their functioning. As I see it, some are very well used and very effective and others are much less well used.

I think perhaps on the whole we overdo the number of advisory councils.

Mr. QUIE. The chairman used the words "phased out." Would "eliminate" be better?

Mr. Howe. Yes, "eliminate."

Mr. QUIE. Let me also ask you about the councils, you say these are to include persons broadly representative of the fields of education arts, sciences, humanities, and general public. The worrying concern would be, who are you going to pick from education, the other ones not having quite the controversy involved. What kind of mix do you expect to have for people representing education?

Here, I am thinking of the institutions of higher learning where you have universities, teacher colleges, junior colleges, large schools, small schools, and so on.

Secretary GARDNER. As you know from the bill, the majority of them have to be teachers. I would assume that we would attempt to get the kind of mix that we normally do when we are trying to get representative councils.

Would you like to comment on that, Mr. Howe?

Mr. Howe. I think we would certainly want to include some of the most appropriate people engaged in planning for the education of teachers; I am certain there would be someone on the council who had had the responsibility of a deanship in a school of education or broad responsibility for planning the education of teachers in a State.

This background is important for such councils. We, of course, have consideration of geography and other matters that get into creating a balanced group.

Mr. QUIE. What about the school themselves? Would you have a mix of the larger school systems and the smaller ones?

Mr. Howe. Well, there are limitations in numbers but the act itself provides that there must be teachers involved. We would want to get representative people. We might seek teachers who had had a broad experience through teacher organizations and groups which have been concerned professionally about teacher education.

But we would have classroom teachers on the council.

Mr. QUIE. What about administrators?

Mr. Howe. I would think, depending on how the balance of the thing worked out, it might be that a dean of a school of education would also represent this category, but we want people who had a major responsibility for in-service activities in a school system and this in school administrators.

Mr. QUIE. How about State departments of education?

Mr. Howe. Well, the danger here is you are going to create so many categories, that the size of the counsel is going to grow, so it just seems to me we have to realize that one individual may bring in his own background several of the kinds of categories you are talking about.

Mr. QUIE. Do you think it would be possible that you would leave out State departments of education?

Mr. HowE. No; I don't think so. I would think we would want to have that experience. Whether he is serving would not be a matter of

issue but a person who had the experience it seems to me would be important.

Mr. QUIE. Now, another subject, student assistance. Why wouldn't it be wise to provide the same kind of student assistance for anyone who goes on to school beyond high school, whether it be to a college, university, or a school of vocational education?

Secretary GARDNER. Well, it seems to me this would be perfectly legitimate if you can define the kinds of institutions. You are speaking of what, technical institutes?

Mr. QUIE. Technical institutes or strictly what you would say are 1-year terminal programs of vocational education.

Secretary GARDNER. These are included in present programs, yes. Mr. Howe. There is, Mr. Quie, the vocational student loan program, of which you are aware. The students in community colleges are eligible for opportunity grants. Is this correct, Mr. Muirhead?

Mr. MUIRHEAD. That is right.

Mr. Howe. The work-study arrangements may operate in community colleges. I think the useful category to think about is the postsecondary category, and sometimes we use the phrase “higher education," you think of 4-year colleges and universities, and we are really addressing ourselves in these student-aid programs to postsecondary study.

Mr. QUIE. Whether it is in an institution of higher learning or not, because there is a great expansion of vocational education types of institutions?

Mr. Howe. This is where the vocational student loan program has opened up a new field and we have had an interesting experience working our way through all of the proprietary institutions administratively which offer vocation training and deciding how they should be properly included and what arrangements for accreditation there might be for such institutions.

Mr. QUIE. Can you make the direct loan to that institution?

Mr. Howe. These loans are not to proprietary institutions at all, but students in the institution and the entire relationship is to the student in the institution. We would not make a loan to such an insitution.

Mrs. GREEN. The time of Mr. Scherle has expired. Let me take my 10 minutes. The Senate by a rather substantial vote has approved a tax credit plan. What would be the recommendation, and I am sure you thought about it, if this should become law, on the other student assistance programs?

Secretary GARDNER. I don't think we have thought through a position on that, Mrs. Green. I think we have been hoping it would not become the law. As you know, we are opposed to tax credit plans. In my view, if a tax credit plan passes there would remain a considerable need for the other student programs. I would like to get the Commissioner's view.

Mrs. GREEN. Let me say, before when you presented the guaranteed student loan program to the committee, I think you never gave us an estimate of the cost. Do you have an estimate of the cost of the guaranteed loan program?

Secretary GARDNER. We can provide it.

Mr. Howe. We can provide it. It will have to depend in turn on our estimate of the number of students who will take advantage of it. We have some estimates and will base our costs on those.

Mrs. GREEN. Can you give us a guess this morning? Do you have any recollection of what the cost might be?

Mr. MUIRHEAD. Well, the cost, Madam Chairman, for the guaranteed loan program, the cost is the payment of the interest subsidy and we have in our materials the amount that is estimated for the interest subsidy next year. We can make projections for subsequent years as the program grows.

Mrs. GREEN. What is the cost for next year, the estimate?

Mr. MUIRHEAD. I don't have that figure at hand. I can readily get

it for you.

Mrs. GREEN. I think some of the other members of this committee are taking a second look at this tax credit proposal in relation to the success or lack of success of the guaranteed loan program. There was an article in yesterday's paper in terms of the contributions for education which are tax deductible, although not a tax credit. It amounts to 17 percent of the total or $2.3 billion for last year.

That is where businesses, corporations, and individuals who want to contribute to a scholarship fund can deduct, of course, up to the ceiling. What is the justification then for the fact that I, as a parent, cannot deduct anything for the education of my own children, although I can contribute to any number of scholarship funds for other children and deduct the full amount of the contribution? What is the justification for this, in terms of cost, if we allow corporations and businesses, and individuals to contribute to education up to $2.3 billion, but then the Treasury opposes this amount in terms of a tax credit for grown children?

Mr. MUIRHEAD. Well, the educational and charitable deductions have a long, long history in fact and law, and they are based upon the principle of philanthropy, unless the act is a philanthropic act in which interest is presumably not involved, he does not fall under that category.

I think most tax specialists just would not compare them. They are just two different kinds of questions.

But I am not a tax expert. I can tell you why we don't favor the tax credit. We don't favor it for the reason it does not reach the youngsters who are most in need and to those it does reach it. will have soon been countered, we believe, by rising tuitions; that is, it will be a form of institutional subsidy in effect for private institutions and this has run through all of the conversations about the tax credit, that private institutions will raise their tuition when the tax credit is available so people can pay more.

So, in effect, it will not be aid to the students, nor will it be aid to the parents, it will be subsidies to institutions.

Mr. Howe. Could I add, Mr. Secretary, that it will create a pressure on public institutions which have been endeavoring to hold down their tuition rates and some of them which have been endeavoring to maintain free and open public education to abandon that policy because it creates an additional source of possible support for them.

It seems to me that the guaranteed loan program with the change in interest rates, gives us an opportunity of really opening up widely

benefit to middle-income people, that we have a much better solution to that particular problem than in the tax credit because of the institutional implications.

Mrs. GREEN. Under the work-study, the NDEA loans and the economic opportunity grants, the administration certainly had designed a program that would enable a needy student to go to college. It would be my judgment there would be no student who could really say because of need he was forced to abandon any higher education.

The guaranteed loan program was designed primarily for those students who come from middle-income families. The guaranteed loan program, I think, for a variety of reasons has not met with the success that either the administration or Congress hoped it would have. If that were successful I certainly would favor that or I would favor a liberalization of the NDEA program.

In the absence of these two, what kind of a program would you recommend for the students who come from these middle-income families who, I think, are having the greatest trouble in sending their youngsters on to college because they cannot apply under NDEA and they cannot apply or don't ordinarily have the opportunity grant or the work study.

Secretary GARDNER. Well, there are a variety of possible solutions. I think we are all still banking more than you are on the guaranteed loan. It is perfectly clear that there are different patterns of institutional arrangements that put less of a financial burden on students. For example; the urban institution and junior colleges, colleges where the student can live at home.

As I said, I rather favor the program which worries Mr. Gibbons, a more liberal college work-study program which could reach a broader group of students. I do hope we can be a bit more patient about the guaranteed loan program.

Mr. QUIE. I would like to make one comment. I recall 2 years ago an estimate was made that tuition costs would increase 50 percent over the next decade. This is without the tax credit bill going through.

It seems to me that you are giving, or will be giving blame to the tax credit proposal for what is going to happen anyway, tuition costs are going to go up.

Secretary GARDNER. I think that most of the people who have examined this plan believe that if the tax credit goes through, there will be a further rise, perhaps not to the total extent of the tax credit, I think the general estimate is around 75 percent, that about 75 percent of the funds would be recouped by the educational institutions in the form of tuition.

Mr. QUIE. Last year, or 2 years ago the same argument was used about the educational opportunity grants; that is, if the Federal Government provided scholarships or such for undergraduate work, this would push the rate up, and that tuition was held down because of the low-income people attending, not the higher income people. Mrs. GREEN. Congressman Reid.

Mr. REID. Thank you. I wanted to ask one question on the point you were raising, and I very warmly welcome you-I am sorry I was not here when you started to testify. In pursuance of the questions of the chairman, as I recall, the Office of Education initially expressed the

hope that some 750,000 to 1 million students would, in due course, annually, participate in the guaranteed loan program.

I believe the testimony before our committee, at least on the west coast, tended to indicate that the projections were perhaps a third to a half less than that. I think that is true as well in the State of New York. I have just one question in two parts:

One, what are the figures that you presently have percentagewise or otherwise, on whether the guaranteed loan program is in fact working to the extent it was projected; and, second, is it not possible to visualize a mix between a guaranteed loan program and some tax relief, particularly for the middle-income family that is trying to finance two or three members of that family going to college at the same time?

I had in mind those in the $10,000 and 20,000 income level. It would seem to me they would be caught in this squeeze, because I don't believe the guaranteed loan program is entirely meaningful, and wouldn't it be worth taking a look at that area that does not seem to be fully met. Secretary GARDNER. Mr. Muirhead has the figures and will give them to you. Let me first answer your last question. I would heartily agree we need to give more attention to this income, and we will do so. Mr. REID. Thank you, Mr. Secretary.

Mr. MUIRHEAD. Yes, on the guaranteed loan program, I think we should, of course, point out that the guaranteed loan program has got off to a halting start, but, nevertheless, this year, the first year under the operation, we have had rather good cooperation from the banks, there are in operation now 50 State agencies to operate the program, and despite the difficulties, and there could not have been a more inopportune time to start such a program; but despite those difficulties, by the end of this college year there will have been made loans to 460,000 students amounting to $400 million.

Now, to put that into the proper perspective, I think you have to compare it with NDEA loan program, which all of us support and support strongly. The guaranteed loan program, in its first halting year, is now at a higher level than the NDEA loan program which has been in operation for 9 years. The projection for next year for the guaranteed loan program is, it will reach 750,000 students.

Mr. REID. Might I ask one technical question? Will this be the case if we revert to high interest rates throughout the economy? In other words, is this program dependent on low interest rates essentially?

Mr. MUIRHEAD. Well, Congressman Reid, the achievement of the program, the achievement this first year was during a period of high interest rates. There is every indication that the interest rates will not be as high next year.

We are making the assumption they will not be as high next year. The program is expected to rise to 750,000 students with somewhere in the neighborhood of $650 million next year. So it is a significant program. The law which the Congress passed does provide for the support of the program ultimately at the level of $1.4 billion in terms of a Federal guarantee.

So it really is a significant program. I am inclined to believe it is going to move rather rapidly next year.

Mr. REID. Thank you, Madam Chairman.

Mrs. GREEN. Let me make one other statement. I wish the Department would look at it in terms of the tax credit and what recommendations you should make on the other programs.