I must point out, however, that total funding for the homeless in the 1989 budget exceeds the funds that are available in 1988. The Administration is requesting funding for programs targeted to the homeless which are administered by HUD, HHS, the Veterans Administration, FEMA, and USDA. In addition, funds are being requested for the Interagency Council for the Homeless to coordinate and monitor all Federal programs serving the homeless.

INCREASED BUDGET FOR CHAPTER 1 LEA AND CONCENTRATION GRANTS

Mr. Natcher.

For Chapter 1 grants for disadvantaged children your budget shows $4.566 billion, an increase of $238 million over fiscal year 1988. Your statement refers to an improved targeting of Chapter 1 funds. What do you have in mind? Concentration grants?

Secretary Bennett. Of the $238 million increase requested for Grants to Local Educational Agencies, $76.6 million would provide additional funds for Basic Grants, which flow to school districts that have at least 10 eligible students. The reauthorization bills passed by the House and Senate would make a few minor changes in the Basic LEA Grant formula. The remaining $154 million of the increase would fund Concentration Grants, which are allocated to school districts with large numbers or percentages of children from lowincome families.

CONCENTRATION GRANTS ALLOCATION FORMULA

Mr. Natcher. Has your office developed a new formula for allocating Concentration Grants under Chapter 1?

Secretary Bennett. The Department has not proposed any changes in the current Concentration Grant formula itself. Rather, the Department, in its Chapter 1 reauthorization bill, proposed to allocate 5 percent of all Grants to LEAS funding through Concentration Grants and to improve the Basic Grant formula. This proposal was designed to shift Chapter 1 resources to areas with the greatest need without eliminating existing LEA Grant recipients.

Both the House- and Senate-passed Chapter 1 reauthorization do include new formulas for allocating Concentration Grants.

CONCENTRATION GRANTS ALLOCATION FORMULAS PROPOSED IN H.R.

5

Mr. Natcher. One of the past problems with Concentration Grants is that most of the funds go to the big cities; rural areas of the country don't seem to benefit much from Concentration Grants. Is there some way this program can recognize the needs of children from rural areas?

Secretary Bennett. In H.R. 5, the House modified the eligibility thresholds for Concentration Grants so that LEAS in counties with 6,500 poor children or in which poor children make up at least 15 percent of all children in the county would qualify. In addition, the House bill provides that counties qualifying through the percentage method would count all of their poor children for allocation purposes rather than just the number in excess of that threshold. This change in the formula would provide more Concentration Grant funds to rural counties than would be the case under the current formula. We understand that this formula, which we believe is very fair to rural areas, will be adopted in conference.

Mr. Natcher. The House and Senate reauthorization bills include different formulas for Concentration Grants. Which one is the Administration supporting?

Secretary Bennett. The Administration prefers the Senate approach to funding Concentration Grants under which the first $400 million of the Chapter 1 appropriation above $4.3 billion, and 10 percent of the total appropriation if it exceeds $4.7 billion, would be devoted to Concentration Grants. This approach would ensure that the proportion of overall Chapter 1 funding targeted to the neediest counties and LEAs would not decline if the program appropriation exceeds $4.7 billion. The House bill, by contrast, would limit the Concentration Grants program to $400 million regardless of the size of the Chapter 1 appropriation.

However, the Administration supports the House bill's provisions changing the county eligibility thresholds to 6,500 or 15 percent of poor children in the county, as well as the requirement that all Concentration Grant funds be allocated to States

subject to those threshold eligibility requirements. These provisions would assist in targeting funds on the basis of need. The Administration opposes the Senate provisions under which fully half of the funds available for Concentration Grants would be allocated to States under the Basic Grant formula. This approach would undercut the very purpose of the Concentration Grants program because it would allocate a significant amount of funds without regard to concentrations of poverty. Moreover, the Senate's within-State allocation procedures for this half of the available funds are unduly complex, and appear inequitable across districts. Finally, the Administration supports the House bill's provision allowing an SEA to reserve up to 2 percent of the State's Concentration Grants allocation for payments to qualifying LEAS in ineligible counties. This provision will enhance program equity by making it easier for States to serve pockets of poverty in relatively affluent counties.

STUDENT LOAN DEFAULT INITIATIVE

Mr. Natcher. There are a number of proposals currently under consideration aimed at defaults in the Guaranteed Student Loan program. Do you see any quick solution to the student loan default problem?

Secretary Bennett. Our institutional default prevention initiative provides an immediate incentive for schools to implement policies now that would prevent defaults from occurring or would reduce the Government's default costs. Institutions can accept more responsibility for assuring that a student is qualified for a postsecondary level education before allowing that student to receive aid. Institutions can provide better debt counseling to students both before a loan is disbursed and when the student leaves school. Institutions can also implement less punitive refund policies that would still provide sufficient payments to cover institutional costs.

In addition, we have proposed legislation that would require guarantee agencies and lenders to bear a share of the risk of default. Not only would this reduce the Government's default costs, but it would provide guarantee agencies and lenders with incentives to prevent defaults and improve collection efforts.

FEDERAL STUDENT AID

Mr. Natcher. Do you think that the Federal Government has gone too far in emphasizing loans rather than grants in helping students obtain a college education?

Secretary Bennett. Grant funds have increased dramatically over the past several years and continue to provide the first level of support for students whose parents do not have any financial capacity to contribute to their education. We believe that our budget request ensures that a reasonable share of available Federal student aid takes the form of grant aid. Our Pell Grant program request is for $5.011 billion, an increase of $751 million over the 1988 appropriation, and includes a proposal to increase the maximum Pell Grant award in 1989 to $2,300. We are requesting $416.6 million for the SEOG program, an increase of $8.2 million over the 1988 appropriation. These requests reflect our significant support for grant aid.

INDEPENDENT LIVING SERVICES FOR OLDER BLIND INDIVIDUALS

Mr. Roybal. According to the Department of Education's invitation for applications under Part C, Title VII of the Rehabilitation Act, $5.6 million will be available for approximately 28 State awards for FY 1988. What efforts are being undertaken by the Department to increase the number of State awards authorized under this program so that all older visually impaired individuals can be served at a minimal level?

Secretary Bennett. This program awarded 24 grants to State vocational rehabilitation agencies in fiscal year 1985, which was the first year that funds were available. In fiscal year 1987, we awarded 26 grants to State vocational rehabilitation agencies, and this year we intend to award 28 grants for a three-year period. Thus far, 37 State agencies have received grants. In future competitions, emphasis will be placed on serving currently unserved

areas.

Mr. Roybal. Would the Department support legislative efforts now or upon reauthorization of the Act to fund the program through formula grants, with sufficient funding to provide services to those who qualify?

Secretary Bennett. We believe that at this time it would be premature to support legislative efforts to change this program into a formula grant program. The program has only been in existence for two years, and we do not have any data on the effectiveness of the program that would support the need for changes in the program legislation. In the future, if assessments of the program indicate that formula funding is appropriate, we would consider combining this authority with that of Part A Comprehensive Services for Independent Living.

Mr. Roybal. Approximately 2.11 million Americans are partially sighted, and three-fourths of the legally blind have useful remaining sight. However, partially sighted individuals often are not able to get the assistance they need to learn to completely utilize the sight they have to live as fully and independently as possible. Proper low vision training is vital to the partially sighted individual, and should be included in any comprehensive program assisting the handicapped.

Last year both the House and Senate Appropriations Committees noted the need for these services, and requested that the Department of Education develop a plan for establishing a center for the partially sighted.

What progress has the Department made toward developing this plan?

Secretary Bennett. The Department has not made any plans to develop a center for the partially sighted. The National Institute on Disability and Rehabilitation Research (NIDRR) is a research institute and does not usually fund service delivery programs such as a resource center for the partially sighted. However, the NIDRR currently is funding several projects in low vision including two innovation grants, two Rehabilitation Engineering Centers, two Research and Training Centers, and five field-initiated projects.

Mr. Roybal. When will this plan be completed?

Secretary Bennett. The Department does not intend to develop a plan to establish a center for the partially sighted. The Department believes that the needs of the partially sighted are being adequately addressed through ongoing research and field-initiated projects.

PROPOSED EXPANSION OF ELIGIBILITY FOR MAGNET SCHOOLS ASSISTANCE

Mr. Roybal. Is the Department's proposal to expand the Magnet Schools program to currently ineligible school districts due to an assessment that the problems of segregated and inferior schools with high populations of minority students have been fully remedied?

Secretary Bennett. No. Our proposal to expand eligibility for the Magnet Schools Assistance program to currently ineligible school districts stems from the fact that the magnet schools approach has proven to be a successful school improvement technique. We recognize that many school districts not covered by desegregation plans also have determined that magnet schools can increase parental choice, improve educational quality, and provide a vehicle for bringing together students from a variety of backgrounds. Our proposal would make these additional districts eligible for grants to help them initiate magnet school programs.

Mr. Roybal. Does the Department believe that school districts not now covered have greater needs than those now eligible for Magnet Schools Assistance?

Secretary Bennett. No. We believe that the benefits of magnet schools educational improvement, enhanced parental choice, and a more diverse student population should be extended to other school districts as well. However, at least $75 million (65 percent of the appropriation) would be reserved for desegregating districts.

Mr. Roybal. Has the Office for Civil Rights provided data that would support your decision to cut back on a commitment to segregated schools?

Secretary Bennett. We have not decided to cut back on our commitment to provide assistance to desegregating schools. For 1989, we will request $115 million, $43.2 million more than the 1988 appropriation, for Magnet Schools Assistance. Of this amount, at least $75 million, $3.2 million more than the 1988 appropriation, would be awarded to currently eligible districts implementing desegregation plans.

Mr. Roybal. How successful has the program been in rectifying problems associated with segregation?

Secretary Bennett. This information is not currently available. We have not yet conducted an evaluation to determine the extent to which the Magnet Schools Assistance program has achieved its objectives, but plan to conduct such an evaluation within the next few years.

MAGNET SCHOOLS ASSISTANCE

Mr. Roybal. How many eligible school districts are there, and how many have taken advantage of the program?

Secretary Bennett.

Investigation of data sources maintained by the Office for Civil Rights and the Center for Education Statistics data bases, and the Department of Justice found no information on the universe of school districts eligible for Magnet Schools Assistance. We will continue to research this matter.