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reasons:

institutions need financial help if they are to

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make their buildings fully accessible to handicapped persons;
if they are to modify their buildings to conserve energy;
and if they are to replace or renovate antiquated facilities
and equipment so as to make possible the conduct of modern
research, particularly in the sciences.

I am not certain that the mix of funds provided in H.R. 5192 is the correct one. I am concerned that undue emphasis may be given to loans, which are at best a troublesome means for nonprofit institutions to engage in capital con

struction projects, rather than straightforward grants, and

I am not sure that sufficient emphasis is given to the graduate facilities that include most of the research

teaching

as opposed to the enterprise. But some such reform and extension

of federal assistance with the soaring costs of the academic physical plant is absolutely vital, and I urge this Subcommittee to make adequate provision.

My final comment returns to the subject of student aid and to Title IV. One of the reasons that there seems to be insufficient leeway in the overall federal student assistance budget for adequate grant aid is because we now find ouselves spending so much to subsidize studdent loans. It is not at all clear to me that subsidized loans are an efficient

means of providing aid to needy students, especially when

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hundreds of millions of dollars in loan subsidies

will be going to students who, by the definition of Title IV itself, are not "needy." I favor easily accessible loans

to students and parents, and am prepared to see such

Put

loans made directly by the federal government as well as by private lenders, but if adequate provision were made for grant aid to needy students it 'might not be necessary to assume that every federal student loan should be subsidized. differently, some reduction in or limitation on loan subsidies could supply the resources needed to provide more adequate grant aid to low and lower middle income students and thereby equalize their "postsecondary purchasing power" in a much more direct, purposeful and equitable manner.

I hope that the Subcommittee will consider such a modification. I thank you for your attention and would be pleased to answer any questions that members of the Subcommittee might have.

Senator PELL. Our next witness is Dr. Dallas Martin, executive director of the National Association of Student Financial Aid Administrators, and an old friend of the committee.

STATEMENT OF DR. DALLAS MARTIN, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF STUDENT FINANCIAL AID ADMINISTRATORS, WASHINGTON, D.C.

Dr. MARTIN. Thank you, Senator Pell. It is indeed a pleasure to be here again today to discuss with you our recommendations on reauthorization of the title IV student assistance programs.

I want to commend you, Senator Stafford and the other members of the subcommittee, for your long support and patience in this area. Senator, as we have reviewed the particular programs, we find that, at the current time, they are working, and they are working very well.

Let me just say at the beginning that last year, thanks to your leadership by introducing the College Opportunity Act which later became MISAA, we have had an opportunity now to see that particular legislation enacted.

Let me share with you that, in comparision of statistics from the Office of Education just last month, that we have already found this this year in the total number of applications that it has risen by over 400,000 over 1 year ago at the same period in time.

However, a more dramatic piece of information, I think, that that same record shows is that we have over 900,000 more eligible

students participating in the programs than we had 1 year ago. So indeed, that program is working.

Likewise, our institutions have shown us that loan volumes and utilization rates in both SEOG and the college work-study program are directing these dollars to the students to which they were intended.

For this reason, we have submitted to you a series of recommendations which I would like to ask to have submitted into the record, and you will find that in these recommendations that we have three primary goals.

Our first goal is to provide a reasonable and continuing financial base for the existing grant and self-help programs to just assure current and future students that their goal of obtaining a postsecondary education will not be thwarted due to insufficient financial

resources.

In that regard, we have made recommendations that, No. 1, would provide annual step increases in basic grants. No. 2, we would increase slightly the threshold levels of the campus-based programs and add a threshold level for the SSIG program.

No. 3, we would address the award amounts in the various programs. No. 4, we would increase the authorization levels, and No. 5, we would establish a maintenance of effort level for State grant support to insure that there is not a cutback here in allowing the Federal-institutional-State partnership to erode.

Our second goal would be to provide more flexibility in the grant and self-help programs to adequately address the unique needs and circumstances that surround individual students. We would do this through several measures but among these would include, first, to increase the years of eligibility for students from the current 4-year limit up to the time that they have completed their baccalaureate degree or 5 years whichever is the least.

Second, we would eliminate all of the academic references that are contained in the various programs that cause differentiations and combine these into a single student eligibility section and use the definition that you enacted in the 1976 amendments dealing with satisfactory progress as determined by the institution as the primary criteria.

We would also include more flexibility in transferring funds between the various programs, particularly in the college workstudy program where it is very difficult for institutions to know exactly by year's end on an hourly basis how they are going to come out.

And we have also suggested, as a fourth provision, that we would increase the loan limits in both the NDSL and guaranteed student loan programs, and we would also modify the asset protection level to provide more equity and to eliminate the problem that we currently find that we discussed at the family contribution schedules in regard to home equity. As you well know, with the inflation that is going on in regards to the current home equity, many of the students that we thought that we would assist that were in the middle-income families under MISAA are, in fact, today being denied because of the inflated paper money that is showing up under home equity. We feel an adjustment needs to be made in this reauthoriztion to alleviate that problem.

Our third goal would be to modify the administrative procedures which are burdensome and costly while still retaining the necessary safeguards to provide and insure program accountability and integrity.

We would do this first by eliminating the term "actual" in the cost of attendance. We would also eliminate the matching requirements on the SEOG which is really paperwork and is no longer necessary. We would eliminate the notarization requirement from the affidavit, retaining the affidavit but simply eliminating the requirement that students must go out and pay to have it notarized.

We would increase the administrative allowance, as has been pointed out earlier, to provide more support to the institutions to actually carry out the kind of mandates of validation and to eliminate fraud and abuse.

And last, but certainly not least, we would adopt reasonable language in the development of a single-need analysis in common form which will achieve the goals that we all want of simplification but at the same time maintaining the same kind of necessary discretion that institutions need to service the needs of students. And to that end, we have suggested some new language which you may well wish to consider in the event that you follow the direction that the House has gone in H.R. 5192.

At this point, Senator, I would like to conclude my remarks and just thank you for the opportunity of being here, and I would certainly offer our assistance as you go through the reauthorization, either to you or any other member of your subcommittee. [The prepared statement of Dr. Martin follows:]

TESTIMONY OF DALLAS MARTIN, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF STUDENT FINANCIAL AID ADMINISTRATORS

Mr. Chairman and Distinguished Members of the Subcommittee:

I am Dallas Martin, Executive Director of the National Association of Student Financial Aid Administrators, a non-profit association which represents over 1600 institutions of postsecondary education. It is indeed a pleasure to have the opportunity to appear before you today to discuss the Title IV student assistance programs and to present you with our thoughts on how these programs should be modified as you embark upon the difficult task of reauthorizing this important legislation.

During the past six months, our Association has carefully reviewed the existing legislation which governs these programs, and has compared this legislation with the actual operational and administrative practices which are involved at the campus, state, and regulatory levels. We have also reviewed actual cases in order to see how effectively individual students and parents are being served by the existing system. From this analysis, we have developed several legislative recommendations, which we sincerely hope will be incorporated into your final bill.

Most of our recommendations are designed to meet three specific

goals, which we believe are essential in order to insure that the programs

continue to serve the needs of our citizens.

The first goal is to provide a reasonable and continuing financial base for the existing grant and self-help programs to assure current and future students that their goals of obtaining a postsecondary education will not be thwarted due to insufficient financial resources.

To achieve this first goal, we recommend that all of the existing programs be extended through June 30, 1986. This will provide

program

stability and gives students an assurance that there will be a continuation