In order to increase default risk-sharing with lenders and guarantee agencies, the Department is seeking the following legislative amendments for PLUS/SLS and the regular loan program: o Reduced loan insurance: The lenders insurance level would be reduced о Reduced reinsurance: Similarly, in order to stimulate greater collection diligence by guarantee agencies, the Federal reinsurance of default claims by guarantee agencies would be reduced from 100/90/80 percent to 90/80/70 percent depending on default experience. The other proposed regular loan program improvements would also apply to the 1/ 1988 and 1989 estimates assume adoption of proposed legislative changes. Net Savings to this Activity Resulting from Proposed Policy TUESDAY, APRIL 12, 1988. HIGHER EDUCATION WITNESSES KENNETH D. WHITEHEAD, ACTING ASSISTANT SECRETARY FOR POSTSECONDARY EDUCATION SALLY H. CHRISTENSEN, DIRECTOR, BUDGET SERVICE, OFFICE OF PLANNING, BUDGET AND EVALUATION SALLY K. KIRKGASLER, DIRECTOR, POLICY DEVELOPMENT STAFF, OFFICE OF POSTSECONDARY EDUCATION JOHN S. HAINES, DIRECTOR, POSTSECONDARY ANALYSIS DIVISION, OFFICE OF PLANNING, BUDGET AND EVALUATION Mr. NATCHER. At this time, we take up the budget request for fiscal year 1989 for Higher Education. We have before the committee Mr. Kenneth D. Whitehead. You have with you there at the table several of your associates. Who do you have with you there? INTRODUCTIONS Mr. WHITEHEAD. Mr. Chairman, I have Sally K. Kirkgasler, Director, Office of Policy Development, Office of Postsecondary Education on my left. I have Sally H. Christensen, Director of Budget Service, Office of Planning, Budget and Evaluation. I have John S. Haines, Director of the Postsecondary Analysis Division, Office of Planning, Budget and Evaluation. Mr. NATCHER. Thank you, Mr. Whitehead. Now, we will be pleased to hear from you. OPENING REMARKS Mr. WHITEHEAD. Mr. Chairman, members of the committee, thank you for the opportunity to present the fiscal year 1989 budget request for the Higher Education account, which totals $450,200,000. This amount is $84,300,000 less than the amount appropriated for Higher Education in fiscal year 1988. I have a statement I wish to have entered into the record, and I would go on to the highlights before we cover any questions you may have. The emphasis of our request is on the Federal commitment to address the postsecondary education aspirations of poor and disadvantaged individuals. To meet this commitment, we propose to focus the Federal resources on programs that promote educational opportunities for these disadvantaged individuals. Specifically, we propose to target funds to those activities which assist historically black colleges and universities in their mission of serving disadvantaged and minority students and which provide support services or financial assistance for disadvantaged students. In addition, we propose significant funding to stimulate excellence and quality in postsecondary education, and to meet mandatory interest subsidy costs of construction loan commitments made in prior years. We also have a number of small programs which, in our view, are overly narrow in scope, and have already either demonstrated their effectiveness, or duplicate other programs. We have proposed that some of these programs be eliminated. TITLE III To summarize our major proposals we propose $137,000,000 for Title III of the Higher Education Act. We propose that this amount be focused on the historically black colleges and universities. Historically, these institutions have played a major role in the education of black Americans. It was one of the original intentions of Title III, as we understand it, to fund this particular category of schools, and therefore, we propose that these institutions receive $80,500,000 in the coming fiscal year of our total Title III request. That would represent a 10percent increase over the 1988 appropriation. We propose several changes to the authorizing statute to improve the Part B program, which is focused on the historically black colleges and universities. We would like to target the funds to those institutions which have the greatest need and expand the uses of the funds to include activities that will help them better become financially self-sufficient. Specifically, we propose to allocate funds more on the basis of the financial need of the institution by adding to the formula a measure of low education and general expenditures. We would also like to broaden the purposes for which the formula grant funds may be used to include activities which would improve management prac tices at those institutions. We also propose to fund noncompeting continuation grants under Part A of Title III, but we would propose by 1993 to phase out this part of the program. MINORITY SCIENCE IMPROVEMENT PROGRAM Closely related to the Title III program is the Minority Science Improvement Program. We are requesting a $5,400,000 appropriation under this program. This would represent a 2-percent increase. AID TO STUDENTS Under Aid to Students, those programs commonly referred to as the TRIO programs, we propose what amounts to level funding from this year's appropriation, namely $205,800,000. These funds would be divided among the currently funded activities, including the Student Support Services program, Upward Bound, Talent Search, Educational Opportunity Centers, and staff training pro grams. In addition to these TRIO programs which are the fundamental instrument for assistance to the disadvantaged for providing equity and access to higher education, we propose to support the Patricia Roberts Harris Graduate Fellowships, Minority Participation in Graduate Education, and Legal training for the disadvantaged programs. These three programs would be funded at a level of about $20,600,000, which would supplement the TRIO effort focusing also on graduate and professional study for low-income disadvantaged students. We also propose to support the Robert C. Byrd Honors Scholarship program, and the Jacob K. Javits Fellowship program. These are designed to provide excellence in higher education, and that is another aim of our proposal this year. A total of $14,400,000 would be requested for these two programs. FIPSE We would also propose to enhance the quality of higher education by funding the Fund for the Improvement of Postsecondary Education. Here we propose a total of $13,645,000, which would be a $2,000,000 increase over the fiscal year 1988 level, and this increase would be used to support demonstration projects to encourage cost containment. This would be consistent with the FIPSE mandate since FIPSE has from its beginning been concentrating on, among other things, cost-effectiveness in higher education. The international education programs provide for a number of different activities and improving the quality of foreign language and area studies at schools and colleges in the United States. We would propose level funding for these programs at $30,700,000. INTEREST SUBSIDY GRANTS In addition to all those programs, we propose to fund only one other program, Interest Subsidy Grants. Between 1970 and 1973, the Federal Government entered into agreements with institutions of higher education to help them construct academic facilities. These agreements obligate the Department to pay the difference between 3 percent and the commercial lending rates, and therefore we make a request of $22,700,000 which would cover this obligation to the Federal Government. OTHER HIGHER EDUCATION PROGRAMS With respect to the other higher education programs authorized in the Higher Education Act, we would propose a number of these programs for no funding. We think they should be phased out. We believe that some of these programs which began as pilot programs have either proved their worth, duplicate other programs, or in general do not represent a cost-effective use of Federal money in these times of budget stringencies. Among these programs that we would propose for zero funding is the Veterans' Education Outreach program. This program was designed back in the Vietnam War era. We think the number of veterans now going onto the campuses can easily be handled under normal campus counseling programs. Similarly, with regard to the fellowship and scholarship programs, we are proposing that the Patricia Roberts Harris Public Service Fellowships not be funded. The Paul Douglas Teacher |