-4 higher student aid awards. However, there is a new group of single, independent students, often called displaced homemakers, who find themselves widowed or divorced after many years of economic dependence upon their spouses and whose children are grown and no longer living at home. Clearly, federal statute should not adversely affect displaced homemakers who need education and training to build new lives and to make themselves economically independent. We hope the Senate will follow the House's lead in allowing child care costs to be included as legitimate expenses in a student's financial aid budget. This will certainly help many potential college students who would enroll if they could help finance the care of their young children during the classroom hours. We also applaud the House provision which will allow student aid officers to determine the commuting allowance that can reasonably be expected to occur for off-campus room and board in a particular region. A national figure of $1,100, as is now the case, simply is not realistic for many parts of the country and for adult students who do not live with their parents. We also agree that the miscellaneous allowance for books and expenses should be raised from $400 to $600 to reflect the effect of inflation on the cost of necessary learning tools. We support the movement of the Administration toward the adoption of one need analysis system and one need analysis form for all federal student aid programs. In the past the forms have been just too long and too complex for most students and their parents to understand. support the idea that the Congress should have the paramount responsibility We also -5 in deciding what parameters are used to assess "financial need" in need analysis. As long as need analysis is used as a rationing device to distribute student financial aid, then the Congress, as representatives of the people, should make the political decisions on who should get what. Leaving most of these decisions to non-elected bureaucrats or to private processors is not in the public interest. Lastly, Mr. Chairman, let me reiterate the support from this nation's 1200 community and junior colleges for the compromise provisions as embodied in the House bill on the Basic Grant and Supplemental Grant programs. Although these changes do increase the cost of the grant programs somewhat, the provisions also create a strong and united base for the continued support of postsecondary educational programs. If these changes are adopted by the Senate, the postsecondary educational community at long last will be working together representatives of all types of in support of federal education policy. There can be no better federal investment in the future of this nation than in support of education programs designed to extend postsecondary educational opportunities to all and to strengthen the productive skills of citizens for the decades ahead. institutions Thank you, I will be pleased to answer any questions. -5 ATTACHMENT A THE EFFECT OF THE ONE-HALF COST PROVISION ON THE BEOG AWARD OF THREE RECIPIENTS ATTENDING THE SAME INSTITUTION Case 1: The Student is from a family of four; family income is $6,000. The The BEOG award is computed as follows: (BEOG Maximum) $1800 0 $1800; but since the award cannot surpass one-half of 1.e., $1900/; the BEOG award to the student in Case 1 is reduced to $950. Unmet need remains at $950. cost, Case 2: Case 3: A second student attends the same institution. This student's family income is approximately $12,000; and the expected family contribution is about $500. This student's BEOG award is calculated as: BEOG Maximum $1800 500 = $1300; the BEOG is reduced to one-half the cost of attendance to $950. The unmet need for the student in Case 2 remains $1900 (cost of attendance) 950 (BEOG) - 500 (expected family contribution) or $450. A third student attends the same institution. Family size is four; family income is $18,000 and cost of attendance equals $1900. The expected family contribution is $1000. The BEOG award for the Case 3 student is calculated as: $1800 1000 - $800; since $800 is less than one-half the cost of attendance, there is no reduction. The unmet need for the student in Case 3 is only $100, i.e., -7 The family income of the Case 3 student is three times the amount of the family income of the Case 1 student, yet the BEOG amounts are very similar. The BEOG awards are identical in the situations of Case 1 and Case 2 students, even though the family income in Case 2 is twice the family income in Case 1. The half-cost provision has no effect at all on the student in Case 3 since the family income is high enough to bring the family into the middleincome range. The half-cost provision affects only students whose family incomes are below the middle-income range. The poorest of all college students, where the expected family contribution (EFC) is zero, are harmed the most. Clearly, the one-half cost provision is a regressive social policy that we can all live without. SUMMARY OF THE EFFECT OF THE BEOG ONE-HALF COST PROVISION Students are dependent is all cases. Tuition equals $400. Senator PELL. Senator Javits, do you have an opening statement? Senator JAVITS. No, thank you. I just came because I realized the importance of this question, especially to many institutions in my State, and Dr. Eggers is here representing some of the great ones, and I just came to be informed. I hope very much that we can find a way to make this percentage higher, and of course, I will do my utmost to see what can be done. Senator PELL. Thank you. Dr. Coor, if the subcommittee were unable to adopt all of the elements of the half-cost compromise, what elements do you see as the most important? Dr. COOR. The concept that is most central to the efforts of all of the higher education associations is to see that balance exists as between the basic educational opportunity grant program, the special educational opportunity grant program, and the loan provisions that are attached thereto. It is important that all of those move forward in balance. If this committee and the Senate were unable to adopt the magnitudewe would hope, of course, that that is not the case, but if they were unable to adopt the magnitude of the overall plan, we believe it important that each provision move forward so that half-cost limitation begins a progression, balance of support for the basic educational opportunity grants and the SEOG's move forward so that the structure we have designed be able to act itself out in the fashion we have described. Senator PELL. Have any of you made an estimate of the cost of the compromise, the cost to the taxpayer? Dr. COOR. If we take the grant program itself, and of course, that is different from all of the provisions that have been there, the best estimate we have that the BEOG increase would be $900 million over the 5 years of the authorization. Of that $900 million, $200 million would be contained in the increase of the half-cost provision. The bulk of that, Senator, would take place, we are informed, in the first year of its implementation. It would be more gentle beyond that. Senator PELL. The estimates we got are a little bit different in the sense that the total cost is estimated to be $12 billion. You point out about $900 million in the basic grants. But then the triggers would make up an extra $600 million. This is the problem we face. The House bill, as you know, is somewhere between $2 to $3 billion more than the administration proposal, and this question that you are raising here, this compromise, is part of the reason for that increase in cost. Dr. COOR. The triggers themselves, as we understand them, in the first year, particularly the funding threshhold for the SEOG's, in the first year, would not make a significant difference. It would be slightly less than a 7-percent increase. There will be, of course, an added amount when that threshhold would go to the $480 million. Senator PELL. You would not disagree with the total figure of $12 billion, the figure we get? |