The CHAIRMAN. There has been some question-before the Rules Committee that this program duplicated the National Defense Education Act.

What is your response to that?

Dr. TERRY. My response to that, sir, is that this goes considerably further and is, in effect, more patterned to what we feel the needs are than the National Defense Education Act loans.

In the first place, the maximum under National Defense Education Act is $5,000, with not more than $1,000 a year.

Under this proposal, H.R. 12, it is $8,000 in 4 years, but not more than $2,000 each year.

In the second place, with regard to the repayment period, National Defense Education Act has a 10-year repayment period, beginning 1 year after graduation.

H.R. 12 proposes a 10-year repayment period, but beginning 3 years after graduation.

Insofar as the interest rates are concerned, there is no interest on National Defense Education Act until 1 year after graduation, and then 3 percent on the unpaid balance.

There is no interest on the proposed H.R. 12 loans until 3 years after graduation, and then the rate is same as the National Defense Education Act.

I think, finally, the most important of the whole thing is the forgiveness feature. At the present time the only forgiveness provision in the National Defense Education Act loans is in connection with teaching in primary and secondary schools, which, obviously, these professional people would not do.

In other words, even if they went into a medical school or a university to teach, there would be no forgiveness under the National Defense Education Act. On the other hand, under H.R. 12, there would be forgiveness not only for teaching in medical schools but also for practice in shortage areas and for certain other categories of work, such as Government service.

The CHAIRMAN. Of course, the committee adopted an amendment containing the forgiveness provisions during our consideration of H.R. 4999 last year, and that is the reason those provisions are in this bill.

Dr. TERRY. Yes.

The CHAIRMAN. The overwhelming sentiment of the committee at that time, as I remember it, was that it would be a good thing to have. But I wanted information as to the claim made by members of the Rules Committee, particularly, when we were over there last year, that this is a duplication of the National Defense Education Act.

It was my understanding that there is no duplication at all; that the plain facts were that with respect to medical students, the provisions of the National Defense Education Act simply would not apply, cause of the cost and the number of years necessary for their training. Now, was I correct in that or not?

Dr. TERRY. In my opinion, you were, sir.

The CHAIRMAN. Now, then, from actual experience, have there been any medical students under the National Defense Education Act?

Dr. TERRY. Yes, sir, there have been quite a few. In the fiscal year of 1962, there were 3,213 students in the schools of medicine and 437

students in schools of osteopathy and 1,881 students in schools of dentistry, who received loans under the National Defense Education Act.

The average loan per student for medical students was $640; for osteopathic students, $654; and for dentists, $692.

In the absence of any specific provisions such as those incorporated in H.R. 12, sir, students in medicine, dentistry, and ostepathy have taken advantage of the provisions of the National Defense Education Act.

The CHAIRMAN. Now, what would be your feeling if there were a provision included in the bill requiring no duplication or overlapping? Dr. TERRY. As a matter of fact, Mr. Chairman, the bill provides that if there are loans under the other, that this has to be substracted from the amount available to that individual. In other words, there could not be duplication in that respect, sir, the way the bill is written. The CHAIRMAN. I think there are some who would want to make that restriction abundantly clear: That there would not be two programs, even thought one of them is most inadequate for this particular purpose.

Mr. SPRINGER. Mr. Chairman, would you yield for one question? The CHAIRMAN. Yes.

Mr. SPRINGER. Dr. Terry, under your provision in this bill, is there any basis of need?

Dr. TERRY. Yes, sir. That is a specific stipulation in the law, in the bill: That there has to be a demonstrated need in the view of the responsible administration of the institution in which the student is registered or to be registered.

Mr. SPRINGER. Does that include parental contributions?

Dr. TERRY. I am sure it must, because hardly anyone at that age is independent without parental contribution.

Mr. JONES. Mr. Springer, I might answer that out of experience of administering a loan program in a university that included medical and dental students. The institutions of the country have developed criteria upon the basis of which they determine the financial needs of students for the meager scholarship and loan funds that are available to them. They take into account the total financial resources available to the individual student.

In many instances this involves the capacity of the parents and the family to support them. In some instances, the families are broken. In some instances they have no resources. In some instances the student is beyond an age limit and has been disassociated from his family to the point that he cannot rely on that kind of support.

Mr. SPRINGER. Let me interrupt you just to bring this up short.
Mr. JONES. Yes.

Mr. SPRINGER. Has this criteria been applicable to the National Defense Education Act?

Mr. JONES. Yes, sir.

Mr. SPRINGER. You know that to be a fact?

Mr. JONES. Well, the institution applies its own criteria, and they use the same criteria to apply to the National Defense Education Act as they use in their own loan programs.

Mr. SPRINGER. You know that to be a fact?

Mr. JONES. Well, in terms of my own experience, this is a fact. I cannot speak for all institutions. This is the philosophy under which

the institutions accept the money, and I would assume that generally this has been true. There may be exceptions. It is true in the insti

tutions that I know about.

Mr. SPRINGER. That is all, Mr. Chairman.

The CHAIRMAN. Now, one other thing. This bill provides for a 10year authorization program, which means during the next 10 years it is contemplated that a program would be budgeted for the purpose of carrying out the program. Contrary to what Mr. Devine indicated a moment ago, the construction program, under the bill reported last year, was for 10 years, and it was so as submitted by the department at that time. This bill provides for 10 years.

I believe, the bill which was reported last year provided for a 5-year loan program, and I am sure that is what Mr. Devine referred to a moment ago. Since the record is not clear, I do want the record to be straight on it.

Now, in view of the importance of this program, what would be your reaction to the committee adopting, say, a 3-year program and giving it a trial to see how it works?

Secretary CELEBREZZE. Mr. Chairman, on a grant program, you might, but on a loan program, I do not see how you could possibly go on a 3-year basis, because your basic education course is 4 years in medicine; that is, I am talking about medical schools. Certainly, you would have to go that far to cover the beginning to the end of the 4 years.

The CHAIRMAN. Of course, you would have the same problem there, Mr. Secretary, whatever number of years you set, unless you say it is a 10-year program. At the end of 6 years, you cut off all loans to new applicants.

Secretary CELEBREZZE. Under the provisions of the bill, no applicant can get a new loan after the year 1968, but you still have to pick up at that point the additional 3 years, and I assume by that time that our revolving fund may have started where some of this money is being paid back in, which we can loan out again.

The CHAIRMAN. Yes, but the committee decided last year, as far as loans are concerned, to limit the program to 5 years. Now, I am sure, from my recollection of it, that that was because we intended taking a look at it at that time to see how it was working.

I have been thinking pretty much along the lines of having a more limited program so that we will have the opportunity of seeing how it is coming along. At the end of that time we can determine whether or not it is justifying the decision of the committee and the Congress.

Secretary CELEBREZZE. Well, of course, under a 3-year program, Mr. Chairman, generally you lose a pretty good portion of the first year, so you really only have a 2-year program in which you are geared up to meet it. I am fearful it would be just too short to do the type of job that we have in mind.

The CHAIRMAN. Well, we did the hospital program that way, and it has worked out pretty well.

Secretary CELEBREZZE. That is true. We keep coming back.

The CHAIRMAN. We have the airport program. It was at the outset, I think, an open-end program, and we closed the end, and have been extending it from time to time as the need permits. You do not have the great questions which have been raised about those programs in that respect as you have now about the open-end NIH program.

That is another reason I am scheduling a program to go into that question. I think this committee is going to have to start looking into it.

It has been my experience over the years that with those programs which we limit from time to time, we do not have the same great problems and all of the publicity, as we have in these programs that are given an open-end extension, depending upon the appropriation. I have come to the point of thinking we had probably better start looking at the whole health program with that in mind.

If that is true, we might as well start here.

I was not going to suggest any limitation to the point where the program would not work, but I do know that the airport program has worked very well, and that has been going on since-1945? I know that the hospital program has been working pretty well, and that has been going on since 1946, I believe, or 1947, or somewhere along in there.

Secretary CELEBREZZE. As I say, Mr. Chairman, I would have no objection to cutting it back from the 10-year program, but it would seem to me that, unlike, basically, the hospital program or the airport program, with which I am familiar as a mayor, here we are dealing with loans for 4 years for students in order to complete 4 years of academic work. So I would suggest

The CHAIRMAN. That has to do with the loan features of the bill. Secretary CELEBREZZE. Yes.

The CHAIRMAN. I imagine that those features would have to be given special treatment.

Secretary CELEBREZZE. I thought you were referring to the total program as a 3-year program.

The CHAIRMAN. I have not thought that question through that far. As a matter of fact, I want the committee to think about it. But, anyway, I have been thinking myself of something like that.

Dr. TERRY. Mr. Chairman, may I make a remark there?

I believe the recent authorizations on Hill-Burton hospital constructions have been 5 years. I frankly think that, when you get to dealing with a construction program which is dependent upon when the next session of the legislature meets and the awarding of contracts and all this sort of thing, it would seriously jeopardize such a program if we thought in terms of 3 years; 5 years, I think, would be workable, sir.

The CHAIRMAN. Dr. Terry, we were told that was the case with the airport program; that it would be ruined. I never saw so many chins. hanging low. But, you know, we did it, and I am very glad to say that in the few years since then everybody reports they are getting along fine.

Mr. SPRINGER. Mr. Chairman, might I say that in that case, in the Hospital or Hill-Burton Act, nearly all of those are bond issues in which you have to plan a couple of years ahead. It is even worse than this. This would go to the State legislature to get an appropriation. In those two plans, the airport and the Hill-Burton, they have to even plan for a bond issue, and, yet, they are making it work, and we are getting the benefits of it now.

Secretary CELEBREZZE. The only difficulty is that your State legislatures only meet about 6 months out of every 2 years, and, if you

catch them at the end when they have adjourned, then you have got a year and a half to wait, unless the Governor calls them back for a special session. That has been one of our difficulties.

Mr. SPRINGER. You might be right, Mr. Celebrezze, on Ohio, but in Illinois we never had a bit of trouble. We had a tremendous appropriation program there along these lines.

The CHAIRMAN. And, furthermore, you said a moment ago, Mr. Secretary, that it would take you at least another year, and probably 2 years, before you could get this program going.

Secretary CELEBREZZE. Yes.

The CHAIRMAN. So you would have the accumulation of the first year and the second year getting into it.

Anyway, that is just an idea.

Mr. SPRINGER. Mr. Chairman, I will say there are two things in which this committee has been very interested, and I know some of the southerners have especially been interested in-the amount and the distribution of doctors.

We are hoping in this program we are going to get an incentive to produce more doctors, and, somehow, we are going to get an incentive to put the doctors where they are needed, instead of everybody in the cities and the big towns, that the rural communities are going to get some doctors.

I sure would like some ideas on how that is going to be done.
The CHAIRMAN. Mr. Secretary, thank you very much.

We have kept you much longer than we intended, but we do thank you for your appearance here today and your testimony on behalf of this program.

Dr. TERRY. Mr. Harris, may I submit one thing?

The added medical school within the past year is a former school of osteopathy in California, which was converted to a medical school during the year.

The CHAIRMAN. Thank you, Dr. Terry. You may return at 2 o'clock.

Dr. TERRY. Yes, sir, whenever you say, sir.

The CHAIRMAN. We will hear you and your statement at that time. The committee will adjourn until 2 o'clock.

(Whereupon, at 12:45 p.m., the hearing was adjourned, to reconvene at 2 p.m. of the same day.)

AFTERNOON SESSION

Mr. ROBERTS. The committee will please be in order. Our next witness is well known to our committee, Dr. Luther Terry, Surgeon General of the United States. We are delighted to have you, Dr. Terry. Dr. TERRY. Thank you, sir.

Mr. ROBERTS. Your appearances here have always been very fine and very beneficial to our committee. Of course, I suppose I am somewhat prejudiced in view of the fact that you come from my native State. I welcome you to our committee, and you may proceed with your statement.

94933-63- -6