AID RECEIVED BY SMALL COLLEGES

Thirty-one of our colleges, 46 percent, have received over $21 million from the housing program, and have had very satisfactory relations, with the HHFA. I would like to mention the name of Jay DuVon specificaly in the housing program. He has been a most helpful person. Sixty-two colleges, 92 percent, have received $4,500,000 in student loans, and that has worked out very well.

Now I will go directly to the legislation, and let me say that my directors have been pretty well briefed on this. In the exhibits that I have attached to the testimony, I have covered the legislation for the membership as a whole, and the Commissioner of Education, Frank Keppel, has talked to our directors. Representative Edith Green talked at one of our regional meetings, so they have been pretty well briefed.

In preparation for this meeting, I polled the entire membership by telegram. I have spent the last week reading letters and telegrams and listening to telephone calls from these people as they have come in. Half of the group are in favor of S. 580. Fifty percent favor it, 30 percent are in doubt or have divided opinions, and 20 percent are opposed to it. On the strength of this, I am authorized by my directors to say that the council supports the bill.

Senator CLARK. I think perhaps you could be most helpful to us, Dr. Hill, in view of the fact that your testimony has been printed in full in the record, if you would now confine yourself to the parts of the bill to which a substantial portion of your membership takes exception, so that we can see what you really object to. We know what you are for.

Will you state then your objections, which if they have any merit in the eyes of the subcommittee we can do something to try to meet your view.

Mr. HILL. Yes. I have it right here. Those who are skeptical about Federal aid raise these points.

Senator CLARK. Federal investment.

Mr. HILL. Federal investment, I beg your pardon. You see, I formed a bad habit, but I am trying to start a good one.

Federal investment should be only the last resort. One of these men said only survival is more important that socialization which is a phrase that I cherish. Separation of church and state must be preserved at all costs. The more you allow the Government to do for you, the less you allow the Government to do for yourself.

REDTAPE A HANDICAP

The bookkeeping redtape and delays in dealing with the Federal Government make it impractical for many of these small colleges. It may be all right for large institutions with a tremendous staff and plenty of IBM machines and all this kind of thing, but this poses a real burden on the small college unless it can move pretty fast.

Senator CLARK. All of your members are private institutions.
Mr. HILL. They are all private, that is right."

We appreciate, and I have just pointed out that 92 percent or whatever it is of my colleges that have used Federal loans-I guess that is the wrong figure 46 percent, but the point is that I was talking with

a man on the phone the other day, and he said, "We can do this much cheaper in our part of the country privately than we can taking Federal money.

I said, "How do you do it?"

He said, "In the first place, if you take a Federal loan, they are required to use union labor. We don't have to use union labor here. We can get this done perfectly well without it. They have wage rates. They have building code requirements where we can put up buildings that are perfectly satisfactory and safe and meet the State fire codes and those kinds of things, much cheaper and much faster than we can if we go through the Federal loan business."

Senator CLARK. Well, more power to you. No one is saying they can't, I assure you.

Dr. HILL. No. Well, this is one of the points.

DISCRETION OF THE COMMISSIONER

Now there is another area here that I want to mention. You say where they worry about Federal investment. In both S. 580 and the House bill, H.R. 3000, I have read this phrase: "The Commissioner shall not approve the application for grant under this part unless the applicant agrees to provide programs of"-this was in relation to college-level technical education "technical education meeting the standards of content, scope and quality prescribed by the Commissioner."

In this particular case it says "with advice of an advisory committee." Now if the Commissioner-and I am not using this in any personal sense whatever, but just any Commissioner has the authority to dictate "content, scope and quality" of a program, then my presidents say this is Federal control right in the heart of the institution, and this they resent and resist. This they would object to.

Senator CLARK. What is their thinking as to how the Federal Government would couch such a requirement which could assure that the money would not be wasted by an inadequate program?

Dr. HILL. I was afraid you would ask that question, and so I have been thinking about it. I think the Commissioner, again using him as a symbol of the responsibility of the Federal Government, would tainly have to ascertain that this was a legitimate institution, that was chartered by a State, that as a minimum its credits would be ced by three other institutions, that it was eligible for listing in Office Directorate and that it was not a diploma mill but a titution doing a good job.

ink beyond that, he might want to be sure that it had a minimum, but at least a minimum of financial stability. value at the plant and endowment in the CASC colleges

sounds pretty small, but I would say $1 million or on might be a minimum evidence of financial stability, --- night put a student limit on it. Say you would not o a college with fewer than 100 students, so that dence that the college had some money and had nd was in operation. are gets dangerous, because we had a small ex

nized in the same league by another one of our members, which is a small Catholic college in Kansas. The two presidents educationally would not agree at all.

This is true right straight through a whole range of this association, so how in the world could the poor Commissioner say "this is a valid education program and that one isn't," when the college presidents in a professional group can't even agree upon it, let alone what the accrediting association says. This, if I may say so, puts a tremendous responsibility on the Commissioner or his staff.

Senator CLARK. Would you suggest therefore eliminating the language you have just read, or would you favor some substitute language, and if so, what?

RECOMMENDED AMENDMENT

Dr. HILL. I would suggest a modification of that language, and I haven't spelled it out myself.

Senator CLARK. It would be helpful to the subcommittee if you and your associates would do a little thinking on this and submit a suggestion.

Dr. HILL. All right.

Senator CLARK. Which we would consider when we mark up the bill.

Dr. HILL. I would be glad to do it. You see, we received notice of this meeting a pretty short time ago, and we knocked ourselves out getting this far.

Senator CLARK. We will be at it quite awhile.

Dr. HILL. But this is a thing that I would really welcome doing. If you would give us a few days, we will put together a suggested statement for you on that point.

I have mentioned the points in the bill which are of most use to our colleges, and it is right here, so with your permission I will go straight to my recommendations and the reasons for them. Now my recommendations are that I want to see Federal investment used in these small colleges in a way that will encourage initiative, and that will provide additional incentives.

I want to give the college president an argument. I want to put him in a stronger competitive position to go out and raise private money. Now in order to do this, I am suggesting that the Government make grants and loans both available to these colleges at their options. You see, the church-related colleges want loans, broadly speaking. I would like to have the choice made either way, so they could have whatever they want.

LOANS OR GRANTS

Senator CLARK. Why would the church-related colleges always want loans instead of grants?

Dr. HILL. Senator Clark, you must have been briefed particularly for this.

Senator CLARK. No, I promise you I haven't.

Dr. HILL. Because the president of a certain college over the telephone gave to me-and I will read what I have here. The president of one of our strong church-related colleges has explained its concern

over Government grants and the church-state issue clearly in this way. He says he has no hesitation about accepting a loan, because it is strictly a business proposition. You borrow the money, you pay the interest, you pay back the principal, and that is the end of it.

However, a grant is different. This turns the private college into a public institution. Now this is what is worrying him. You may not agree, but this is what is concerning him. Then if a student or professor refused to follow college regulations and the college dismissed him, he might have legal grounds for suit, because the college was supported by Government money, and had not violated national law, merely a college regulation.

Senator CLARK. Do you think that point of view would be identical with those of your Catholic members?

Dr. HILL. I don't see any distinction in principle. I think what would be true of fairly conservative Protestant church leaders in principle could be true of Catholic. I don't see that that makes any difference.

Senator CLARK. I agree in principle. I am just wondering from my own experience with some of the institutions in Pennsylvania whether that wouldn't be the fact. I would hazard a guess that several of them would be happy to have grants.

Dr. HILL. Let me finish this man's statement. He said he wants to know what guarantee is provided for the private college by the Government that this hypothetical case might not materialize.

In other words, he is not saying, "I would never take a grant from the Government, but if I take a grant, I want to know what strings are attached to it and what the next possible steps might be because of this."

Senator CLARK. The thing that disturbs me personally is that if you have the grant as well as the loan program you will end up with no loan program.

Now in the college housing situation the loan program would seem to have great acceptability with the theory that you could finance it through the charges you made for these dormitories. This seems to be a rather accountless world, which I deplore.

If you build a physics laboratory you charge for its use and the feeling seems to be you can't take a loan for that, but I am concerned that if we do have a straight loan and grant program, we will find that everybody is going to want grants.

Dr. HILL. I think you have a good point. The thing that has come out is this. Some of our colleges that want grants have said—now, remember, I am dealing with very small colleges. I am not in the same league with the American Council on Education or the Association of American Colleges or the land-grant colleges, some of the big institutions. But I am thinking in terms of a small college whose president talked to me on the phone the other day and he said

We are too small to swing a loan, but

he said

if the Government or anybody else would give us the money to put up the libraries, the laboratories, and the kind of academic buildings that we need, then that will release other funds that we can use for educational purposes, and pretty soon we can get over the hump and go it alone.

GUARANTEED LOAN PROGRAM

Senator CLARK. What is your thought about a guaranteed-loan program?

Dr. HILL. I like it.

Senator CLARK. You like it?

Dr. HILL. Yes.

Senator CLARK. Something like FHA?

Dr. HILL. Yes. You are talking about what is well in the bill now as I understand it this insurance is only for student loans; am I correct on that?

Senator CLARK. That is right.

Dr. HILL. But what you are referring to is guarantees for building loans?

Senator CLARK. Yes.

Dr. HILL. This is already being started. It may have been started some time ago, and I don't know it, but I know of one new venture in this area in the private field, and I checked with the man who is starting that, and asked him how he thought he would react if the Government did it, and he said, "Great." It would help him that much more. Senator CLARK. Of course, that would eliminate the fear of your friend that he could not swing a loan if he had a Government guarantee.

Dr. HILL. Yes, it would.

Senator CLARK. And it would also as a practical matter, take the authorization out of the budget.

Dr. HILL. It would do what?

Senator CLARK. It is not your concern, but it would take the authorization out of the budget. On the FHA program we guaranteed billions and billions and billions of dollars for Federal housing which comes under the Federal budget.

Dr. HILL. I see what you mean, yes. Well, this man said quite frankly

We can do better with private money. The trouble is, you borrow Government money and you are in "hock" to the Government for 40 years, and when you consider the 31⁄2 percent interest or whatever it is over that period of time, it is not such a good deal.

He said

We would rather take a loan and pay a higher interest rate for 10 or 15 years and wipe it up and have it gone.

Senator CLARK. Yet they don't take that view with respect to college housing?

Dr. HILL. Well, this particular man was talking about college housing. He would do it either for college housing or classroom buildings. Senator CLARK. We never have any trouble somehow getting the college housing loans out.

Dr. HILL. No, I should say not.

Now my recommendation is this: I am trying to emphasize the small, rapidly growing colleges. I like the phrase "America's growing colleges."

It all depends on who is counting what, but these are certainly among the fastest growing institutions in the country percentagewise, and they represent a lot more that are like them.

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