Additional data gathered by the Office of Education for its study, "Higher Education Planning and Management Data, 1958-59," indicate changes in the proportion of funds obtained from various sources for the construction of buildings between the period 1951-55 and the academic year 1958-59. Table 1 indicates the trend toward reliance upon the college housing loan program for capital funds for the construction of residential and auxiliary facilities and a trend toward miscellaneous sources and direct tax levies for instructional, research, and general building funds. Of particular significance in table 1 is the percentage decrease, from the period 1951-55 to 1958-59, in the use of current funds for construction purposes.

EXPENDITURES AND SOURCES OF FUNDS FOR THE FUTURE

To meet the projected physical plant expansion needs described on pages 38-39 will require greatly increased effort on the part of the American people. If only the present rate of expenditure were maintained throughout the decade, a deficiency of great proportions would develop. As shown in table 1, however, there is encouraging evidence that certain sources of support are growing, and there is ample reason to believe that they will continue to grow. The doubling of gifts and grants for capital facilities, for example, is an evidence of increasing support from the private sector of the Nation's economy, a form of support that can be expected to grow further. An effort has been made to project the future growth of support from existing sources, in order to measure better the actual extent of the facilities gap that may confront the Nation in 1965 and in 1970.

In table 2 are shown anticipated funds to finance capital facilities expansions to 1970, estimated on the basis of financing patterns followed from 1951 to 1959. The principal sources identified are State and local appropriations, gifts, and different types of borrowing. In making this projection, it has been assumed that sources that had declined in recent years would provide as much in the succeeding years as in 1959, that those increasing by an average of 10 percent or less per year from 1951 to 1959 would continue the same rate of increase, and that those that had increased at a greater rate than 10 percent would continue to increase 10 percent per year. This may be an optimistic viewpoint since it appears that investments in capital facilities have declined during the past year.

TABLE 2.-Projection of sources and amounts of funds for plant expansion,

In this projection it was assumed that the college housing loan program, which has accounted for one-fourth of total expenditures for higher education construction during the past few years, will be extended at the rate of $250 million annually. The Congress has endorsed the principle of Federal assistance for both residential and academic facilities. Differences of opinion regarding the extent and method of Federal assistance have temporarily deferred action other than extension of the college housing loan program, but it seems likely at the time of this writing that additional Federal programs will be enacted. Direct Federal loans, direct grants for assistance in the retirement of debt, and matching grants are the three principal methods of Federal assistance that have been proposed.

In addition to general construction assistance there are several other established forms of Federal assistance in the construction of academic and/or related facilities. These include: (1) Matching funds for the construction of hospitals connected with colleges and universities under the Hospital Survey and Construction Act of 1946 (Hill-Burton program); (2) disposal of surplus properties both real and personal-to public and private institutions on a nominal cash and/or donation basis; (3) grants-in-aid to public and private institutions for science research facilities, administered through the National Science Foundation; and (4) grants-in-aid to public and nonprofit institutions for constructing and equipping facilities for research in the sciences related to health (Health Research Facilities Act of 1956).

10

The cost of facilities needed in the 6 years, 1960-65, based upon assumptions previously discussed, will be $9 billion. Institutions may be expected to pro-, vide $6.1 billion of this need. Assuming that the requirements to 1965 have been met, the cost of facilities needed in the 5-year period, 1966-70, will be $9.8 billion. Institutions may be expected to provide $7.6 billion of this need. Thus, deficits of $1.5 billion by 1965 and $2.5 billion by 1970 appear to be in prospect, as shown in chart 2. Without the $250 million a year projected for the college housing program, the gaps would be approximately doubled, reaching $2.9 billion by 1965 and $5.2 billion by 1970 (see chart 2).

The Nation faces the challenge of providing its youth with the training required to meet the ever-increasing responsibilities of a highly complex world. In order to meet this challenge, it will be necessary to take constructive action in all areas in which deficiencies exist, or in which gaps between needs and anticipated resources are in prospect. In this paper, careful effort has been made to estimate what will be required over a period of 10 years to overcome present and prospective deficiencies in the area of physical facilities in institutions of higher learning. The manner in which this deficit is to be overcome is a problem to be decided by the American people.

Secretary RIBICOFF. Title I of the bill provides for loans to institutions of higher education in order to finance up to three-fourths of the cost of construction, acquisition, or repair of any needed academic facility. The total amount authorized to be available for such loans is $1.5 billion, to be made available over a 5-year period at a rate of $300 million per year.

Loans would be at a rate identical with that of the college housing loan program (3.375 percent). Loans could have a maturity of up to 50 years, but practice is more likely to follow that of college housing loans, where the average maturity is under 40 years.

The program would be administered by the Commissioner of Education, on an application and approval basis. No provision is made for State allotment of funds, but a limit of 122 percent is placed on the amount of total loans authorized that may be made to institutions in any State.

All accredited public and nonprofit private institutions of higher education would be eligible, so long as they offer work toward the bachelor's degree. Excluded from eligibility would be facilities that

10 In the last 3 years, real property transfers to higher education institutions have had an acquisition cost value of slightly more than $10 million.

are intended primarily for events for which admission is to be charged to the general public.

The President also recommended amendments to extend the college housing loan program. These amendments, extending the program for 4 years at a rate not to exceed $300 million a year, have been enacted as part of the housing law.

These construction loan programs, if fully utilized, would provide the Nation's colleges and universities with funds for physical plant expansion and improvement totaling $2.75 billion over the 5-year period. In our opinion, these funds, when combined with other Federal construction expenditures-such as the proposed medical teaching facilities grant program-would make an important contribution toward closing the projected financial gap to which I referred a minute ago. They would account for about $1 out of every $3 needed to meet projected construction costs. They would thus be a substantial addition to higher education sources of financing, without preempting the role of other traditional sources.

Our projections of need are based upon the assumption of continuing growth of construction aid from traditional sources, including State appropriations, gifts, and grants from alumni, friends, and industry. Even assuming this growth, however, one-third of the Nation's higher education construction needs would go unmet if the Congress did not enact the President's recommendations into law. The figures speak for themselves. Without the proposed aid, our educational system would be crippled by a deficiency of one-third of needed construction.

SCHOLARSHIPS FOB UNDERGRADUATES

No less urgent and no less compelling in its significance for the Nation's future strength is the need for encouragement and assistance to students of ability who are economically unable to go to college. Various studies suggest that there are annually about 150,000 youths of outstanding ability who fail to continue their education, and that from 60,000 to 100,000 of these would enter college if they could be assisted in surmounting the economic hurdle of higher education costs. This group of superior high school graduates, whose families lack adequate financial resources, constitutes an untapped reservoir of potential leadership we must draw upon if we are to meet our obligations for world leadership and our hopes for economic growth.

Consider for a moment another important set of facts. College and university tuition fees during the past decade have increased approximately 86 percent. The average annual current expenditure of a student attending college and living away from home increased between 1953 and the academic year 1960-61 from approximately $1,200 to $1,650 per student. When this cost is considered in relation to the fact that, in 1959, the median income of heads of families 35 to 54 years of age was $6,140, it is easy to understand why many families with modest incomes find it difficult to send their sons and daughters to college.

The financial burden of a college education is a significant deterrent to the realization of an American ideal-equality of opportunity

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