descriptions of the enormous obligations which higher education must fulfill in the next decade. Numerous studies by Federal agencies, State planning commissions, and independent groups are in general agreement that enrollment is in the process of doubling. There is also agreement that colleges and universities in the next 10 years must nearly double both the number of qualified faculty members and the salaries paid them. A recent comprehensive study by the U.S. Office of Education states that by 1965 the colleges and universities of this country will have to spend $9 billion on physical facilities, and that an additional $10 billion for this purpose will be needed between 1965 and 1970. The problem deepens when it is recalled that-and this is the reason for my interpolation-far from broadening the base for profitable operations as might be true of industry, the expansion of plant and enrollment typically means for the nonprofit institution a widening gulf between income and expense. This is true whether the institutions are public or private.

Several leading economists have estimated that between 1959 and 1970 general expenditures, excluding those for capital outlays, will mount from $3.7 billion to more than $9 billion a year.

To bridge this enormous operating gap without further recourse to Federal support will, I submit, tax all of the ingenuity that college and university administrative officers can muster. This is why, in responding to national requests to expand our facilities, we naturally look to government, and to the Federal Government, for major help in meeting new capital outlays.

Recognizing the seriousness of this situation, organizations in higher education have become increasingly aware of their responsibilities to assess the needs of colleges and universities and to offer specific proposals to the Congress. The American Council on Education began last fall a series of conferences, in which there was participation by representatives of the major organizations in higher education, for the purpose of achieving as nearly as possible a consensus as to what would constitute a sound, realistic proposal for Federal assistance. Out of these conferences we produced in January "A Proposed Program of Federal Action to Strengthen Higher Education."

One of the chief recommendations contained in that general statement was that the Federal Government should establish a two-pronged program for assistance in the construction of academic facilities-lowinterest loans and matching grants-with each eligible institution determining for itself which type of support would best meet its needs. We are gratified that S. 1241 provides low-interest loans for this purpose. These loans are needed, are one practical way of meeting the urgent demands for additional academic facilities, and would, I am confident, be used to the full extent of the authorization of $300 million a year for 5 years.

On one important count, however, we prefer the loan provisions of S. 555 since that bill would permit an institution to borrow the entire amount needed for a construction project. S. 1241 requires that 25 percent of the development cost shall be met from non-Federal sources. We are not convinced of the necessity for this limitation.

It has not been required in the college housing loan program which has financed more than $1 billion in dormitory and dining hall facilities, and in which there has been not a single default. In our judg

ment its retention will mean that some institutions will be delayed in meeting their urgent needs for academic facilities, and it may well mean that other institutions will be prevented from making use of the program at all. For example, we know some colleges that have planned to finance buildings, that is, meet the financial outlays involved, by the pledged annual support of industries and alumni groups. Under this plan, the requirement of one-fourth advance payment would set up a formidable hurdle.

Senator JAVITS. Mr. Chairman, would the witness yield for a moment? I want to apologize, President Case, I must be on the floor at 10:30 and I did want to, before I leave, not only with the indulgence of my colleague and very dear friend, I want to ask you the same question I have asked the others, and that is whether you, too, feel, and whether you think it is fairly representative of the institutions you represent that practicality requires that we act on an extension of the National Defense Education Act this year as Secretary Ribicoff apparently thinks we should?

Dr. CASE. I do, Senator. The act is in urgent need of revision and extension, and the American Council on Education is on record in strong support of that view.

Senator JAVITS. I thank you, Mr. Chairman.

Thank you, Mr. President.

Senator MORSE. I want to interject at this point to reinforce the statement you have just made in regard to these loans and concerning the proposal that 25 percent of the amount has to be raised by institutions. I cannot see the logic of it either for many reasons, but I want to mention two.

It seems to me the question which ought to put in regard to many proposed facilities is, first, is this facility needed, and second, is the loan a sound loan.

If it is, it should not make any difference, whether 100 percent of it is furnished by so-called Federal funds for that particular facility. Furthermore, we all know, as you have pointed out, it may very well mean a postponement of building the facility or never building it if an institution which is already strapped for funds has to try to raise additional funds to build it.

I would point out that one of the reasons, in such a case for the institution's not having built the facility, by getting 100 percent of the loan elsewhere, is that the commercial loan they would have to seek either is not available or would be at such a high interest cost, that the proposal is unreasonable.

What we are saying in many instances, it seems to me, in this part of the bill, is that we are going to give 75 percent of the loan on the basis that the schools can afford, but the institutions are going to have to go out to try to get the remaining 25 percent of the loan on a basis that the schools can ill afford. This just does not make sense to me. I understand the desirability of having participation by these colleges. But if we say they have to participate in connection with this loan program, we are overlooking, it seems to me, the tremendous job they are doing in all other fields of their educational activity in terms of participation

Dr. CASE. Right.

Senator MORSE. In obtaining participation from the legislatures, from the foundations, from the alumni, and from the philanthropists. It just does not make sense.

Dr. CASE. I quite agree, Senator. I do not think any of us could have made the point so effectively.

To resume, we favor S. 585 for an even more important reason, namely, that it also provides a program of matching grants. Any loan program, no matter how generous, will fall far short of meeting the needs of our institutions of higher learning. This point is going to be made by my colleague, Mr. Millett, in his testimony.

The fact is that many public institutions, for example, would be barred from the loan program by State laws, since their authority to borrow is limited to those projects which are income-producing, such as residence halls and dining halls. Some private and public institutions would be reluctant to participate because repayment of these loans must be drawn from general funds (primarily tuition) already overburdened with this rising costs of faculty salaries, equipment, and maintenance.

In testimony before another congressional committee 15 months ago, I stated a position which is still firmly held by the American Council on Education:

We endorse as the answer for many institutions a plan of loans patterned after the college housing loan program, but we must emphasize at the same time that the needs of many other institutions will require a program in which grants are the major factor. We believe that a combination of these two approaches or the availability of options-may be possible as well as desirable, and we urge that these possibilities be promptly and thoroughly explored.

That position has been endorsed by all the major educational organizations directly representing institutions, as well as by President Kennedy's Task Force on Education. It was suggested as long ago as 1957 by the nonpartisan President's Committee on Education Beyond the High School. Hence the proposal we make today--that while loans will be useful and greatly valued, they are only part of the needed solution-is not a superficial or hasty conclusion, but one which we have reached after the most careful study over a number of years. For example, last November, in an effort to determine the judgment of its membership and to be of all possible assistance to the 87th Congress, the American Council on Education sent out a questionnaire asking whether its member institutions and organizations would approve the "dual approach" to Federal assistance for academic facilities, providing optional loans or 50 percent matching grants. The percentage of institutions and organizations voting "Yes" was 89.5, which I think you will agree indicates a remarkable degree of unanimity might add, especially among educational institutions. It is of particular interest that there was no significant deviation in the proportion of public and private institutions favoring the proposal. The council also asked:

If this legislation should be enacted, what is your estimate of the amounts for which your institution might apply under either or both of the two programs of Federal assistance over a period of 5 years?

The 582 institutions replying to this question, representing less than one-third of the total colleges in this country but perhaps about onehalf of the total enrollment, said they would expect to request a total

of slightly more than $2,900 million in assistance under such a program. Of this amount, they reported, about $2,102 million or 72 percent would be for grants, and $800 million, or 28 percent would be

for loans.

It was on the basis of this survey that the American council in January recommended in "A Proposed Program of Federal Action To Strengthen Higher Education," previously cited, that the Federal Government should provide assistance at the average rate of $1 billion a year, approximately 70 percent of which would be in the form of matching grants, and 30 percent in loans.

Senator MORSE. President Case, before you get into the next point in your statement, I think maybe for purposes of emphasis, it would be helpful if we could have this colloquy with you in the record. I find myself very much disturbed in conversations with colleagues in the Congress who seem to think the loan program is all right, but a grant program ought to be kept to a minimum.

Isn't it true that those who emphasize loans and seek to minimize grants, overlook the fact that the loan program is bound to place the burden of paying for those facilities on a campus, from which there is no income, upon the backs of the students? Isn't it true that the college administrator, frankly, has no other course than to increase the laboratory fee, the dormitory fee, the cafeteria charges, and all the student charges in the very facilities which are vital to the student's physical existence on the campus? In many instances, because of this, isn't the student being asked to pay for these buildings?

Dr. CASE. Right.

Senator MORSE. That is going to discourage students from going to the colleges because it means increased tuition for college courses. We really defeat our own purpose. What we are seeking to do is to provide an educational opportunity for every boy and girl in this country who has the brains to absorb a college education.

We are defeating that purpose, and we are driving the students into. nonacademic pursuits.

Is my analysis exaggerated or sound?

Dr. CASE. No, sir; it is sound. This is a conviction deeply held by the American council, and is one that has been determining with respect to the program we propose, emphasizing the need for the inclusion of grants. I think it is an excellent analysis.

Senator MORSE. I would like to get your observation on one other point. It is very hard to get the American people to see this. I take the position that any grant money that we give to public educational institutions in this country, I do not care whether they are secondary, elementary, or higher education, is no act of generosity on the part of the American taxpayer to either the institution or the students who attend it. In fact, it is simply a contribution that the taxpayer makes to himself in seeking to stop the waste, the shocking, shameful waste of human resources. All of us, as taxpayers are guilty of this waste, and we are guilty of it because so many of us do not know the facts. We are making a contribution to ourselves through such grants because all we are doing by these grants is paying an insurance premium which will give us at least a fighting chance that this Republic will survive.

May I enlarge upon the subject with just a sentence or two more?

Dr. CASE. Yes.

Senator MORSE. All we are doing is making an installment payment now for a much greater return by way of dividends in terms of tax dollars in the future. As my two colleagues sitting here with me know, I have borne down pretty heavily on the point that the evidence is clear that if you take 50,000 students who are capable of doing college work, and send them to college, and then keep an economic case record on them the return is very worth while. You will find that the investment that you and I as taxpayers by way of grants to building public college facilities, so that students can go to colleges is bound to result in an economic return to us.

This return is much greater than the investment we make in those students because the earning power that results from a college degree will make it possible for them to pay tax dollars into the Federal Treasury during their lives so much greater in amount than what they would if we deny them a college education, that I just find myself at a loss to understand politicians who cannot see it.

Dr. CASE. Yes.

Senator MORSE. And with voters who elect that type of politician. Before you came into the room I was impolitic enough to point out that we have to face up to the fact. Including the educators, we all have a pob of citizen statemanship to do in this matter. We have to take this political issue to the American people. The facts are with us, and once we get it to the people, we are going to accomplish a great deed. Perhaps we need to send some politicians back into private life, or possibly back to college, so that they can understand these

facts.

I did not mean to draw you into a political discussion, but I do mean to draw you into a discussion of my allegation which I am satisfied the facts will support. Do you think I am wrong when I say that the investment in legislation such as this that we are asking the American taxpayer to make by way of grant money for public college facilities, is, after all, a sound investment in dollars and cents to this country? Do you agree that the investment will pay back over and over again its cost and, therefore, it is justified from an economic standpoint alone, to say nothing of those values, educational and the cultural, which we will reap by way of dividends from such a program?

Dr. CASE. Senator, that is one of the easiest questions to answer. It is one of the easiest questions I have been confronted with these 12 months. My answer is I do.

Senator MORSE. Thank you very much.

Senator CLARK. Would the chairman yield briefly?

Senator MORSE. I am through.

Senator CLARK. I would like to develop briefly, Dr. Case, what the chairman has said, and, perhaps, refine it a little bit because of the concern I have about the proper administrative provisions if we write a grant section into this bill, which I favor doing.

In your statement you say:

In suggesting we should eliminate any contribution by the institution toward a loan, for example, we know some colleges that are planning to finance buildings by the planned annual support of industries and alumni groups. Under this plan the requirement of one-fourth advance payment would set up a formidable hurdle.