Neither would the institution's relationship to the Office of Education be changed in any material way, except that it would be eligible for loans beyond the 10 percent it can receive under the existing section 207.

Accordingly, the new proposal would not involve banks or financial institutions in any way in student financial aid affairs.

The significant change which this section would make in title II of NDEA relates not to the student borrower, and not to the institution's student loan fund, but rather to the institutional loan notes held by the Commissioner of Education.

The Federal Government's share of Federal capital contributions is required under the existing law to be returned to the Federal Government upon liquidation of the fund or at the termination of the program. In that sense, these Federal capital contributions are equivalent to loans. The procedures established under the Participation Sales Act of 1966 are designed to meet the frequently voiced criticism that under the Federal Government's bookkeeping system, repayable, selfliquidating investments have in the past been counted as debt, whereas loan notes in the hands of a private corporation would count as loans receivable-that is, as assets.

Since these institutional loan notes held by the Commissioner of Education would be assets, just as loans receivable held by a business are assets on its books, loan notes would quite properly be assigned to banks or other financial institutions in the business of holding interestbearing investments. Of course, proceeds from the sale of such notes would constitute income which can then be available for more loans. In the same way that loans for academic facilities are pooled under the Participation Sales Act, loan notes which institutions of higher education give to the Commissioner of Education in return for funds for their student loan funds, would be pooled in large blocks, so that, in effect, private investors would be purchasing shares, called participation certificates. These tranasactions would be handled by the Federal National Mortgage Association acting as trustee or broker for the Commissioner of Education. It has been demonstrated in other Federal programs that this means of pooling loan notes is more attractive than selling individual loan notes to private investors.

Although some State and other public institutions of higher education have legal restrictions on their authority to borrow funds, many of these institutions will still be able to participate in this program because, if an institution cannot pledge its credit toward repayment of the note, the new proposal would specifically provide for making the loan repayable solely from particular assets or revenues, such as amounts received by the college as repayments of student loans. If a few public institutions still could not borrow, straight Federal capital contributions, instead of loans, would be made to meet their needs.

Public institutions have participated in various Federal loan programs. As previously discussed, section 207 of the NDEA now permits loans to institutions of higher education to help finance the institution's capital contributions to its student loan fund. State borrowing restrictions for this new proposal would be very similar to those encountered in the administration of section 207. Since this section became operational in 1959, 55 State or other public institutions in 28 States have borrowed money for student financial aid purposes.

PART E-AMENDMENTS TO THE NATIONAL DEFENSE FELLOWSHIP PROGRAM

Section 471. Extension of program

This section would amend sections 402 (a) and 403(a) of title IV of the National Defense Education Act of 1958 to extend the program for 5 years through the fiscal year ending June 30, 1973.

Section 472. Increasing maximum length of fellowship from 3 to 4 years in special circumstances and requiring institutional effort to encourage recipients to enter or continue teaching

Subsection (a) of this section would amend subsection (a) of section 402 of the act to permit the Commissioner to provide by regulation for the award of fellowships for as much as 4 years of study under special circumstances in which the purposes of the title would most effectively be served thereby.

The purpose of this is to promote flexibility in the face of special circumstances.

Subsection (b) of this section would give the Commissioner discretion to extend in accordance with subsection (a) the period of study under fellowships already awarded prior to the enactment of this act. Such extensions would be made without regard to the limitation on numbers of fellowships that may be awarded under section 402,

Subsection (c) of this section would amend section 403 (a) of the act to require that the institution making an application give satisfactory assurance that it will make reasonable continuing efforts to encourage fellowship recipients to teach or continue to teach in institutions of higher education. Subsection (d) of this section provides that this above amendment shall be effective with respect to fellowships awarded on or after June 30, 1967, or on or after the date of enactment of this act, whichever date is later.

Subsection (c) would clearly emphasize the intent of Congress, with respect to title IV, to encourage and expand the training of collegelevel teachers.

Section 473. Requiring stipends to be set in an amount consistent with those awarded for comparable fellowships

Subsection (a) of this section would amend section 404 (a) of the National Defense Education Act of 1958 to provide for the Commissioner to pay fellowship stipends in amounts that are determined by him to be consistent with those paid under comparable federally supported programs. (Under present law, the stipend is fixed by statute at $2,000, $2,300, and $2,400 for the first, second, and third year of study, respectively, plus $400 for each dependent).

This amendment would allow flexibility to insure a greater degree of uniformity in stipend awards among equivalent programs.

Subsection (b) of section 473 provides that in no event shall the payment of stipends for any year in connection with fellowships awarded prior to the amendment made by subsection (a) be less than the amounts that would have been paid for such year under the act were it not for such amendment.

PART F-ADVISORY COUNCIL ON STUDENT AID

Section 481. Establishment of Advisory Council on all financial aid to students; absorption of advisory councils on insured loans.

Subsection (a) of section 481 would amend title IV of the Higher Education Act of 1965 by adding a new part, part E. Subsection (a) of section 481 of the new part would establish in the Office of Education an Advisory Council on Financial Aid to Students. The Commissioner, who is to be the Chairman, is to appoint as members persons who shall include leading authorities in the field of education, persons representing State and private loan insurance programs, financial and credit institution and institutions of higher education and other institutions eligible to participate in student aid under the Higher Education Act of 1965, the National Vocational Student Loan Insurance Act of 1965, and the National Defense Education Act of 1958.

Subsection (b) provides that the Council shall advise the Commissioner on policy questions that arise in the administration of financial student assistance programs and on evaluation of the effectiveness of such programs.

Subsection (c) specifies amounts of per diem compensation and travel expense to be paid to members of the Council.

Subsection (d) would authorize the Commissioner to furnish to the Council such technical assistance, and to make available to it such secretarial, clerical, and other assistance and pertinent data as the Council may require.

Subsection (b) of section 481 of this bill would repeal section 433 of the Higher Education Act of 1965 and section 15 of the National Vocational Student Loan Insurance Act of 1965. Each of these actions provided for the establishment of an advisory council. These councils would in effect be absorbed by the broader Advisory Council on Financial Aid to Students. In keeping with the repealers, numbering of the sections of each act has been appropriately redesignated. The intent of section 481 is twofold. First, it would eliminate the needless duplication of effort and expense presently occurring because of the existence of several totally independent Advisory Councils. Second, it would make possible the promotion of a single, uniform, consistent policy in reference to student financial aid.

TITLE V-EDUCATION PROFESSIONS

DEVELOPMENT

(AMENDMENTS TO TITLE V OF HIGHER EDUCATION ACT OF 1965)

Statement of purpose

Section 501 of the bill states that the purpose of the title is to coordinate, broaden, and strengthen training programs for teachers and other educational personnel at all levels.

AMENDMENTS TO PART A (GENERAL PROVISIONS) OF TITLE V OF HIGHER EDUCATION ACT OF 1965

Section 502 of the bill would amend the heading of title V of the Higher Education Act of 1965 by substituting "Education Professions

Development" for the present heading of "Teacher Programs, would insert the following new sections in title V:

"1 and

A new section 501 would declare it to be the purpose of the Education Professions Development Act to improve the training of educational personnel by (1) developing information on educational personnel needs; (2) providing a broad range of training opportunities; (3) attracting a greater number of qualified persons into the teaching profession; (4) attracting persons who can stimulate creativity in the arts and other skills to undertake short-term or long-term assignments in education; and (5) helping to make educational personnel training programs more responsive to the needs of the schools and the colleges. The existing section 501, which provides for an Advisory Council on Quality Teacher Preparation, would be deleted and in its place a new section 502 would establish a National Advisory Council on Education Professions Development. The President would appoint members of the Council, including persons broadly representative of the fields of education, the arts, the sciences, and the humanities, and of the general public. A majority of the appointed members are to be persons engaged in teaching or in the education of teachers. The President would designate one of the appointed members as Chairman, and, in addition, the Commissioner of Education and one representative each from the National Science Foundation and the National Foundation on the Arts and the Humanities would be members of the Council.

The Council would advise the Secretary of Health, Education, and Welfare and the Commissioner with respect to policy matters and would review and evaluate this and other Federal programs for the training and development of educational personnel, making an annual report of its findings and recommendations.

A new section 503 would provide that the Commissioner shall appraise the Nation's existing and future educational personnel needs and the adequacy of the Nation's efforts to meet these needs, and shall publish an annual report detailing his views on the state of education professions and trends in the future complexion of education programs in the Nation and indicating the Commissioner's plans as to allocation of Federal assistance under this title in relation to the plans and programs of other Federal agencies. This would serve the purposes of (1) keeping Congress informed of the latest developments in this field and action undertaken by the Federal Government under title V of the Higher Education Act of 1965, and (2) giving the Commissioner occasional opportunities to obtain a review of the existing situation with reference to future necessary action.

A new section 504 would authorize the Commissioner to enter into arrangements (through grants or contracts) with State or local educational agencies, institutions of higher education, or other public and private agencies, to attract qualified persons to the field of education.

A new section 505 would direct the Commissioner to consult with the National Science Foundation and the National Foundation on the Arts and the Humanities in the development and review of grant and contract programs under this title, so as to pormote coordinated planning of programs to train educational personnel.

Sec. 505 of the bill provides that title V of the Higher Education Act of 1965 may be cited as the "Education Professions Development Act."

A new section 506 would provide that funds available to the Commissioner for grants or contracts under the Education Professions Development Act may be transferred to other Federal programs having the same purposes, and vice versa.

A new section 507 would authorize the Commissioner to employ experts and consultants to advise him with respect to the making of grants and contracts and the approving of programs under this title. (This would replace sec. 524(c) of title V of the act, which is limited to the teacher fellowship program.)

Extending Teacher Fellowship Program to Include Graduate Education for Preschool and Adult and Vocational Education Personnel

Section 503(a) of the bill would amend the heading of part C of title V of the Higher Education Act of 1965 by inserting after "fellowships for teachers" the words: "And related educational personnel".

Section 503(b) would make changes in section 521 of the Higher Education Act of 1965 to make clear that fellowships now available for graduate education for personnel in elementary and secondary education may also include personnel for programs in preschool and adult and vocational education (including postsecondary vocational education).

In addition, the list of careers in fields directly related to education specifically mentioned in the present law would be extended to include the fields of educational and instructional television and radio, and child development.

Section 503(c) of the bill would amend section 522 of the Higher Education Act of 1965 so as to extend the authorization to award fellowships beyond the fiscal year 1968 and remove the present limitations restricting fellowships to study for advanced degrees other than doctor of philosophy and to a period of not to exceed 24 months. Section 503 (d) makes conforming amendments in section 523 of the act.

Section 503 (e) would make technical deletions from section 524 of the act because substantially equivalent provisions are contained in amendments which will be made elsewhere in the act by sections 504 (program development grants) and section 502 (experts and consultants) of this bill.

Section 503 (f) of the bill would amend section 525(b) of the act to provide that the $2,500 cost-of-education allowance to the institution having a fellowship program would be paid unless in the judgment of the Commissioner a program development grant under the new section 531 (added by section 504 of this bill) adequately covers the cost of education.

Section 503(g) of the bill would amend section 528 of the act (which authorizes the appropriation of certain sums to carry out part C through fiscal year 1968) to authorize the appropriations of such sums as may be necessary to carry out part C through fiscal year

1973.

New Parts Added to Title V of Higher Education Act of 1965

Section 504 of the bill would further amend title V of the Higher Education Act of 1965 by adding the following new parts: