The Federal Government will pay a portion of the interest on loans insured under this act or under comparable State or nonprofit private loan insurance programs. The Federal subsidy will pay all of the interest while a student is in school and 3 percentage points thereafter. Only students from families with adjusted incomes of less than $15,000 annually will be entitled to the Federal interest subsidy.

Loans made by eligible lenders to eligible students will be insurable under this act only if, among other requirements

(1) the agreement provides (except for special cases involving Armed Forces or Peace Corps service or study outside the United States) for repayment over a period of not less than 3 nor more than 6 years, which period will begin not less than 9 nor more than 12 months after the student ceases to carry at least onehalf the normal workload at an eligible institution; and

(2) the agreement provides that, except under unusual circumstances, the interest rate will not exceed 6 percent per annum. Appropriations of $250,000, plus such other sums as may become necessary, are authorized to establish a vocational student loan insurance fund from which the Commissioner will make payments in connection with the default of loans insured under this act.

The Secretary of Health, Education, and Welfare will establish an Advisory Council on Insured Loans to Vocational Students, consisting of the Commissioner of Education as Chairman and eight other members. The Council will advise the Commissioner on the administration of this act.

A special section of the Higher Education Act of 1965 prohibits a student from deriving loan benefits under both of these acts in any single year. An Advisory Council on Insured Loans to Vocational Students will oversee the policy issues involved in administering this

act.

VI. INVESTIGATIVE ACTIVITIES

The problems involved in providing full educational opportunity in urban public schools were investigated by two special subcommittees. The first, a special subcommittee to investigate de facto racial segregation in the public schools of Chicago, held hearings on July 27 and 28, 1965, in Washington. The hearings were conducted by Chairman Adam C. Powell and attended by nine other members of the full committee. The main witness was Benjamin C. Willis, the superintendent of the public schools of Chicago. Various other persons concerned with the crisis of a school system whose elementary students attend schools that are 82 percent segregated (from 90 to 100 percent of the student body belongs to one race) testified, including a representative of a parental organization opposed to integration as well as spokesmen for various local civil rights groups. The hearings highlighted the growing conflict in northern cities between educational systems based on neighborhood schools and integrated, quality education.

The second special subcommittee, the task force to investigate the District of Columbia poverty program and the school system, was chaired by Representative Roman C. Pucinski, of Illinois. It held hearings on October 7, 8, 12, 26, and 27, 1965. School Superintendent Carl Hansen, United Planning Organization Executive Director

James Banks, and the District of Columbia Commissioners were among the 43 witnesses heard by the task force. The hearings focused on the relationship between the kind of education offered District citizens and the impoverished conditions of life suffered by one-third of them.

SPECIAL PROGRAM SUPPORT

An intensive effort was made by the committee to provide significant assistance to disabled persons, older Americans, and delinquents, and to establish a positive Federal program of support for cultural activities, the arts, and the humanities.

I. THE DISABLED

A. Public Law 89-333, the Vocational Rehabilitation Act Amendments of 1965 (H.R. 8310): The passage of H.R. 8310 resulted from 4 years of vigorous committee study and work to develop and promote legislation which would help thousands of persons with problems of disability.

Introduced on May 20, 1965, by Representative Dominick V. Daniels, of New Jersey, H.R. 8310 was referred to the Committee on Education and Labor, and reported out on May 28, 1965 (H. Rept. No. 432). H.R. 8310 passed the House on July 29, 1965, and passed the Senate, amended, on October 1. The bill then was committed to conference, and a conference report was filed on October 21, 1965 (Rept. No. 1204). The Senate agreed to the conference report that same day; the House agreed on October 22. The act was approved by the President on November 8, 1965, and became Public Law 89-333.

The Vocational Rehabilitation Act Amendments of 1965 substantially improve the old act, as amended. The major change made in the existing methods of financing State rehabilitation services and facilities consists in the increased size of the Federal share for basic support and project grants.

The Federal share of the basic support grants under section 21 which assists the States in meeting the costs of their vocational rehabilitation services, is a flat rate of 75 percent beginning with fiscal year 1967. Specific ceilings of $300, $350, and $400 million were set on the authorizations for fiscal years 1966, 1967, and 1968, respectively.

The Federal share of grants to the States for improving their services through innovation projects was changed to 90 percent for the first 3 years of their duration and 75 percent for the last 2 years (fiscal year 1966, $5 million; fiscal year 1967, $7 million; and fiscal year 1968, $9 million).

New sections in the 1965 amendments were added to encourage the construction and improvement of workshops and similar rehabilitation facilities. Federal grants to the States-following the HillBurton formula-encourage the construction and initial staffing of facilities, particularly of a vocational rather than purely medical nature. Grants for workshop improvement projects at the Federal share of 90 percent-allow longer periods of training in occupational skills. (The training services grants under this act are intended to be comparable to the Federal assistance given to the training of non

disabled persons under the Manpower Development and Training Act.)

In connection with workshops, other new features are provided by this legislation. Grant funds may be used not only for new construction and for initial staffing, but also for acquisition of existing buildings and land. An experimental provision permits the use of grant funds for construction of residential accommodations for the mentally retarded, as well as other disabled groups, as designated by the Secretary of Health, Education, and Welfare. Constant self-scrutiny is encouraged in the workshops as a result of standards set by a newly established National Policy and Performance Council.

Two features of the new legislation are aimed especially at this country's efforts to improve the national rehabilitation record. The old requirement to show economic need has now been deleted from the Federal law in order to encourage States to make people eligible for rehabilitation services on the basis of their handicap rather than of their poverty. And persons heretofore proclaimed unsuitable for rehabilitation will now be given a trial period of up to 6 months of services (or up to 18 months for mentally retarded persons) to determine their rehabilitation potential.

In general, the committee provided legislative authority for support through financing, rehabilitation facilities, and trained manpower on a far higher level than ever before. The number of disabled persons rehabilitated under the program in 1965 was almost 135,000. This new legislation, hopefully, will make it possible to rehabilitate as many as 200,000 disabled persons in the next year, and 4 or 5 times this year's achievement in the next decade.

B. Public Law 89-258 amendments to the act providing for a loan service of captioned films for the deaf (S. 2232), amends the act entitled "An act to provide in the Department of Health, Education, and Welfare for a loan service of captioned films for the deaf," approved September 2, 1958, as amended, in order to further provide for a loan service of educational media for the deaf.

S. 2232 was introduced by Senators Claiborne Pell, of Rhode Island, and Edmund S. Muskie, of Maine, on June 30, 1965. The bill passed the Senate on August 31, 1965, and was referred to the Committee on Education and Labor on September 1, 1965. It was reported from the committee on September 20, 1965 (Rept. No. 1034). S. 2232 passed the House under suspension of the rules on October 5, 1965. The act was approved by the President on October 19, 1965, and became Public Law 89-258.

The act authorizes the Secretary of Health, Education, and Welfare to establish a loan service of captioned films and other educational media for nonprofit purposes to deaf persons, parents of deaf persons, and other persons directly involved in activities for the advancement of the deaf.

Under the provisions of the act, the Secretary may acquire films (or rights thereto) and other educational media, lease or purchase equipment, provide for the captioning of films, provide for the distribution of captioned films and other educational media and equipment through State schools for the deaf and other agencies designated by the Secretary, and provide for the conduct of research in the use of educational and training films.

C. Under section 6 of Public Law 89-313 of disaster impact aid (H.R. 9022), payments are permitted under the Elementary and

Secondary Education Act of 1965 to State-operated schools for the mentally and physically handicapped which had not been included in the latter act as passed. It is estimated that up to 85,000 children will benefit from this provision. (For new figure, see attachment.)

II. OLDER AMERICANS

A. Public Law 89-73, Older Americans Act (H.R. 3708) creates a new agency, the Administration on Aging, in the Department of Health, Education, and Welfare, to serve as a clearinghouse for information and a coordinating mechanism for the many Federal activities relating to the aging and aged. The act authorizes a 5-year program of grants to the States for community planning, demonstration projects, training of personnel, establishment of new services, and expansion of existing services for the elderly. There are also provisions for research and development projects and for training projects to study and assist the elderly in their communities with new techniques and methods of service. The goal of this legislation is embodied in its statement of objectives, a catalog of what the Federal Government sees as its responsibility to its older citizensadequate income, high standards of health, decent housing, honorable retirement, employment opportunities, restorative services, and the like.

H.R. 3708, the Older Americans Act of 1965, was introduced by Representative John E. Fogarty of Rhode Island on January 27, 1965, and referred to the Committee on Education and Labor. The bill was reported from the committee on March 9, 1965 (Rept. No. 145), and passed the House on March 31, 1965. The Senate Committee on Labor and Public Welfare reported the bill on May 26, 1965 (Rept. No. 247), and passed an amended version on May 27, 1965. On July 6, 1965, the House agreed to the Senate amendments. The act was approved by the President on July 14, 1965, and became Public Law 89-73. The needs of this Nation's elderly are growing and our present programs do not meet the increasing demand for services. Between now and the end of the century, an estimated 65 million people will reach 65 years of age, and some 20 million persons will move from early old age to advanced old age. The Older Americans Act addresses itself to both groups, today's and tomorrow's elderly. It is an attempt to narrow the gap between needs and services for now and for the future, and a national commitment to enrich the lives of the elderly.

B. The Economic Opportunity Amendments of 1965 contain a provision for the consideration of the elderly poor in the development, conduct, and administration of programs under that act, whenever feasible.

III. THE DELINQUENT

Two pieces of legislation handled by the committee focused upon crime prevention and correctional rehabilitation.

A. Public Law 89-69, extension of the Juvenile Delinquency and Youth Offenses Control Act of 1961 (H.R. 8131)

This act extends the basic law until June 30, 1967, without substantially changing it and authorizes the expenditure of $6.5 million and $10 million in fiscal years 1966 and 1967, respectively.

H.R. 8131 was referred to the Committee on Education and Labor. It was reported from the committee on May 20, 1965 (Rept. No. 363). It passed the House on June 24, 1965, and the Senate on June 29, 1965. It was approved by the President on July 8, 1965, and became Public Law 89-69.

The committee intends to review the progress of all the activities developed under this legislation in the next session of the 89th Congress. Four comprehensive community demonstration projects were continued, and 12 developed under the original act will no longer be funded. The latter are being phased into the war on poverty community action programs. Special demonstrations and training programs are expanded in order to reduce the critical shortage of professional youth workers and to upgrade the competence and skill of all law enforcement and correctional personnel.

B. Public Law 89-178, Correctional Rehabilitation Study Act of 1965 (H.R. 2263)

The act provides funds for a program of research and study of personnel practices and needs in the field of correctional rehabilitation, and of the availability and adequacy of training resources for persons in or preparing to enter this field.

H.R. 2263 was introduced on January 11, 1965, by Representative Edith Green of Oregon. The bill was referred to the Committee on Education and Labor. It was reported from the committee on May 27, 1965 (Rept. No. 381). It passed the House under suspension of the rules on June 21, 1965. It was reported in the Senate from the Committee on Labor and Public Welfare on August 6, 1965 (Rept. No. 543). It passed the Senate, amended, on August 11, 1965. The House agreed to the Senate amendments on August 26, 1965. The act was approved on September 10, 1965, and became Public Law 89-178.

IV. CULTURAL AND HUMANITIES PROGRAMS

Two pieces of legislation handled by the committee provided Federal support for the humanities and the arts.

A. Public Law 89-209, National Foundation on the Arts and the Humanities Act of 1965 (H.R. 9460)

This major piece of legislation establishes a National Foundation on the Arts and the Humanities for the purposes of developing and promoting a broadly conceived national policy of support for the humanities and the arts.

The National Foundation on the Arts and the Humanities Act of 1965 was introduced as H.R. 9460 by Representative Frank Thompson, Jr. of New Jersey on June 24, 1965. The bill was referred to the Committee on Education and Labor. It was reported from the committee on July 14, 1965 (Rept. No. 618). It passed the House on September 15, 1965. This passage was subsequently vacated; S. 1483 was amended to certain House language and passed in lieu thereof. On September 16, the Senate concurred in the House amendments to S. 1483. The National Foundation on the Arts and the Humanities Act of 1965 was approved by the President as Public Law 89-209 on September 29, 1965.

The Foundation consists of the National Endowment for the Arts and National Endowment for the Humanities coordinated by a