If outright grants of Federal funds are to be made, we urge that they be made to individual students rather than to individual institutions. Such a program has the advantage of letting the individual choose his own institution, thus stimulating healthy competition among a wide variety of separately controlled institutions. If grants of Federal funds are to be made generally to institutions of higher learning, we urge that the allocation of such grants be removed as much as possible from political influence by the interposition of some intermediate body similar to the National Science Foundation Board. We recognize fully the burden of our own responsibility to this whole situation which our position as trustees of Beloit College imposes upon us. In evidence thereof we enthusiastically reaffirm our commitment to the principle of "public enrichment through private endowment." And we pledge our full support to the continued strengthening of Beloit College in particular and higher education in general. Senator WAYNE MORSE, Chairman, Subcommittee on Education, WASHINGTON, D.C., June 26, 1961. Senate Committee on Labor and Public Welfare, The American Association of University Women in convention assembled, has restated its support of Federal sharing of responsibility for education. The association expresses its support of the extension of titles of the National Defense Education Act and of legislation pending in Congress which will assist the Nation's public schools and institutions of higher learning. Dr. ANNA L. ROSE, President, American Association of University Women. Hon. WAYNE D. MORSE, EVANSTON, ILL., June 19, 1961. Chairman, Subcommittee on Education, DEAR MR. MORSE: We wish to acquaint you with the action taken by the delegates of the National School Boards Association at their annual convention and business meeting in Philadelphia, Pa., May 4 to 6, 1961, with regard to matters pertaining to Federal aid to education. The NSBA represents the 150,000 school board members who are the legal trustees of our public schools. The association is dedicated to the advancement of the aducational welfare of the youth of our Nation. The delegate assembly called on the NSBA board of directors to conduct a nationwide survey to determine school board attitude toward the desirability and need of Federal aid for education and, secondly, it went on record as opposed to the further extension of Federal aid until the need for such aid is expressed by the school boards of the country. We are, as rapidly as possible, proceeding to determine the will of the school boards of the country regarding the need and desirability for Federal aid to education. In the meantime, we are not prepared to appear before a body of Congress to elaborate on this position. On March 10, 1961, we sent to you a telegram stating the association's position with regard to the matter of separation of church and state. Our policy No. 14 reads: "PUBLIC AND PRIVATE SCHOOL RELATIONSHIPS "The National School Boards Association supports the American tradition of the separation of church and state, and urges that it shall be vigorously safeguarded. To this end the association advocates that funds raised by general taxation for educational purposes shall be administered by public officials and shall not be used to support any privately operated schools. The association recognizes and upholds the right of any group to establish and maintain schools financed by its own supporters with such governmental supervision as will assure a minimum standard of instruction and adherence to the Constitution and laws of the United States." Respectfully, THEODORE C. SARGENT, President. Hon. WAYNE MORSE, U.S. Senate, Washington, D.C. YALE UNIVERSITY, DEPARTMENT OF ECONOMICS, New Haven, Conn., June 15, 1961. DEAR SENATOR MORSE: I would like to call your attention to a proposal by Yale's provost-designate which appears in the latest issue of the Yale Alumni Magazine (photo copy enclosed). The basic proposal provides that a student, on evidence of admission to an appropriate educational institution, would be allowed to "borrow" a limited amount from the Federal Government, the terms of repayment being stated as a percentage of the individual's Federal income tax liability. I find this proposal very attractive both because it avoids many of the evils which have been alleged against Federal aid, and because it has a great many advantages which are not shared by other schemes. Although Mr. Brewster's article does not specify any limits on the applicability of such a program, I have learned from him that he was primarily interested in graduate education. I would agree that the need is greatest there but would also add that such a plan seems suitable for professional education as well. My only experience with current practice comes from graduate education in economics. This experience, both as a graduate student and now as a teacher, has convinced me that there is a need for a drastic change in the means of financing. The device of fellowships awarded by individual schools, given a need to compete for the best available candidates, has led to virtually complete disregard for the criterion of "need" in making awards. This means that the brightest (or apparently brightest) candidates receive most of the money and that a given amount of funds does less to promote education than it could if “properly" allocated. I feel quite strongly that our bright young people already have a head start and to add to that a substantial "prize for being born smart" is grossly inequitable. It is my judgment that the tangible and intangible rewards which accrue to the individual who undertakes graduate education are sufficient to impel him to pay for it if it were possible to obtain long-term financing. On the other hand, private lenders have not, and almost certainly never will, provide loan funds on sufficiently long term. I recognize many important benefits of graduate education which accrue to society as a whole and which would certainly justify a net subsidy to such education if this is needed. It is very hard to estimate how much if any subsidy would be required under a plan such as Mr. Brewster's. At least that plan would allow for a some variations of the repayment percentage if more or less subsidization were required. Certainly there is some sort of subsidization involved in entering into a transaction that private lenders will not enter voluntarily. I would argue that per dollar of subsidization this plan would be much more effective than straight fellowships. The reason is that it contains a dis-incentive for persons who because of personal or family wealth or because of assured high future income, do not really need assistance. For such persons the "cost" of a "loan" would be quite high. In order to reduce some of the ridiculous financial competition among schools for the best applicants, I would favor a stipulation that students who attend institutions that provide fellowships in excess of tuition shall be ineligible for Federal loans. This would promote competition on the basis of educational quality instead of financial bribes. This scheme has other advantages which are obviously as well as some disadvantages; on balance I think it is worth very serious consideration. I hope you will see fit to examine it more closely. Respectfully, HAROLD W. WATTS, Assistant Professor of Economics. P.S.-I am addressing this to you both because I am a transplated Oregonian and because of your position on the education subcommittee. ARTICLE FROM YALE ALUMNI MAGAZINE BY MR. BREWSTER H. W. The outstanding characteristic of American higher education is its variety, spontaneity, and capacity for innovation which that variety permits. This variety, of course, springs from the various ways in which universities and colleges are financed in this country: by private donations from individuals, from corporations, from foundations; by the payment of fees and tuitions by students or their parents; by the appropriation of State legislatures in their various ways, within which there is a great deal of variety because of the pluralism of our Federal system; and finally, of course, by the role of the Federal Government in the financing of education of all types. I would like to assume, for purposes of getting on with the proper aspects of the problem, the need for some form of subsidy—let's call it just that—subsidy. Those asking for financial assistance always claim that what they are asking for is not a subsidy. Well, why not call it a subsidy? It seems to me that there is a demonstrable need for some kind of governmental financial assistance to higher education. At the moment it primarily takes the form of special financial assistance to achieve rather precisely defined objectives. It is essentially devoted to the creation of trained manpower for particular national objectives, most notably in the sciences and the languages. But I submit that in view of the growing demand resulting from the increase in our educable population, there is also a need beyond the present financial capacity of the States, or of our private institutions, to broaden, and in broadening, to equalize educational opportunity. The magnitude of that need, or the necessity for its assumption by the Federal Government, is open to debate. But by bypassing that question, I do not mean to say that I have a very clear idea of that magnitude or a firm conviction as to how far the Federal Government should go in terms of dollars. I would say, however, that I think we should avoid being misled by recent experience as we face the quite different problems of the future. The techniques we have worked out in order to achieve certain manpower training objectives will not necessarily be the proper techniques for the broader job of adding to the financial resources for higher education generally in order to broaden and equalize educational opportunites. But surely anyone who has tried to raise money, or who has tried to raise tuitions, or who has tried to increase the outlays from State tax systems for education, would accept the fact that there is need for some form of Federal assistance. Assuming that need, it seems to me important to be quite aware of the inherent dangers of dependence upon Federal Government support. I say inherent dangers, because I don't think this is a question of the problem of good government being merely the government of good people. These are dangers inherent in the relationship of government as subsidizers. First of all, there is what might be called a Parkinsonian overhead: the simple fact that if private activity becomes increasingly dependent upon some centralized source of financial assistance there is inevitably a tremendous increase in the overhead and the paper-pushing and the bureaucracy necessary in order to do the job. Secondly, and more obviously perhaps, there is always the danger when the Government replaces the market place of a misallocation of resources. This is not so much the problem of bad administrators against good administrators or that Government administrators are less worthy than private educational administrators. But there is the danger when a politically responsive agency is made central and essential to the conduct of private affairs that favoritism will at least have an opportunity for exercise. Then, too, there is the danger that political pressure will lead to a political evenhandedness which makes it impossible to reward excellence. And finally, there is the simple question of fallibility in the making of decisions as to who shall be subsidized and to what extent. A PARADE OF HORRORS Now these inherent dangers of any centralized subsidy program-favoritism, fairer shares, and fallibility-are especially distasteful in the area of higher education. If I may overdraw and exaggerate their corrupting impact, I would say that we must beware of the risk of having administrators, college presidents, deans, and educators trying to outguess and please Government agencies rather than going about the business of deciding for themselves how they think the educational exercise should be performed. Those who are dependent on centralized sources of finance through the government necessarily begin to put a premium on having as department heads men who are more effective as paperpushers and promoters than they are as scholars. And even the students are likely to become more concerned with the auction block, and the price of a fellowship, than they are with selecting their institution of learning because of its educational potential. This parade of horrors is simply intended to indicate that I think there are inherent dangers in going about meeting what I have assumed is a need. That is the need for vastly increasing the resources avail able to higher education of all types, if opportunity is to be equalized and if educational facilities and their development are to keep pace with the demand. I would say that there are four primary objectives that we ought to have in mind in trying to work out a system which would allow us to increase the amount of resources available and still avoid the inherent dangers I have mentioned. The four primary objectives which occur to me are, first, to minimize the financial barriers to access to higher learning without encouraging people to demand an education just because their maintenance is paid for; second, to attempt to maintain the competitive balance between various types of institutions, especially the relative competitive balance between the public and private universities, leaving students free to choose on the basis of their own estimate of relative excellence; third, insofar as possible, to make it unnecessary for the Government to deal directly with either the student or the educational institution; and fourth, insofar as possible, to make the undertaking self-liquidating over the life span of a generation. Now these make a tall order for legal or political ingenuity and I certainly would be the last to suggest that I have the answer. And even if we were to devise a technique which came somewhere near avoiding the pitfalls and meeting the objectives, there would still be much else that the Federal Government would have to continue to do in the area where national needs require the training of manpower for particular purposes. At the moment, however, we are not concerned with the targets involved in the work of the National Science Foundation or the National Institutes of Health or the National Defense Education Act. Our present concern is how to supplement that target-oriented assistance with additional assistance to increase the base of higher education generally. A MODEST PROPOSAL Here, then, is a proposal for public discussion. Let us say that any student enrolled in an eligible institution of higher learning could obtain an advance sufficient to cover all of his expenses except tuition-in other words, his maintenance expenses. Obviously some ceiling would have to be set-perhaps $2,500 a year. He could obtain that advance up to the ceiling of $2,500 a year from any savings and lending institution, including insurance companies, which wanted to participate in the program. And let us further say that the student would be under no obligation to repay the savings bank or insurance company making the advance. Rather, for every dollar thus advanced to a student, the savings and lending institution would, on the presentation of proper documents, receive a U.S. Government negotiable note of a yield and maturity no more favorable than that borne by Government bonds of current issue. Thus the savings and lending institution making the advance would not look either to the educational institution or to the student for repayment or reimbursement but instead would be reimbursed by the U.S. Government in the form of a dollar obligation. In turn, for every dollar received, the student would undertake a legal obligation to pay an annual charge for the remainder of his life, computed as a percentage of his Federal income tax and assessed along with his annual income tax returns. Such a scheme, however strange, is not necessarily radical. Let me briefly suggest the reasons for some of the elements in this proposal. The reason for having the advance in the form of a dollar sum which could be used by the students as he sees fit (but which would be pegged to be no greater than his expected annual maintenance costs) is that it is probably impossible to draw up a loan or grants scheme which would subsidize the payment of tuition without driving a very harmful wedge between our public and private institutions. That is why I would limit the subsidy to what can be roughly calculated as the costs of higher education-excluding tuition. The reason for not having the student repay the bank or company making the advance is the enormous problem of tracing, in a highly mobile society like ours, the particular recipient of such a loan. Using and reimbursing-the savings and loan institutions in the first place rather than having the Govern ment handle the matter directly simply insures a desirable decentralization. If local insurance companies, savings banks, and lending institutions can safelythat is without financial risk-be the administrators of such a program, then a centralized bureaucracy dealing either with students directly or with educational institutions directly is unnecessary. The reason for having the repayment by the student pegged to the income tax is quite obvious. First of all, there is a collection mechanism, a self-assessment mechanism carrying its own moral demands and legal penalties, already in existence. Secondly, it means that the obligation to repay will bear a direct relation to the financial success of the recipient. If it is desirable to equalize opportunity to the extent of making certain that a poor boy who remains in a vocation that does not yield a high return does not also carry an unthinkable loan burden, it seems to me necessary to have that loan burden automatically reduced to the extent that he is not financially successful. This, therefore, is simply a device to be sure that the obligation of repayment bears some rational relation to the ability to repay. This seems sensible if, as we are told by the economists and the statisticians, there is a rough aggregate correlation between higher educational opportunity and earning power. My proposal is simply put out to suggest that more ingenuity be spent in trying to figure out ways in which the job can be done without upsetting the autonomy, the variety, spontaneity, and the capacity for innovation of a private property educational system. For it seems to me that the greatest challenge to the United States is to find ways in this area, as in many others, which will maintain the values of a pluralistic self-determined society and at the same time bring the resources of that society to bear on the twin objectives of opportunity and survival. DEPARTMENT OF LABOR, Hon. WAYNE MORSE, Chairman, Subcommittee on Education, DEAR SENATOR MORSE: This is with reference to the labor standards provisions contained in section 112 of S. 1021, a bill to authorize a program of Federal financing the construction, rehabilitation, or improvement of needed academic ize assistance to public and other nonprofit institutions of higher education in financing the construction, rehabilitation, or improvement of needed academic and related facilities, and to authorize scholarships for undergraduate study in such institutions. We find these provisions in general accord with established Federal policy that all construction work assisted by Federal financing should be made subject to labor standards provisions for laborers and mechanics employed thereon. However, we consider the exception for donated services, as included inadvertently in the last part of the first sentence of both the above-cited sections, an inappropriate relaxation of this policy with respect to Federal funds spent on public construction. We therefore recommend that the semicolon in line 22 of section 112 on page 16 of S. 1021 be changed to a period, and the following material, beginning with the words "but the State education agency" through the remainder of the sentence, be deleted. We also recommend that the words "to nonprofit educational institutions" be inserted after the word "services" in line 3 of page 7, section 104 of S. 1241. Very truly yours, CHARLES DONAHUE, Solicitor of Labor. THE EASTERN SHORE OF VIRGINIA COLLEGE COMMITTEE, SENATOR WAYNE MORSE, DEAR SENATOR MORSE: It has been with great interest that I have followed the development of legislation to aid educational development in our country. However, I am not in full agrement with the program and there arise certain questions of interest. I have never felt that the opportunity to attend an educational institution is in itself a blessing. There is no merit in a diploma poorly used or in sharpened skills that are used to abuse people or institutions. Such occurs when there is a failure to develop a sense of social and personal responsibility toward the community and people of which we are a part. |