TESTIMONY FOR THE 1978-79 FAMILY CONTRIBUTION SCHEDULES Thank you for the opportunity to be with you today to discuss the Basic Educational Opportunity Grant Program and to share with you our proposed changes in the Family Contribution Schedules for the 1978-79 academic year. INTRODUCTION Before discussing the Family Contribution Schedules, I would like to give you a brief outline of the progress of the program during the four academic years it has been in operation. As you know, the Basic Grant Program was established by the Education Amendments of 1972 and began operations in the 1973-74 academic year with an appropriation of $122.1 million. During that year approximately 185,000 students received awards. The program has experienced dramatic growth since that first year of existence, and during the current academic year we expect that approximately 2 million students will receive grants totaling $1.7 billion. I have included in my testimony three charts to provide you with an illustration of the growth of the program. The first, listed as Exhibit I, shows the growth in program expenditures during its four completed years of operation with estimated amounts shown for 1977-78 and 1978-79. Exhibit II shows the growth in the number of applicants for those years, and Exhibit III shows the growth in the number of recipients. Additionally, I am submitting for the record a number of other tables describing various characteristics of the Basic Grant applicant population. These are included in my testimony as Appendix A. SIMPLIFYING FINANCIAL AID APPLICATION PROCEDURES: ADOPTION OF A COMMON APPLICATION CALENDAR AND COMMON DATA ELEMENTS As you know, the Office of Education, along with other segments of the financial aid community, has been engaged in efforts to simplify finan cial aid application procedures for students. There are two aspects of this effort which will have a significant impact on Basic Grant Program operations during the 1978-79 academic year which I would like to discuss with you today, since they will affect your review of the Family Contribution Schedules. These issues concern the adoption of a common calendar for the distribution of student financial aid applications and the use of common data elements on various student financial aid appli cation forms. Over the past several years there have been extensive discussions in the postsecondary community concerning various problems in the financial aid process. The National Task Force on Student Aid Problems (also known as the Keppel Task Force) was established to study the area of financial aid and made recommendations for improving the system. Two of their recommendations would have had a significant impact on the Basic Grant Program. The first recommendation was that a common financial aid application should be established for use by all students. Secondly, the Task Force recommended that there should be a common calendar for the complete financial aid process. The Office of Education agreed in prin- ciple with both of these recommendations. there were problems to be overcome before they could be adopted. With regard to the common form, the Basic Grant Program did not feel it could use the proposed form because it requested considerably more information than was necessary for making a determination of a student's eligibility for a Basic Grant award. With regard to the common calendar, the proposed September date for the distribution of forms would have meant that estimated income data would be reported on the form. Given the unreliability of estimated information, this was not seen as acceptable. ever, the Keppel Task Force also proposed a "compromise" calendar that would call for the distribution of forms in early December with processing of completed applications to begin in January. This was the calendar that the Basic Grant Program had been using for several years. How In late 1976 there were increasing indications that the compromise calendar was acceptable to a significant portion of the postsecondary community. This was a highly significant development since it meant that actual full year data could be collected on the various forms, and therefore would be acceptable for use by the Basic Grant Program. In May of this year Secretary Califano announced that data necessary for a determination of Basic Grant eligibility could be collected on other parties' forms. This data would be transmitted to the Basic Grant Processor, who would produce an official notification and send it to the student. As a result of this process, a very large number of students would be able to receive consideration for a Basic Grant award without having to submit a Basic Grant application. It is hoped that many students would be able to apply for institutional, State and Federal aid by completing a single form and we estimate that this approach will reduce the number of Basic Grant applications to be filed by 2.5 million. This rather extensive background brings me to the problem at hand. The Basic Grant Program and the agencies whose forms will most likely collect data for use by Basic Grants have been working for a number of months to arrive at common definitions for the data elements. This process has been completed and a common set of instructions has also been achieved. In order to have forms ready and available for national distribution in early December in accordance with the agreed upon calendar, the need analysis services require approximately three months of lead time for printing applications, instructions, and other informational materials, as well as for setting up the procedures for transferring application data to the Basic Grants processor. This lead time requirement means that the data elements will have to be established as final before the October 1 approval date for the Family Contribution Schedules. If any of the data elements are changed as a result of the discussions on the Schedules, it is highly likely that the timetable for the 1978-79 application process would be severely delayed. Therefore, we are requesting your concurrence that the current data elements be maintained for use in the 1978-79 Family Contribution Schedules and that no additional data elements be added. Of course it will still be possible to make adjustments in the Schedules through the various offsets, allowances and assessment rates. In previous years it has been in these areas that the majority of changes have been made. For example, there have been revisions to the family size offsets, asset reserves, and the approach to assessing farm and business assets. In each of these cases it is not the data elements that have been affected, but rather the method of calculating the expected family contribution. We have submitted for the record as Appendix B a list of the current data elements that are needed in the determination of Basic Grant eligibility. If it is agreed that these are the key elements upon which to base the Family Contribution Schedules, we shall continue on schedule with the development of the simplified student financial aid application procedure for 1978-79. PROPOSED CHANGES IN THE FAMILY CONTRIBUTION SCHEDULES FOR 1978-79 At this time I would like to discuss briefly the changes we are proposing for the Family Contribution Schedules for the 1978-79 academic year. These changes, reflecting some of the concerns which have been expressed about the program during the past year, have been published as an NPRM on July 12. However, I would like to review them at this time for the record. 1. TREATMENT OF FAMILY SIZE OFFSETS The proposed amendments to the Family Contribution Schedules provide a 6 percent increase in the family size offsets to be used during the |