for Guam: $80,000 for American Samoa; and $145,000 for Puerto Rico and the Virgin Islands.

It is anticipated that the States will continue to use their allotments for the purposes stated above. However, the Vocational Education Act of 1963 provides that amounts not needed for these purposes may be reallotted for other purposes or to other States. Greatly increased flexibility will thus permit maximum utilization of available funds.

The Vocational Education Act of 1963 authorizes $202,500,000 for fiscal year 1967 for grants to States for persons who are attending high school, who have left high school, who need training or retraining for employment stability, and who are academically or socioeconomically handicapped; and for construction of area school facilities and certain ancillary services such as teacher training and supervision and State administration and leadership. This estimate proposes maintenance of the program at the 1966 level of $159,750,000.

Based upon the actual number of students served under vocational educational programs in the past, the projection of enrollments from 1964 to 1970 is as follows:

The availability of funds for construction under the Vocational Education Act of 1963 will materially speed up the Nation's efforts to meet the needs for greatly enlarged vocational and technical education offerings. State projections indicate approximately 1,400 area vocational-technical schools will be built by 1975, costing more than $1.2 billion.

The demands for vocational training and retraining at the high school level, the post-high school level and for adults, will continue in proportion to the availability of new facilities and program funds for all occupational training.

The major impact on the program during the next 10 years will be the initiation of needed construction and the provision of initial equipment. State projections indicate that about 40 percent of the allotments to the States will be used for constructing and equipping schools in fiscal year 1966.

During fiscal year 1965 the States invested $21⁄2 for every Federal dollar appropriated under provisions of the Vocational Education Act of 1963. State projections indicate that funds provided by local bond issues, State appropriations and other sources will increase the States investment to an estimated $31⁄2 for every Federal dollar appropriated in fiscal year 1967.

Local communities in many parts of the country are showing intense interest in area school facilities and have approved bond issues for construction of area schools. Fifteen State legislatures have appropriated funds both for construction and operation, and in other States the boards of vocational education have approved plans for expansion of vocational education facilities. In many areas existing facilities in high schools and junior colleges are being used to establish area programs. In some instances, vocational-technical facilities have been filled to capacity after 1 year's operation.

Research and special project activities—Grants, subsidies, and contributions

1966 estimate.

1967 estimate_

Increase

$17,750,000 17, 750,000 0

An amount of $17,750,000 is requested for 1967. This is the same amount which is available in 1966 for research, demonstration, and training grants to examine and improve vocational education activities.

The problems of a rapidly changing technology and the resultant industrial reorganization and changing job composition, intensified social and economic developments, and an expanding and changing work force have resulted in the

need for increased Federal support of research in vocational education. In order to provide this support the vocational education research program has been organized into seven areas of concern: curriculum development, pattern for State and local organization and administration, personnel recruitment and development, personal and social significance of work, occupational information and career choice processes, adult vocational education, and program evaluation.

The requested $17,750,000 for fiscal year 1967 will be used to strengthen the Vocational education capabilities in each of the seven areas with emphasis on the needs of young people from economically depressed communities who have academic, socioeconomic or other handicaps which prevent them for qualifying for or succeeding as full-time workers. Approximately $6.300,000 will be used for continuation costs of projects begun in fiscal years 1965 and 1966, and about $11,450,000 will support the initiation of new research. A summary of the numbers of grants received and funded in 1965 and estimates for 1966 and 1967 follows:

Grants to States under Appalachian Regional Development Act of 1965—Grants, subsidies, and contributions

1966 estimate.. 1967 estimate--

Increase_-_

$8, 000, 000 8, 000, 000

The request for $8 million in fiscal year 1967 represents the second half of the full authorization of $16 million for area vocational school construction under the provisions of the Appalachian Regional Redevelopment Act of 1965. The full authorization, with matching State funds, will provide facilities for 6,000 trainees at any one time. One project in the State of Georgia has been approved by the Appalachian Regional Commission with an allocation of $544,000 of Federal funds. It is anticipated that the initial appropriation of $8 million will be allocated during fiscal year 1966, and that architectural planning, site acquisition, and construction for most projects will be underway by July 1, 1966, The $8 million requested in fiscal year 1967 will permit the completion of vocational facilities projected by the States and approved by the Appalachian Regional Commission under the total authorization of $16 million included in the act.

The purpose of the work-study program is to provide part-time employment to students attending vocational education courses. Allotments to States are based upon populations in the 15- to 20-year age group. The law requires State matching funds during fiscal year 1967, equal to 25 percent of the total State's expenditure.

Although broad-scale efforts are being made to improve the economic position of minority groups, those living in depressed areas, and those whose skills have been displaced by economic progress, much needs to be done to help schoolchildren who are unable to continue their studies without financial help.

A total of 15.000 needy students participated in the work-study program during fiscal year 1965, approximately 27 percent of this number participated in the special summer work-study program designed to help these students earn funds to return to school and continue their vocational training.

During fiscal year 1966, with $25 million available for the work-study program, it is expected that approximately 85.100 needy students will be provided employment to assist them in continuing their studies and complete their academic and vocational training. Reports from States indicate that the workstudy program has had a very beneficial effect toward reducing the large number of school dropouts.

Funds requested for fiscal year 1967 will provide support for approximately 35,000 students. The program will eventually phase out as the Neighborhood: Youth Corps program gradually assumes responsibility.

Residential vocational schools-Grants, subsidies, and contributions

1966 estimate____ 1967 estimate_. Increase_

$3,500,000 3,500,000

Funds are requested in the amount of $3,500,000 to implement the authorization contained in the Vocational Education Act of 1963 (section 14) which permits the Commissioner of Education to make grants for residential vocational schools. These funds will permit grants for initial planning and architectural fees for seven residential vocational schools. They will provide opportunities for effective experimental, demonstration and evaluation of the residential school concept. The schools will be located in the following locations: Atlanta, Ga.; Okmulgee, Okla.; Philadelphia, Pa.; St. Louis, Mo.; San Diego, Calif.; Ashland, Ky.; Washington, D.C.

At a time when less than one-half of our Nation's youth go to college from secondary schools, virtually all student loan guarantee programs are geared to the collegebound students. While a college education is a valuable asset, it is neither feasible nor desirable that all students pursue that form of postsecondary school training. There are many students who prefer to continue their education at a Vocational school; usually these students know exactly the careers they wish to enter. It is in the national interest that assistance be provided to these students to help them achieve their aspirations and to provide the Nation's work force wih more vocationally and technically trained persons which it so vitally needs. Only one State-New York-currently has a loan guarantee program comprehensive enough to include students in the vocational school category. The National Vocational Student Loan Insurance Act of 1965 authorizes the appropriation of funds to encourage States and nonprofit private institutions and organizations to establish adequate loan insurance programs for students who wish to attend postsecondary, business, trade, technical, and other vocational schools. It also authorizes a Federal loan insurance fund for students who do not have reasonable access to a State or private nonprofit program of loan insurance.

The guaranteed loan program makes it possible for banks and other commercial sources of credit to make large amounts of credit available to students while exercising prudence in safeguarding funds entrusted to them. The program offers maximum encouragement and assistance to States to establish State loan insurance programs, and if a State is unable to do this, offers a similar assistance to nonprofit institutions and organizations.

The act also provides that the Federal Government pay the total amount of interest on loans to qualified students (those whose family income is less than an adjusted $15,000) while they are pursuing a course of study and 3 percentage points of the interest thereafter. Families with adjusted incomes over $15,000 may take advantage of the guaranteed loans but must assume all interest payments.

A supplemental appropriation of $1 million will be requested in 1966 to implement the program, and the 1967 requirements are estimated at $1,800,000.

60-627-66-pt. 2—24

ADVANCES FOR RESERVE FUNDS

These funds are to be used over a 3-year period for the establishment and strengthening of State and private nonprofit reserve funds. The act authorizes $1,875,000 for making advances to State and nonprofit student loan insurance programs; $850,000 of this authorization is being requested in a fiscal year 1966 supplemental. The balance of the authorization, $1,025,000, is requested for fiscal year 1967.

INTEREST PAYMENTS ON INSURED LOANS

Subsidization of interest payments on insured loans is estimated to cost $775,000 for fiscal year 1967, or an increase of $675,000 over the 1966 request of $100,000. Payments will be made for approximately 55,000 students in 1967, compared to 15,000 in 1966.

INSURANCE FUND

An appropriation of $50,000 is being requested, in a fiscal year 1966 supplemental appropriation, to establish the Federal loan insurance fund for those students without access to a State or private nonprofit program. A charge of one-fourth of 1 percent will be made to all lending agencies to which insurance certificates are issued. This charge, together with the initial appropriation of $50,000 is believed to be sufficient to cover any defaults in fiscal year 1966. This amount will be transferred in 1967 to an account entitled the "Student Loan Insurance Fund" which will be established by merging the student loan insurance fund created by section 431 of the Higher Education Act of 1965 and the vocational student loan insurance fund created by section 138 of the Vocational Student Loan Insurance Act of 1965.

Allotment of Federal funds to states and outlying parts under the Vocational Education Act of 1963 (Public Law 88-210)

1 Based upon authorizations of $177,500,000 with 10 percent reserved for research and special project activities.

2 No more than 1 percent of such allotment or $10,000 (whichever is the greater) may be expended for the development of the State plan provisions for work-study programs or for the administration of such programs.