We originally estimated that the cost of raising the sum of the asset reserves for farmers and businessmen to $50,000 could reach $50 million. However, our later, more detailed analysis of our statistical data on these two categories of applicants indicates that the cost will be approximately $24 million. Given this expenditure, $66 million would remain which could be applied against the asset reserve for non-farm and business assets reported by applicants, instead of the $40 million originally designated by the appropriation committee. If the entire $66 million were to be used for this purpose, we estimate that the asset reserve could be raised from its current level of $12,500 to $17,000. Our 1976-77 applicant data indicates that about 67 percent of all applicants reported an asset equity below $17,000, and approximately 66 percent of the farmers and 85 percent of the businessmen reported an asset equity below $50,000. Appendix A includes three charts concerning asset holdings of the Basic Grant applicant population which we would be happy to discuss with you. As you know, we did not include a proposal to raise the level of the asset reserves among the proposed changes for the 1978-79 academic year. However, if the Committee agrees to the suggestion that we raise the sum of reserves for farmers and businessmen to $50,000 and use the remainder of the $90 million to raise the reserve for non-farm and business assets to $17,000, we shall include these changes in the 1978-79 Family Contribution Schedule when it is published as a final regulation. |