and get the equivalent of a high school diploma as a condition precedent to participating in the Federal programs.

Yet someone over there toying with this regulation in meetings with people who raise questions purports to be quoting from legislative history. We can't find the history nor can counsel for the Senate committee or the House committee. Frankly, we would like you to find out who have they been talking to up here to get this "history."

Mr. KORNFELD. Mr. Chairman, John Proffitt just joined us and he is the person in charge of the bureau involved in accreditation eligibility. Perhaps he could answer some of your questions.

Mr. BIAGGI. I would like to get back. You said, Mr. Kornfeld, in the recertification process, while the audit was going on, you found there were schools with 30-, 40-, 50-percent non-high-school degree-bearing students. That is in violation of what inasmuch as we don't have a rule.

Mr. KORNFELD. Violation of the statute, which as I understand it, states that proprietary school admit high school graduates or their equivalent. The programs have to be for high school graduates or equivalent in order to be eligible for the basic grant program, as well as the campus-based programs.

Mr. FORD. There is a problem. There is a certification handbook that has been approved by OE, on file with OE and has been in effect with instructions for the proprietary schools to tell them how to qualify. It clearly indicates there are two kinds of students in proprietary schools that will be dealt with. One is the so-called regular student and the other is the special student. The requirement has been interpreted in the past as saying you have to admit as regular students to your school people who are high school graduates or equivalents. There is no prohibition against having, in addition to the regular students, special students who don't in fact have those qualifications. That is in the handbook that has been distributed to applicants all over the country with the permission of and collaboration of OE.

Now, the question comes up, what have we done legislatively that would lead somebody in OE to determine that the rules have changed? Mr. BIAGGI. You are right on that point, Mr. Chairman. The equivalency is not to be equated with the special student. That is another category. Under that category the schools have increasingly admitted a number of people which I think is salutary. They take with them in real-life experience which has its equivalency. It is acknowledged as sufficient in the academic field more and more every day. Now if we have no problem with special students at 5 or 10 percent, then why do we have a problem with them at 20 or 30 percent? It would seem to me it would be our objective to induce as many of those people into school as possible.

But I repeat the same question that was raised before by the chairman, where along the line has anyone found the intent of the Congress to place a limitation. And how do you make your own point of demarcation under the current regulations rather than submitting a proposed regulation?

Mr. KORNFELD. I would like to ask Mr. John Proffitt to respond to your questions.

STATEMENT OF JOHN R. PROFFITT, DIRECTOR OF THE DIVISION OF ELIGIBILITY AND AGENCY EVALUATION, OFFICE OF EDUCATION

Mr. PROFFITT. Thank you. I am John Proffitt, Director of the Division of Eligibility and Agency Evaluation of the Office of Education. Unlike Mr. Kornfeld I am not brand new in government, so I speak from a background of some experience.

First of all there are two statutory definitions regarding postsecondary proprietary schools. First is the statutory definition contained in section 491 of the Higher Education Act which defines a "proprietary institution of higher education." Now that statement reads that a proprietary institution of higher education means a school which provides not less than a 6-month program of training to prepare students for gainful employment in a recognized occupation and which meets the requirements of clauses I and II of section 1201A. Clause I requires high school graduation or the equivalent. So in arriving at a definition of an eligible proprietary institution of higher education, we have to consider section 491 and section 1201A. Essentially, those two sections specify that such a school be one which enrolls as regular students only individuals with a high school diploma or the equivalent, and offers a program of at least 6 months in duration. Now, a school which is defined as a proprietary institution of higher education is eligible for the Basic Educational Opportunity Grant Program. Eligible students enrolled in an eligible proprietary institution of higher education are eligible for the basic grant program. This definition was first introduced into the statutes by Congress in 1968 in order to provide eligibility for proprietary institutions for the College Work Study Program and the National Defense Student Loan. Its applicability was broadened in 1972 to provide eligibility to proprietary schools for the basic grant program under the terms of that definition. Again, I emphasize that such a school has to admit as regular students only high school graduates or persons with equivalency, and within a program of at least 6 months in duration.

The second statutory definition pertaining to both proprietary and nonproprietary schools is the definition of a vocational school. This definition does not contain an admissions requirement of high school graduation, but does require that a school offer a program of at least 3 months in duration. As we have attempted to administer these two statutory definitions relative to proprietary schools-that is the definition of a proprietary institution of higher education and that for vocational schools-we have made two different determinations for each school.

Most proprietary schools are eligible under the vocational school definition. They offer programs of at least 3-months duration and, therefore, those students in that school are eligible under the guaranteed Student Loan Program. In such cases, we issue a separate eligibility certificate to those schools, certifying that they are eligible for the guaranteed student loan program and for programs under the Vocational Education Act.

We issue a second certificate of eligibility to the school if any portion of that school's program meets the definition of a proprietary institution of higher education, but the second certificate of eligibility is limited only to that portion of the school which does meet the statutory definition of enrolling as regular students only high school grad

uates or the equivalent, and which offers a program of at least 6 months duration. Therefore, many proprietary schools have met the eligibility test of both statutory definitions and, consequently, have received two certificates of eligibility.

I brought along several copies of these two eligibility certificates in which we state very clearly to the institution that, as an eligible institution under the definition of a proprietary institution of higher education, it is eligible to apply for participation only in certain programs administered by the Office of Education. Listed are the national direct student loan program, college work study program, the supplemental educational opportunity grants program, and special programs for disadvantaged students-talent search, upward bound, and special services. The next statement reads, "Students who have been accepted for enrollment or are in good standing at this 'eligible institution' are also eligible for basic educational opportunity grants. Please note, however, that this eligibility applies when a school remains under the current ownership." And there we have underlined "only to accredited occupational programs which require high school graduation or the equivalent for admission and are at least 6 months in length."

[The certificates referred to appear in the appendix.]

Now, this problem did not arise until the statutory provisions concerning the funding programs for which proprietary institutions of higher education are eligible were broadened. As that revision of the statute developed, we had to sort out for ourselves an appropriate approach to administering the eligibility process under these two statutory definitions. In terms of the history of this matter, I do believe that some schools have become somewhat confused regarding variances in interpretation of the Office of Education position by various spokesmen for the Office of Education. We have sympathized, at times, with institutions regarding their confusion about this matter. However, there have been some clearcut statements by the Office of Education on this matter, Mr. Chairman.

For instance, in the regulations of the basic educational opportunity grant program published in November of 1974, there was this statement

However, an otherwise eligible program does not lose its eligibility if its enrollment includes a small proportion of non-high school graduates admitted as special students. In such a case special students are also eligible for basic grants.

The point that the regulations were trying to make to proprietary institutions is that there is a statutory requirement specifying admission only of high school graduates or the equivalent. However, the Office of Education would accept a small proportion of non-high-school graduates in programs for which the Basic Educational Opportunity Grant Program, as well as the other programs that I mentioned, would apply.

In the basic grant handbook of 1976-77, is the statement again—

An otherwise eligible program does not lose its eligibility if its enrollment includes a small proportion of non-high-school graduates who are admitted as special students as long as these students were admitted as a result of the requirement being waived. Enrollment of an excessive proportion of non-highschool graduates in a program could result in an investigation by the accreditation and institutional eligibility staff and possible repeal of eligibility for such a program.

Again, in a letter of interpretation dated June 8, 1973, to a representative of a large number of proprietary schools, we stated this:

Among the requirements listed in the law is the requirement, "admits as regular students only persons having a certificate of graduation from a school providing secondary education or the recognized equivalent of such a certificate."

The school's catalog-that is the school in this case, a proprietary institution of higher education-should reflect the principle that the school's admission policy is confined to high school graduates or those persons holding recognized equivalency certificates. We do not believe that the law prevents a school from admitting an occasional special student if the admissions director believes he or she deserves special consideration. However, students accepted under special considerations should be the exception. The school's catalog should not advertise exceptions to its regular admissions requirements unless the school is prepared to offer a different program to these special students. The admissions requirements for each separate program should be clearly defined in the school's catalog. What I am afraid we have had here has been the emergence over the last several months of a great deal of confusion regarding what we were trying to do through the regulation process. What we are trying to do is to further define by regulation, if possible, this small percentage which we have been talking about at least since 1973 that would be admissible in those programs which a proprietary institution of higher education advertises enrolls only high school graduates or their equivalent.

I suggest that the statute is clear in specifying that only those programs which enroll high school graduates as regular students are eligible for the basic grant program, and we have dealt with this matter by issuing two separate eligibility certificates to many schools. Thus, instead of saying to schools, "You are ineligible because not all of your students are high school graduates or the equivalent," we have said two other things to them. One is that we will recognize you as eligible only under the guaranteed student loan program for those programs that do not require high school graduation. We will establish your eligibility for the national direct student loan program and the others, including the basic grant program, in the case of those programs that do admit only high school graduates, or the equivalent, as regular students. We will not make you ineligible if you take into your so-called regular program some non-high-school graduates, due to the fact that most institutions invariably have a statement in their catalog noting that the admissions director may waive the high school graduation requirement if he believes an individual can successfully benefit from the course of study in that particular program.

We have not been trying to limit the eligibility status of any institution except within the confines of those two statutory definitions. We have found in the past year that as a result of some audits of institutions that some institutions-and we don't know the numbers that confront us here some institutions obviously have gone beyond the small percentage of non-high-school graduates which we have indicated in the past we would accept. And so we have come to the conclusion that if we are going to continue to allow for any variance of the high school admission requirement that the time has come when we need to define, for the institutions' benefit, what percentage of variance, or what kinds of variance we will permit. To date, we have not found, through audit, any proprietary institution which would conform with a strict reading of this statute-that is, which would have no high school graduates.

At the same time, we have not found any such schools which have just a small percentage of non-high-school graduates or their equivalent.

The problem schools have been so far beyond a small percentage of non-high-school graduates in their regular student category that there is just not any question that they are not in conformity with the statute, nor are they in conformity with any kind of reasonable test regarding this matter which we could anticipate putting into any proposed regulations.

What we have intended to do was to publish notices of proposed rulemaking and hold public hearings around the country on this matter. We are not locked into any kind of position concerning what the percentage of variance should be or, indeed, if there should be a percentage. It could well be that the ultimate legal determination would be that we could not permit any percentage variance under the current statute.

Mr. FORD. If your present rigid interpretation of the statute is a correct one, that there is not any authority for any percentage, what you are dealing with is the question of how many angels can dance on the head of the pin. It is the same problem that the Supreme Court has had in one-man, one-vote decisions examining apportionment of congressional districts across the country. The court has said that some variance from absolute zero obviously could be permitted but no variance which is deliberate can be permitted. In other words, if you try to work it all out and by accident you end up with a variance, that does not offend the Constitution, but if you try to have a 1 percent or 2 percent or any preconceived percentage variance up front, then you are violating constitutional neutrality.

Lawyers have wrestled with that all across the country over and over again. How can the court say on the one hand that no variance is permitted if you understand it is happening, but a variance is permitted if it just happens. That seems to be what has grown up here-a variance has been permitted without anybody ever trying to put down on paper what kind of percentage is an acceptable variance.

Mr. PROFFITT. That is correct.

Mr. FORD. And now if you try to put down a 5-percent variance, you will test the question quickly of whether you can vary at all, What I suppose is bothersome to many of those people, however-and with your letter to Bernie Ehrlich, who represents many of these schools, in August of this year you sent him a number of enclosures. One was page 17 of your publication, "Basic Grant Training Material" dated back in June 1972, which states under the title of "Eligible Program"In addition to being enrolled in an eligible institution, a basic grant recipient must be enrolled in an eligible program within that institution.

Skipping down to the next paragraph-

It is important to note that students who are not enrolled in an eligible program will not be eligible to receive basic grants. Another point to note is that a student who receives a basic grant does not have to be a high school graduate or its equivalent, however, he must be enrolled in a program of study which normally requires a high school diploma as a prerequisite for admission for its regular students. In a case such as this, the fact that the institution allowed the student to enter such a program can be considered as institutional recognition of the student as being the same as a high school graduate.

Now, that is a regulation from 1973 and if that is not a clear, open invitation for proprietary schools to admit and qualify anybody that can participate in a program, I can't imagine how you could make it