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EXHIBIT 3

Excess of payments over amounts due and excess of accelerated payments over past due payments, national defense student loan program

Percent past due, by Federal region, of total amounts due, collected and uncollected, under the national defense student loan program

Federal region and States in region

Oct. 31,
1964

June 30,

1965

I. Maine, Vermont, New Hampshire, Rhode Island, Massachusetts, and Connecticut...

II. New York, Pennsylvania, New Jersey, and Delaware.

16.0

14.3

III. Maryland, Virginia, West Virginia, Kentucky, District of Columbia, Puerto
Rico, and North Carolina..

IV. Tennessee, Mississippi, Alabama, Georgia, South Carolina, and Florida.
V. Wisconsin, Michigan, Illinois, Indiana, and Ohio.

VI. North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, and
Missouri..

VII. New Mexico, Oklahoma, Arkansas, Texas, and Louisiana_
VIII. Montana, Idaho, Wyoming, Utah, and Colorado.

IX. Washington, Oregon, California, Nevada, Arizona, Alaska, and Hawaii.

Senator JAVITS. What is the order of magnitude of the improvement in the NDEA loan program?

Mr. MUIRHEAD. If I may turn to this table now.

Senator JAVITS. I am rather proud of those amendments to NDEA enacted last year. I am glad to hear that they work.

Mr. MUIRHEAD. The order of magnitude of the improvement, I think, can be answered this way: The number of student loan accounts has increased from 640,000 to 834,000, and of those accounts the number that are now in collection status are comparably 274,000 for 196364 and 370,000 for 1964-65.

The total amount of money that is in collection status amounted to about $191 million for 1963-64 and increased to about $294 million for 1964-65. At the end of that year payments past due amounted to $4,400,000.

Senator JAVITS. How does that compare with the previous years? Mr. MUIRHEAD. In 1963-64 payments past due amounted to 1.6 percent of the value of accounts in collection status. The comparable figure for 1964-65 was 1.5 percent.

Senator JAVITS. It has now decreased to 1.5 percent?

Mr. MUIRHEAD. Yes; this is our estimate. I think the point that I would like to stress here is that even though the program is growing larger, and there are more accounts, the value of payments past due in fiscal year 1965 was no higher a proportion of loans outstanding than it was in the previous fiscal year. We believe the trend toward increases in the delinquency rate has been halted, and that sustained attention to this problem will bring reductions in this trend.

Senator JAVITS. I would say to you that I think that the delinquency rate should be nil nationally, but that cannot be managed. I think the fact that there is a change in the trend is very helpful. I think that it is a great tribute to the students of the country that the rate of delinquency is that low. Thank you.

Senator MORSE. Thank you very much, Senator.

You will stand ready to supply to the subcommittee such memorandum as may be requested.

I am delighted now, Mr. Commissioner, to call upon you to present your testimony.

You may proceed in your own way.

STATEMENT OF HON. HAROLD HOWE II, COMMISSIONER OF EDUCATION; ACCOMPANIED BY DR. SAMUEL HALPERIN, DEPUTY ASSISTANT SECRETARY OF HEALTH, EDUCATION, AND WELFARE FOR LEGISLATION; MR. PETER P. MUIRHEAD, ASSOCIATE COMMISSIONER OF EDUCATION FOR HIGHER EDUCATION; AND DR. ALBERT L. ALFORD, ACTING ASSISTANT COMMISSIONER OF EDUCATION FOR LEGISLATION, U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Mr. Howe. Thank you, Mr. Chairman. In line with your view just expressed, and also because we have been in communication with some of the committee staff, we would like not to present the full written testimony that we have but to submit a portion of it for the record, and if we may we would like specifically to present the first 14 pages of our

testimony for the record. We believe that adequately presents both the need for the programs suggested there and explains the nature of those programs. In brief, they are the Higher Education Facilities Act of 1963, for which we are asking a 5-year extension, and title III of the Higher Education Act, but, if I may, sir, I would like to present in detail the testimony which relates to the national defense student loan program.

Senator MORSE. The procedure you have outlined is certainly satisfactory.

We will put in the record at this point, the entire statement of the Department, so that there will be continuity in the record; then, the Commissioner can present his prepared comments.

Senator Yarborough has come in.

Before you came in, Senator Yarborough, I announced that the hearings will not last beyond 3 days; to meet all committee requirements, I have instructed counsel to see to it that the witnesses are limited in their oral testimony on the basis of the time that they and counsel have worked out, so that they will make their statements in that period of time and no longer, and then they will file supplemental statements to support their oral testimony. We will call witnesses back during executive sessions, if we decide that we need further discussion from them, particularly, the administration witnesses.

I want to say to the witnesses this morning that Senator Yarborough is the chairman of the Subcommittee on Labor. He will have to leave about 10 o'clock for a session of that subcommittee. I shall have to suspend these hearings soon thereafter when I am advised that one more person is needed to make a quorum.

I will go down to that hearing then.

The two subcommittees have almost identical membership and we sometimes have difficulty in getting a quorum for the markup. I hope that counsel can find some member of the full committee who is not on the subcommittee to preside, so that we can finish these hearings this morning. If counsel cannot, the witnesses will have to file the rest of their statements this morning.

Senator YARBOROUGH. I desire to commend the chairman for his diligence on all of these educational problems and these special educational measures. Except for this commitment in the executive session, I will give priority to this subcommittee, although I have six meetings today, but, as I say, except for the executive session, I will give priority to the Education Subcommittee. I commend the chairman on his diligence and his efficiency in pushing these hearings through. I hope that they be long enough and yet short enough to save the National Defense Education Act from the Bureau of the Budget's effort to destroy it.

Senator MORSE. We have the votes to do that. That is the answer to the Bureau of the Budget-just the votes. I am not interested in their reaction.

Their position is obviously fallacious. I will not waste any time on it but just vote.

Senator YARBOROUGH. I desire to associate myself with the statement of the chairman, Senator Morse.

Senator MORSE. I want to say to the gentleman from Texas that his complete cooperation has made it possible for us to expedite the edu

cational bills. Counsel will go to work and see if he can get somebody to take my place after 10 o'clock.

You may proceed in your own way, Mr. Howe.

Mr. Howe. One further observation, Mr. Chairman, with the testimony that we are submitting for the record, there are four exhibits which we would like also to accompany this testimony in the record. Senator MORSE. They will be inserted in the record.

(The prepared statement of Mr. Howe and accompanying exhibits read in full as follows:)

PREPARED STATEMENT OF HON. HAROLD HOWE II, COMMISSIONER OF EDUCATION, U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Mr. Chairman and members of the Subcommittee on Education, I am happy to have this opportunity to meet with the distinguished Subcommittee which has played such a prominent role in expanding educational opportunities for the college students of our Nation. Major changes in the National Defense Education Act of 1958, the Higher Education Facilities Act of 1963, and the Higher Education Act of 1965-all these products of this Committee have had a substantial impact on the course and quality of American higher education. All reflect this Subcommittee's recognition that, if the goals of our Nation's higher educational system are to be met, every college must be developed to its full potential.

The increased complexity of modern-day life, a thirst for knowledge on the part of young people, and a growing demand on the part of all employers for college graduates have had a profound effect upon our higher education system. College enrollments have doubled in the past decade; there are today nearly 6 million students in our Nation's colleges and universities. By 1975 enrollments are expected to reach 8.6 million. Freshman enrollments for 1965 were 18 percent above those of the previous year.

Our society is trying to rise to the challenge presented by burgeoning enrollments. The number of colleges has tripled since the end of World War IIfrom 866 to 2,200 in 1966. There is every indication that this spectacular growth will continue.

Such rapid growth has not been limited to undergraduate enrollments and institutions. Students with bachelor's degrees are entering graduate school in ever-increasing numbers. Increasingly, colleges, vocational and technical schools, business, and industry are requiring their professional employees to have some postgraduate education. Ten years ago, there were about 240,000 students enrolled in graduate school; last September, there were 570,000. By 1971, it is expected that there will be almost 1.1 million students in graduate schools across the country.

Although increasing numbers of students are seeking undergraduate and graduate educations, rising costs of such education are making it increasingly difficult. Costs to the undergraduate student in public institutions averaged $850 in 1940: last year that cost had almost doubled-$1,560. By 1980, the cost of an undergraduate education in a public institution will be even higher-an estimated $2,400. In private institutions, the costs have risen from $1,100 in 1940 to $2,370 in 1965; by 1980, it is estimated that the average annual cost will be $3,640.

Programs created by this Committee recognize the importance of a national investment in higher education. Financial assistance offered to college students furnishes a good example of this investment in educated manpower. Until 1964. as you know, the National Defense Education Act of 1958 was the only major Federal program for the support of undergraduate students needing financial assistance. Since then, you have authorized the College Work-Study Program, for which the 1967 budget provides $134 million. You have established the Opportunity Grant Program for able but exceptionally needy students; the budget figure for 1967 is $120 million. You have also provided a loan guarantee program with Federal interest subsidies for students at almost all income levels.

These programs will be larger in FY 1967 than ever before. We expect well over 1 million students to borrow money under the NDEA Loan Program and the Subsidized Guarantee Loan Program; 210,000 to hold work-study grants; and 220,000 to receive opportunity grants.