of Student Financial Assistance on March 8, 1977, as part of
his reorganization of the Department. His purpose was to consolidate
student financial aid resources and increase cooperation among the
various student aid programs in order to provide the kind of leader-
ship necessary to make sure that these programs are sensitive to
student needs and accountable under sound financial practices.
Commissioner Boyer on April 11, 1977, in announcing the reorganization
of the Office of Education reaffirmed the need for and the important
role of the Bureau of Student Financial Assistance.

Over the past several months we have been developing organizational
plans for the new Bureau which would most effectively carry out the
Secretary's mandate. This week, the proposed organizational structure
through the Division level will be published in the Federal Register.
A copy of the approved organization is attached.

During the next several weeks we will be completing the details of the
organization at the branch and section levels, including the staffing
of each organizational unit. In addition, we will also be consulting
with OE management and the Union regarding our plans. As soon as we
have completed the planning and other steps necessary to finalize the
organization and staffing of the Bureau, we will provide each of you
with your organizational assignment, your supervisor's name, and a
more detailed organization chart. We will also hold orientation
sessions to discuss the Bureau's organization structure and goals,
introduce key personnel and answer questions.

Seol. Kufer

Leo L. Kornfeld

5010-110

Attachments

97-379 O 78-9

Buy U.S. Savings Bonds Regularly on the Payroll Savings Plan

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

EDUCATION DIVISION

OFFICE OF EDUCATION

Part EE, Office of Education (formerly Part 2B), Section EE.10 of the Statement of Organization, Functions, and Delegations of Authority for the Department of Health, Education, and Welfare is amended to reflect the additions of Divisions in the Bureau of Student Financial Assistance which was created by the Secretary of Health, Education, and Welfare and the Commissioner of Education at 42 FR 13263 (March 9, 1977). A statement for an Office of Student Financial Assistance in each Region has been added in order to conform with an order by the Secretary on July 19, 1977.

The specific changes are as follows:

1) A new functional statement for the Bureau of Student Financial Assistance and the regional Offices of Student Financial Assistance is added as follows immediately after the statements for the Bureau of Education for the Handicapped and its Divisions: