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Education – HEA [Higher Education Act] Reauthorization [6]
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Education – HEA [Higher Education Act] Reauthorization [6]
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Records of the National Economic Council (Clinton Administration)
Bob Shireman's Files
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FOIA Number: 2017-1076-F
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MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
National Economic Council
Series/Staff Member:
Bob Shireman
Subseries:
OA/ID Number:
13220
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Folder Title:
Education - HEA [Higher Education Act] Reauthorization [6]
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Charlotte_Fraas @ ed.gov
07/22/97 06:48:00 PM
Record Type:
Record
To:
Robert M. Shireman
CC:
Subject: Higher Ed
Not to beat a dead horse, but I was at a meeting with Sally Stroup and
she said the following re higher ed reauthorization
By Friday they would have drafts of Graduate, International programs.
title III and hep-camp
They will start drafting title IV Aug 1 and will have it finished by
the end of the recess, barring some unforeseen problem eg they would
have to consult a member who was unreachable on an important item.
During this process they will have regular consultation/contact with
la's for committee members to avoid markup problems. They will move
the bill mid-Sept. They have ended their hearings.
They are "in line" with what the Administration appears to be
proposing re graduate programs.
Todd Jones is drafting title V--it will be patterned after the
professional development piece in IDEA
They don't care about international ed being changed.
RE applications--prior prior and no FAFSA (?) will be huge problems.
They want to keep the FFEL/DL fight as quiet as possible.
They'd like to eliminate origination fees but there is not
money--finding $ to change need analysis, which affacts subsidized
lonas, to meet paygo would even be a problem.
Campus-based--Sally has a personal mission to look at the formula but
realizes the pitfalls. Wants us to consider doing the same.
HR 715(campus crime) will be folded into the HEA
SO, all this points to our objectives of moving HEA pieces up to the
Hill sooner than possible.
Kathryn B. Stack
04/23/97 09:48:54 AM
-
Record Type:
Record
To:
Robert M. Shireman/OPD/EOP
CC:
Patricia A. Smith/OMB/EOP
Subject:
Re: I'm all confused
It's my understanding from Pat that the specific "service" deferment that used to be in statute and
regulations no longer exists. But the current "economic hardship" deferment covers students getting
subsidized loans that take a year off to do service (assuming those doing "service" get no or very little
income).
The DPC proposal -- as we see it -- would require extending the same deferment eligibility to students
with unsubsidized loans. William estimated the cost at $7 million over five years, assuming no
inducement effect, and historical data that show 3% of those individuals that request a deferment do so
for "service-related" reasons.
I faxed Maureen the one page sheet we gave Diana, that includes the info William gave us. It would be
good if Maureen could take a hard look to see if she agrees with William's assumptions (his cost estimate
seems quite low).
APR-23-97 WED 08:18
Economic Mardship. new loans
$ 682.210, Note
34 CFR Ch. VI (7-1-94 Edition)
Off. of PO
shall provide the lender with a state-
paragraph (c)(4): and by adding a new pare.
time study
ment certifying that she
graph (3). effective July 1. 1995 or after the
scribod in
(i) IS the mother of a preschool-age
information collection requirements con-
rower is n.
child:
tained 10 this section have been approved by
SLS loan
(ii) Entered or reentered the
the Office of Management and Budget.
ered by the
whichever is later. A document announcing
(3) Grade
workforce not more than one year be-
the effective date will be published in the
me borrow.
fore the beginning date of the period
FEDERAL RECISTER. For the convenience of
ship defere
for which the deferment is being
the reader. the revised text is set forth
prescribed
sought:
below.
(4) Rehabi
(iii) Is currently engaged in full-time
AD eligible
682.210 Deferment.
employment: and
cation trai
(iv) Docs not receive compensation
(a) General. (1)(i) A borrower is entitled to
cordance
that exceeds $1 per hour above the rate
have periodic installment payments of Drin-
582.210(e).
cipal deferred during authorized periods
prescribed under section 6 of the Fair
(5) Unem
after the beginning of the repayment period.
borrower i-
Labor Standards Act of 1938 (the Ped-
pursuant to paragraph (b) of this section.
deforment
eral minimum wage).
(ii) With the exception of a deferment Au.
scribed in §
(2) In addition to the certification re-
thorized under paragraph (o) of this section,
quely. do n:
quired under paragraph (r)(1) of this
a borrower may continue to receive a spe-
(6) Econov
section. the borrower shall provide to
cific type of deferment that Is limited to a
borrower is
the lender documents demonstrating
maximum period of time only if the total
deferment :-
amount of time that the borrower has re-
the age of her child (e.g., a birth ccr-
time that.
ceived the deferment does not exceed the
tificate) and the rate of her compensa-
years. if th.
maximum time period allowed for the
tion satisfac
tion (e.g., a pay stub showing her hour-
deferment.
the borrowe:
ly rate of pay).
(1) Has bac
(3) For purposes of this paragraph--
deferment u
(1) A preschool-age child is one who
Perkins Los
has not yet enrolled in first grade or a
(11) If two individuals are jointly liable for
time for wh
higher grade in elcmentary school: and
repayment of a PLUS loan or a Consolida-
an oconomic
tion loan. the lender shall grant a request for
(ii) Full-time employment involves
her FFEL 10:
deferment if both individuals simultaneously
at least 30 hours of work a week and is
(11) Is recei
meet the requirements of this section for re-
expected to last at least 3 months.
state public
ceiving the same, or different deferments.
to Families
(Approved by the Office of Management and
plemental Se
Budget under control number 1840-0538)
state general
(Authority: 20 U.S.C. 1077. 1078. 1078-1. 1078-2.
(iii) Is we
(c)
1078-3. 1082. 1085)
total monthl
(4) A borrower serving in a medical intern-
[57 FR 60323. Dec. 18. 1992. as amended at 58
ceed the grea
ship residency program. except for an intern.
FR 9120. Feb. 19. 1993; 59 FR 25746, May 17.
(A) The m:
ship in dentistry. is prohibited from receiv-
section 6 of L
1994]
ing or continuing a deferment on a Stafford.
EFFECTIVE DATE NOTES: 1. At 59 FR 25746.
1938: or
SLS. or Consolidation loan under paragraph
May 17. 1994, in $682.210. in paragraph
(B) An amc
(e) of this section.
(a)(3)(i). after the word "loan". "for which
poverty line
the application was received by an eligible
mined in 200
lender on or after January 1. 1993" was
the Communi
added: in paragraph (a)(8). the phrase "as to
($) Deferments for new borrowers on or after
(iv) Is not
that loan" was removed: in paragraph (b)(6)
income that E
July 1. 1933-
introductory text. after the word "when".
(1) General. A new borrower who receives
fied in parag
"the" was removed and "2" was added in Its
and. after ded
an FFEL Program loan first disbursed on or
place: in paragraph (c)(3). before "SLS".
borrower's m.
after July 1. 1993 is entitled to receive
"an" was removed and "a Stafford." was
deferments under paragraphs (s)(2) through
postsecondary
added in its place. after the word "applica-
($)(6) of this section. For purposes of this sec.
mined under F
tion". "or other form certified by the school
tion. a "new borrower" is an individual who
tion. the rem.
or for multiple holders of 2 borrower's loans.
has no outstanding principal or interest bal-
doos not exc
shared data from the Student Status Con-
ance on an FFEL Program loan as of July 1.
paragraph ($)(t
firmation Report," was added. after the word
1993 or on the date he or she obtains & loan
(v) For a di
"outstanding". "Stafford," was added. and
on or after July 1. 1993. This term also in-
graph (s)(6)(iv
"that is held by the lender" was removed, ef-
cludes a borrower who obtains a Federal
shall require [
fective either 45 days from the date of publi-
Consolidation Loan on or after July 1. 1993 if
the following
cation in the FEDERAL REGISTER or later If
the borrower has no other outstanding FFEL
an initial peric
Congress takes certain adjournments.
Program loan when the Consolidation Loan
(A) Evidence
borrower's mo
2. At 59 FR 33594, June 29. 1994 $682.210 was
was made.
amended by revising paragraph (a)(1): by
(2) Student deferment. AD eligible borrower
income. as def
adding a new paragraph (a)(11): by revising
is entitled to a deferment for at least half-
this section: ar
870
APR-23-97 WED 08:19
P.03
VI (7-1-94 Edition)
Off. of Postsecondary Educ., Education
§ 682.211
adding a new para.
time study in accordance with the rules pre-
(B) Evidence that would chable the lender
1. 1995 or after the
seribed in (682.210(c). except that the bor
to determine the amount of the monthly
requirements con.
tower is not required to obtain a Stafford or
payments that would have been owed by the
ve been approved by
SLS loan for the period of enrollment cov-
borrower during the deferment period to
ment and Budget.
ered by the determent.
other entities for federal postaccondary edu-
Doument announcing
31 Graduate fellowship deferment. An cligi-
cation loans in accordance with paragraph
be published in the
DIE borrower is entitled to R graduate fellow.
(s)(G)(iii) or this section.
the convenience of
ship determent in accordance with the rules
(vi) To qualify for a subsequent period of
1 text Is set forth
prescribed in 682.210(d).
determent that begins less than one year
(4) Rehabilitation training program deferment.
after the end of a period of deferment under
A: eligible borrower is entitled to a rehabili-
paragraphs ($)(6)(iin or (iv) of this section.
ation training program deferment in ac-
the lender shall require the borrower to sub-
rower is entitled is
cordance with the rules prescribed in
mit a copy of the borrower's federal income
IC payments of prin-
$682.210(e).
tax return if the borrower filed a Lax return
authorized Deriods
(5) Unemployment deferment. An eligible
within eight months prior to the date the
:C repayment period.
borrower 15 entitled to an unemployment
deferment is requested.
) of this section.
deforment in accordance with the rules pre-
(vii) For purposes of paragraph (s)(6)(iii) of
1 or a deferment au.
scribed in $682.210(h) for periods that collec-
this section. a borrower is considered to be
is 10) of this section.
tirely. do not exceed 3 years.
working full-time If the borrower is expected
40 to receive a spe.
(6) Economic hardship deferment. An cligible
to be employed for at least three consecutive
that IS limited to a
10 only if the total
borrower IS entitled to an economic hardship
months at 30 hours per week.
deferment for periods of up to one year at a
(viii) In determining a borrower's eligi-
** borrower has re-
time that. collectively. do not exceed 3
bility for an economic hardship deferment
oes not exceed the
years. if the borrower provides documenta-
under paragraph (5)(6) of this section. the
I allowed for the
tion satisfactory to the lender showing that
lender shall count only the monthly pay-
the borrower-
ment amount (or a proportional share If the
(i) Has been granted an economic hardship
payments are due less frequently than
deferment under either the FDSL or Federal
monthly) that would have been owed on a
are jointly liable for
Perkins Loan Programs for the period of
federal postsecondary education loan if the
oan or a Consolida-
time for which the borrower has roquested
loan had been scheduled to be repaid in 10
I grant a request for
an economic hardship deferment for his or
years from the date the borrower entered re-
uals simultaneously
her FFEL loan:
payment. regardless of the length of the bor-
1 this section for re-
(11) IS receiving payment under a federal or
rower's actual repayment schedule or the ac-
rent deferments.
state public assistance program. such as Aid
tual monthly payment amount (if any) that
to Families with Dependent Children, Sup-
would be owed during the period that the
plemental Security Income. Food Stamps. or
borrower requested an economic hardship
state general public assistance:
deferment.
(iii) Is working Cull-time and earning EL
(ix) For purposes of paragraph ($)(6) of this
17 A medical Intern-
total monthly vross income that does not ex-
section. a borrower's total monthly gross In-
except for an intern-
ceed the greater of-
come shall be the gross amount of income re-
nibited from receiv.
(A) The minimum wage rate described in
ceived by the borrower from employment (ei-
ment on a Stafford.
section 6 of the Fair Labor Standards Act of
ther full-time or part-time) and from other
an under paragraph
1938: or
sources.
(B) An amount equal to 100 percent of the
(Authority: 20 U.S.C. 1077. 1078. 1078-1. 1078-2.
poverty line for a family of two as deter.
1078-3, 1082, 1085)
mined in accordance with section 673(2) of
the Community Service Block Grant Act: or
infrowers on or after
(iv) Is not receiving total monthly gross
682.211 Forbearance.
income that exceeds twice the amount speci-
(a)(1) The Secretary encourages a
rower who receives
fied in paragraph (s)(6)(111) of this section
lender to grant forbearance for the ben-
itst disbursed on or
and. after deducting an amount equal to the
intitled to receive
borrower's monthly payments on federal
efit of a borrower or endorser in order
aphs (s)(2) through
postsecondary education loans. as deter-
to prevent the borrower or endorser
purposes of this sec-
mined under paragraph ($)(6)(viii) of this sec-
from defaulting on the borrower's or
$ an Individual who
tion. the remaining amount of that income
endorser's repayment obligation. or to
pal or interest bal-
does not exceed the amount specified in
permit the borrower or endorser to re-
a loan as of July 1.
paragraph (s)(6)(111) of this section.
sume honoring that obligation after de-
she obtains " loan
(v) For a deferment granted under para-
fault. Forbearance means permitting
This term also in-
graph (s)(6)(iv) of this section. the lender
shall require the borrower to submit at least
the temporary cessation of payments.
obtains a Federal
the following documentation to qualify for
allowing an extension of time for mak-
after July 1. 1993 If
outstanding FFEL
an initial period of deferment-
ing payments. or temporarily accept-
Consolidation Loan
(A) Evidence showing the amount of the
ing smaller payments than previously
borrower's most recent total monthly gross
werk scheduled.
:1 eligible borrower
income. as defined in paragraph (S)(6)(1X) of
(2) Subject to paragraph (h) of this
:t for at least half-
this section: and
section. a lender may grant forbear-
871
APR-23-97 WED 08:19
P. 04
old
loans
only
34 CFR Ch. VI (7-1-94 Edition)
Off. of Postsecondary Educ., Education
§
i the certifi-
(1) That the borrower is engaged in
alent to the benefits offered to other
ficial of the appropriate State 1
full-time service as an officer in the
employees of the organization:
agency certifying that the in
,t. as an alter-
Commissioned Corps of the USPHS:
(iv) Does not. as part of his or her du-
or residency program. or a
on of employer
(2) The date on which the borrower's
cies. give religious instruction. conduct
thereof. is required to be comp!
der paragraph
service began: and
worship services. engage in religious
fore the borrower may be cert
Ion. comparable
(3) The date on which the borrower's
proselytizing. or engage in fund-raising
professional practice or service
>rrower has used
service is expected to end.
to support religious activities: and
(o) Parental-leave deferment.
ents of the Unern-
(k) Peace Corps deferment. To qualify
(v) Has agreed to serve on a full-time
qualify for the parent
Service. provided
number of contacts
for a deferment for service under the
basis for a term of at least one year:
deferment described in paragra
Peace Corps Act. the borrower shall
(2) The date on which the borrower's
of this section. the borrower S
ne information the
vide the lender with-
provide the lender with a statement
service began: and
required to provide
from an authorized official of the
(3) The date on which the borrower's
(i) A statement from an au
it's regulations.
Peace Corps certifying-
service is expected to end
official of a participating sch
ent. (1) To qualify
(1) That the borrower has agreed to
(n) Internship or residency deferment.
tifying that the borrower was
"ment, a borrower
(1) To qualify for an internship or resi-
on at least a half-time basis di
serve for a term of at least one year:
der with-
dency deferment under paragraphs
six months preceding the begi
(2) The date on which the borrower's
(b)(2)(v) or (b)(5)(iii) of this section. the
the deferment period:
nent from the bor-
service began: and
or personnel offi-
(3) The date on which the borrower's
borrower shall provide the lender with
(ii) A statement from the
service is expected to end.
a statement from an authorized official
certifying that the borrower-
ower is on active
of the organization with which the bor-
(A) Is pregnant. caring for t
(1) Full-time volunteer service in the
orces of the United
rower is undertaking the internship or
newborn child. or caring for a
ACTION programs. To qualify for a
deferment as a full-time paid volunteer
residency program certifying-
mediately following the plac.
ich the borrower's
in an ACTION program. the borrower
(i) That the internship or residency
the child with the borrower in
shall provide the lender with a state.
program is a supervised training pro-
tion with an adoption:
ich the borrower's
ment from an authorized official of the
gram that requires the borrower to
(B) Is not. and will not be. :
end: or
hold at least a baccalaureate degree
school during the defermen
program certifying-
prior to acceptance into the program:
and
it borrower's offi-
(1) That the borrower has agreed to
(ii) That. except for a borrower that
(C) Is not. and will not be. e!
and
serve for a term of at least one year:
provides the statement from a State of-
full-time employment dur
orrower's military
(2) The date on which the borrower's
service began: and
ficial described in paragraph (n)(2) of
deferment period: and
(3) The date on which the borrower's
this section. the internship or resi-
(iii) A physician's statem
e of this section.
dency program leads to a degree or cer-
onstrating the existence of
neans the Army.
service is expected to end.
tificate awarded by an institution of
nancy. 3 birth certificate. or
ine Corps. and the
(m) Deferment for full time volunteer
higher education, a hospital. or a
ment from the adoption agenc
service for a tar-erempt organization To
health care facility that offers post-
evidencing a pre-adoption plac
sted in a reserve
qualify for a deferment as a full-time
graduate training:
(2) For purposes of I
med Forces may
Daid volunteer for a tax-exempt organi-
(iii) That the borrower has been ac-
(0)(1)(ii)(C) of this section.
y deferment only
zation. a borrower shall provide the
cepted into the internship or residency
employment involves at least
time basis that is
Icnder with a statement from an au-
period of at least
thorized official of the volunteer pro-
program. and
of work per week and is ex
(iv) The anticipated dates on which
last at least three months.
evidenced by of-
gram certifying-
the borrower will begin and complete
(p) NOA.A deferment. To que
unless an order
(1) That the borrower-
the internship or residency program.
National Oceanic and Atmos
cion of reservists
(1) Serves in an organization that has
or. in the case of a borrower providing
ministration (NOAA) deferr
obtained an exemption from taxation
the statement described in paragraph
borrower shall provide the le
under section 501(c)(3) of the Internal
a statement from an authoriz
isted in the Na.
(n)(2) of this scotion, the anticipated
Revenue Code of 1986:
date on which the borrower will begin
of the NOAA corps. certifying
3 for a military
the borrower is
(ii) Provides service to low-income
and complete the minimum period of
(1) That the borrower is
persons and their communities to R3-
as a member or
participation in the internship pro-
duty service in the NOAA cor
Force Reserves.
sist them in eliminating poverty and
gram that the State requires be com-
(2) The date on which the 1
poverty-related human. social. and en-
pleted before an individual may be cer-
service began: and
ements of para-
vironmental conditions:
ion.
tified for professional practice or serv-
(3) The date on which the
(iii) Does not receive compensation
service is expected to end.
ice deferment. To
ice.
that exceeds the rate prescribed under
(2) For a borrower who does not pro-
(q) Targeted teacher deferme
Health Service
section 6 of the Fair Labor Standards
vide a statement certifying to the mat-
qualify for a targeted
or shall provide
Act of 1938 (the Federal minimum
ters set forth in paragraph (n)(1)(ii) of
deferment under paragraph (
tement from an
wage). except that the tax-exempt or-
this section to qualify for an internship
this section. the borrower.
he United States
ganization may provide health. retire-
deferment under paragraph (b)(2)(v) of
school year of service for
USPHS) certify-
ment. and other fringe benefits to the
this section. the borrower shall provide
deferment is requested. mu
volunteer that are substantially equiv-
the lender with a statement from an of-
to the lender-
866
867
P.05
APR-23-97 WED 08:20
263
HIGHER EDUCATION ACT OF 1965
Sec. 465
(A) 90 percent of the loan under this part;
(B) the interest due on such loan; and
(C) any collection fees due on such loan;
in a lump sum payment.
(20 U.S.C. 1087dd) Enacted June 23, 1972, P.L. 92-318, sec. 137(b). 86 Stat. 275,
277: amended October 12, 1976. P.L. 94-482, sec. 130(d), 130(c), 130(f), 130 (g)(1)
and (g)(2), 90 Strt. 2147; amended June 15. 1977. P.L. 95-43, secs. 1(aX39), 91 Stat.
217; amended October 3, 1980, P.L. 96-374, secs. 442(b) (4), (5), 443, 444, 445(b)(2),
446, 448(c), 1391. 94 Stat 1440, 1441, 1442, 1443, 1503; amended August 13, 1981.
P.L. 97-35, sec. 539, 95 Stat. 458; amended April 7, 1986, P.L. 99-272, sec. 16028,
100 Stat. 353; amended October 17. 1986, P.L. 99-498, sec. 405(a), 100 Stat. 1448;
amended June 3, 1987, P.L. 100-50, sec. 13(i), 101 Stat 349; amended July 18,
1988, P.L. 100-369, sec. 7(c). 102 Stat. 837; amended December 19, 1989, P.L. 101-
239, sec. 2001(3), 103 Stat. 2111; amended July 23, 1992, P.L. 102-325, sec. 464.
106 Stat. 580; amended December 20, 1993, P.L. 103-208. sec. 2(f)(9)-(11), (m), 107
Stat. 2471, 2486.
SEC. 465. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.
(a) CANCELLATION OF PERCENTAGE OF DEBT BASED ON YEARS
OF QUALIFYING SERVICE.-(1) The percent specified in paragraph
(3) of this subsection of the total amount of any loan made after
June 30, 1972, from a student loan fund assisted under this part
shall be canceled for each complete year of service after such date
by the borrower under circumstances described in paragraph (2).
(2) Loans shall be canceled under paragraph (1) for service-
(A) as a full-time teacher for service in an academic year
in a public or other nonprofit private elementary or secondary
school which is in the school district of a local educational
agency which is eligible in such year for assistance pursuant
to chapter 1 of the Education Consolidation and Improvement
Act of 1981, and which for the purpose of this paragraph and
for that year has been determined by the Secretary (pursuant
to regulations and after consultation with the State edu-
cational agency of the State in which the school is located) to
be a school in which the enrollment of children counted under
section 111(c) of the Elementary and Secondary Education Act
of 1965 exceeds 30 percent of the total enrollment of that
school;
(B) as a full-time staff member in a preschool program car-
ried on under the Head Start Act which is operated for a pe-
riod which is comparable to a full school year in the locality
if the salary of such staff member is not more than the salary
of a comparable employee of the local educational agency;
(C) as a full-time special education teacher, including
teachers of infants, toddlers, children, or youth with disabil-
ities in a public or other nonprofit elementary or secondary
school system, or as a full-time qualified professional provider
of early intervention services in a public or other nonprofit pro-
gram under public supervision by the lead agency as author-
ized in section 676(b)(9) of the Individuals With Disabilities
Education Act;
(D) as a member of the Armed Forces of the United States,
for service that qualifies for special pay under section 310 of
title 37, United States Code, as an area of hostilities;
(E) as a volunteer under the Peace Corps Act or a volun-
teer under the Domestic Volunteer Service Act of 1973;
P. 06
Sec. 465
HIGHER EDUCATION ACT OF 1965
264
(F) as a full-time law enforcement officer or corrections of-
ficer for service to local, State, or Federal law enforcement or
corrections agencies;
(G) as a full-time teacher of mathematics, science, foreign
languages, bilingual education, or any other field of expertise
where the State educational agency determines there is a
shortage of qualified teachers;
(H) as a full-time nurse or medical technician providing
health care services; or
(I) as a full-time employee of a public or private nonprofit
child or family service agency who is providing, or supervising
the provision of, services to high-risk children who are from
low-income communities and the families of such children.
For the purpose of this paragraph, the term "children with disabil-
ities" has the meaning set forth in section 602(a)(1) of the Individ-
uals with Disabilities Education Act.
(3)(A) The percent of a loan which shall be canceled under
paragraph (1) of this subsection is-
(i) in the case of service described in subparagraph (A),
(C), (F), (G), (H), or (I) of paragraph (2), at the rate of 15 per-
cent for the first or second year of such service, 20 percent for
the third or fourth year of such service, and 30 percent for the
fifth year of such service;
(ii) in the case of service described in subparagraph (B) of
paragraph (2), at the rate of 15 percent for each year of such
service;
(iii) in the case of service described in subparagraph (D) of
paragraph (2), not to exceed a total of 50 percent of such loan
at the rate of 12½ percent for each year of qualifying service;
or
(iv) in the case of service described in subparagraph (E) of
paragraph (2) at the rate of 15 percent for the first or second
year of such service and 20 percent for the third or fourth year
of such service.
(B) If a portion of a loan is canceled under this subsection for
any year, the entire amount of interest on such loan which accrues
for such year shall be canceled.
(C) Nothing in this subsection shall be construed to authorize
refunding of any repayment of a loan.
(4) For the purpose of this subsection, the term "year" where
applied to service as a teacher means academic year as defined by
the Secretary.
(5) The amount of a loan, and interest on a loan, which is can-
celed under this section shall not be considered income for purposes
of the Internal Revenue Code of 1986.
(6) No borrower may, for the same volunteer service, receive a
benefit under both this section and subtitle D of title I of the Na-
tional and Community Service Act of 1990 (42 U.S.C. 12571 et
seq.).
(b) REIMBURSEMENT FOR CANCELLATION-The Secretary shall
pay to each institution for each fiscal year an amount equal to the
aggregate of the amounts of loans from its student loan fund which
are canceled pursuant to this section for such year, minus an
amount equal to the aggregate of the amounts of any such loans
APR-23-97 WED 08:21
P. 07
265
HIGHER EDUCATION ACT OF 1965
Sec. 466
so canceled which were made from Federal capital contributions to
its student loan fund provided by the Secretary under section 468.
None of the funds appropriated pursuant to section 461(b) shall be
available for payments pursuant to this subsection.
(c) SPECIAL RULES.-
(1) LIST.-If the list of schools in which a teacher may per-
form service pursuant to subsection (a)(2)(A) is not available
before May 1 of any year, the Secretary may use the list for
the year preceding the year for which the determination is
made to make such service determination.
(2) CONTINUING ELIGIBILITY-Any teacher who performs
service in a school which-
(A) meets the requirements of subsection (a)(2)(A) in
any year, and
(B) in a subsequent year fails to meet the require-
ments of such subsection,
may continue to teach in such school and shall be eligible for
loan cancellation pursuant to subsection (a)(1) such subsequent
years.
(20 U.S.C. 1087ee) Enacted June 23, 1972. P.L. 92-318. sec. 137(b), 86 Stat. 277,
278; amended Nov. 1, 1978, P.L. 95-561, sec. 1323, 92 Stat. 2363; amended October
3, 1980, P.L. 96-374, secs. 442(b)(6), 448 (d), (e), 1391, 94 Stat. 1440, 1443, 1503;
amended October 17, 1986, P.L. 99-498, sec. 405(a), 100 Stat. 1451; amended June
3, 1987. P.L. 100-50, sec. 13(j), 101 Stat. 349; amended July 18, 1988, P.L. 100-
369, sec. 7(c), 102 Stat. 837; amended November 29, 1990, P.L. 101-647, sec. 2101(a)
and (b), 104 Stat 4856; amended October 7, 1991, PL. 102-119, sec. 26(h), 105 Stat.
607; amended July 23, 1992, P.L. 102-325, sec. 465(a)-(c), 106 Stat 582; amended
September 21, 1993. P.L. 103-82, sec. 102(c)(3), 107 Stat 831; amended December
20, 1993, P.L. 103-208, sec. 2(0(12)-(14), (k)(7), (m), 107 Stat. 2471, 2486.
SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.
(a) IN GENERAL-After September 30, 1996, and not later than
March 31, 1997, there shall be a capital distribution of the balance
of the student loan fund established under this part by each insti-
tution of higher education as follows:
(1) The Secretary shall first be paid an amount which
bears the same ratio to the balance in such fund at the close
of September 30, 1996, as the total amount of the Federal cap-
ital contributions to such fund by the Secretary under this part
bears to the sum of such Federal contributions and the institu-
tion's capital contributions to such fund.
(2) The remainder of such balance shall be paid to the in-
stitution.
(b) DISTRIBUTION OF LATE COLLECTIONS.-After March 31,
2005, each institution with which the Secretary has made an agree-
ment under this part, shall pay to the Secretary the same propor-
tionate share of amounts received by this institution after Septem-
ber 30, 1996, in payment of principal and interest on student loans
made from the student loan fund established pursuant to such
agreement (which amount shall be determined after deduction of
any costs of litigation incurred in collection of the principal or in-
terest on loans from the fund and not already reimbursed from the
fund or from such payments of principal or interest), as was deter-
mined for the Secretary under subsection (a).
(c) DISTRIBUTION OF EXCESS CAPITAL-(1) Upon a finding by
the institution or the Secretary prior to October 1, 1997, that the
defer. v2
Page 1
SUBSIDIZED DEFERMENTS FOR SERVICE
Proposal:
Any college student who took a year off to do service would be eligible to
have the Federal government pay all interest on their Federal student loans for that
period.
Pricing Assumptions
1.
Students performing community service who have subsidized loans, available only to
needy students, are now eligible to receive Federal interest payments during such
deferments, on the basis of economic hardship. Additional costs would occur only for
students with unsubsidized Stafford loans, available to all borrowers.
2.
Historically, in 2- and 4-yr. institutions, 7% of both subsidized and unsubsidized
borrowers entering repayment request a deferment. Of that group requesting a deferment,
3% request a service-related deferment.
3
The Education Department estimates that covering the one-year interest costs of
borrowers with unsubsidized loans (or of the portion of their loans that are unsubsidized)
would cost $7 milion over five years. This estimate does not include any inducement
effect of the added Federal subsidy.
4.
Studies of somewhat analogous loan forgiveness programs suggest that there is no
significant inducement effect in these kinds of programs. However, if we were to assume
a significant inducement factor, doubling the number of student borrowers who would
choose to perform a year of service, then the five year costs would be $14 million.
March 25, 1997
The Reverend Tony Campolo
Eastern College
10 Fairview Drive
St. Davids, Pennsylvania 19087-3696
Dear Tony:
Thanks SO much for your kind words on Nightline and for
your recent letter. I also want to thank you again for
your participation in the National Prayer Service on
Inauguration Day -- your words were SO uplifting and
meant a lot to me.
I deeply appreciate your support and enthusiasm for the
Presidents' Summit for America's Future. Your new program
for involving college men and women in service to poor urban
communities sounds very promising. You'll be pleased to know
that the federal government can help those who serve as full-
time volunteers without pay. I've asked the Department of
Education to provide you with information on how students
who take very low income jobs after school can qualify for
economic hardship deferments of up to three years on their
student loans.
Thanks, too, for sending the prayers by George Eliot. I
enjoyed reading them, and they are, indeed, quite appropriate.
As always, I am grateful for your wise, spiritual counsel.
Talk to you soon.
Sincerely,
BC/LIJ/RLM/RSM/RLM/JAD/JAD/emu-lynn-lynn-jfc-ckb-efr-efr-emu-
emu-ws-emu-ech-efr-lynn
(Corres. #3415264)
(3.campolo.t)
CC: Secretary Riley, Dept. of Education, w/copy of inc.
CC: J.Dorskind/TDS 94
CC: Mike Cohen, 218, w/copy of inc.
CC: Bob Shireman, 8236, w/copy of inc.
CC: Diana Fortuna, 224, w/copy of inc.
CC: Scott Michaud, 96 OEOB
Xeroxed copy of personally signed original to NH through Todd
Stern
CLEAR THRU TODD STERN
02/18/97
13:28
*6103411722
EAPE
0
002
February 18, 1997
1 5
President Bill Clinton
The White House
West Wing
Washington, DC 20500-2000
gup
Dear Mr. President:
Please accept my gratitude for the incredible opportunity that you provided for me when you
asked me to share in the National Prayer Service on the day of the Inauguration. It was one of
the highlights of my life. It was a privilege to share the Gospel not only with you. but with
millions of Americans who participated in that special service via television.
I also wanted to strongly commend you for calling the Summit On Voluntarism. Needless to say,
you not only have my support but the support of Americans all across the nation. The response
everywhere I go is a response of enthusiasm. The outpouring of commitments 10 heed your call
for public service is truly amazing. I am convinced that the initiative for calling this conference
came from a power that is even higher than the White House.
I met with Harris Wofford this past Sunday evening to discuss ways in which the religious and
educational sectors of America could optimize this opportunity to challenge their people to serve
the poor and the needy. Harris was especially enthusiastic about a new coalition of
organizations which I have helped to call logether with the expressed purpose of getting college
students to serve poor urban neighborhoods through church-based programs. This coalition
includes the following organizations:
1. Intervarsity Christian Fellowship
2. The National Association of Evangelicals
3. The Coalition for Christian Colleges and Universities
3. The African-American Ten Point Coalition
4. The Hispanic Clergy
5. The Youth Ministries of Mainline Denominations
6. Compassion International
We will be asking college-aged men and women 10 take off school for a year in order 10 serve
in church-based ministries in urban neighbarhoods. We expect to recruit as many as ten
thousand young people who would be willing to take off a year either between their sophomore
and junior years of education or following graduation. We have already secured sufficient
financial resources to make this program a success. The response to the invitation to serve gives
us certainty that the human resources to make this program a success will be available.
Our plan is to put together teams of five collegians and place them in urban churches where they
will do door to door visitation. They will speak to and listen to community people, initiate after-
school programs for tutoring and for cultural enrichment and work in neighborhood public
schools as volunteers. One of their primary commitments will be to get parents involved in the
education of their children. The name of this movement is called Mission Year.
EASTERN
COLLEGE
10
Fairview
Drive
Sains Davids. Pennsylvania 19087-3696
Telephone 610-341-5800
001
13:25
a
EAPE
President Clinton
Page 2
There is one great need that must be met to facilitate this huge outpouring of volunteers. There
must be some means devised whereby paybacks on student loans can be deferred for a year. We
know we can get thousands of young people to commit themselves, but they will find themselves
unable to live out that commitment unless such deferments are arranged. Immediately upon
stopping their education in order 10 volunteer, they would be expected to start payment on student
loans given our present system. Most of them would not be in a position to do so if they are
serving without pay - which will be the case. Is there something that you can do? Can
legislation be initiated that could make the needed deferments a possibility?
On a more spiritual note, I came across a couple of prayers written by George Eliot. As I read
them, J thought that these would be prayers that would be meaningful to you.
AT HIS FEET
As soon as we lay ourselves entirely at His feet, we have enough light
given us to guide our own steps; as the foot-soldier, who hears nothing of
the councils that determine the course of the great battle he is in, hears
plainly enough the word of command which he must himself obey.
A RIVER
You are seeking some good other than the law you are bound to obey. But
how will you find good? It is not a thing of choice; it is a river that flows
from the foot of the Invisible Throne, and flows by the path of obedience.
I say again, man cannot choose his duties. You may choose to forsake
your duties, and choose not to have the SOTTOW they bring. But you will
go forth, and what will you find? Sorrow without duty - - bitter herbs, and
no bread with them.
One last thing! You must know that people all across America are praying for you, especially
in these difficult days. But I want to remind you of the most important responsibility that you
have as the President, and that is 10 pray for all of us. People in leadership must not only lead,
they must pray for those that they lead. God expects those to whom He gives authority to pray
for those over whom that authority is exercised Pray for us Mr. President even as we pray for
you.
Your friend,
TONY CAMPOLO
TC:dmor
JUL-22-1997 13:37 TO:ROBERT SHIREMAN
FROM:DADE, J.
P. 1/5
SPECIAL
Total Pages: 5
LRM ID: CJB77
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001
Friday, July 18, 1997
LEGISLATIVE REFERRAL MEMORANDUM
TO:
Legislative Liaison Officer See Distribution below
FROM:
huth. Forssver
Janet R. Forsgren (fort Assistant Director for Legislative Reference
OMB CONTACT:
Constance J. Bowers
PHONE: (202)395-3803 FAX: (202)395-6148
SUBJECT:
EDUCATION Draft Bill on Higher Education Act Reauthorization Title X
FIFSE (Fund for the Improvement of Postsecondary Education)
DEADLINE:
noon Friday, July 25, 1997
In accordance with OMB Circular A-19, OMB requests the views of your agency on the above
subject before advising on its relationship to the program of the President. Please advise US if this
item will affect direct spending or receipts for purposes of the "Pay-As-You-Go" provisions of Title
XIII of the Omnibus Budget Reconciliation Act of 1990.
COMMENTS: The Higher Education Act Reauthorization legislation will be reviewed and cleared in
separate parts. ED will transmit formally a comprehensive bill later.
DISTRIBUTION LIST
AGENCIES:
76-National Economic Council - Sonyia Matthews - (202) 45/6-6630
EOP:
Kathryn B. Stack
Patricia A. Smith
Timothy A. Rosado
Barry White
Daniel J. Chenok
Robert M. Shireman
Michael Cohen
William R. Kincaid
Rosalyn J. Rettman
Edward M. Rea
James C. Murr
Janet R. Forsgren
Lisa M. Kountoupes
JUL-22-1997 13:37 TO:ROBERT SHIREMAN
FROM:DADE, J.
P.2/5
LRM ID: CJB77
SUBJECT: EDUCATION Draft Bill on Higher Education Act Reauthorization
Title X FIFSE (Fund for the Improvement of Postsecondary Education)
RESPONSE TO
LEGISLATIVE REFERRAL
MEMORANDUM
If your response to this request for views is short (e.g., concur/no comment), we prefer that you respond by
e-mail or by faxing us this response sheet. If the response is short and you prefer 10 call, please call the
branch-wide line shown below (NOT the analyst's line) to loave 8 message with 8 legislative assistant.
You may also respond by:
(1) calling the analyst/attorney's direct line (you will be connected to voice mail if the analyst does not
answer); or
(2) sending us a memo or letter
Please include the LRM number shown above, and the subject shown below.
TO:
Constance J. Bowers Phone: 395-3803 Fax: 395-6148
Office of Management and Budget
Branch-Wide Line (to reach legislative assistant): 395-7362
FROM:
(Date)
(Name)
(Agency)
(Tolephone)
The following is the reponse of our agency to your request for views on the above-captioned subject:
Concur
No Objection
No Comment
See proposed edits on pages
Other:
FAX RETURN of
pages, attached to this reponse sheet
JUL-22-1997 13:37 TO:ROBERT SHIPEMAN
FROM:DADE, J.
P. 3/5
T-X (FIPSE)
DRAFT 7/18/97
SEC. ... (a) Section 1001(a) is amended by striking out "institutions of higher education
or combinations of such institutions and" and inserting in lieu thereof 'institutions of higher
education, combinations of such institutions, and".
(b) Section 1003(a) is amended by striking out "5 technical employees" and inserting in
lieu thereof"7 technical employees".
(c) Section 1004 is amended to read as follows:
"AUTHORIZATION OF APPROPRIATIONS
"SEC. 1004. (a) IN GENERAL.- There are authorized to be appropriated such sums as
may be necessary for each of fiscal years 1998 through 2002 to carry out this subpart, except for
subsection (b).
"(b) PLANNING GRANTS There are authorized to be appropriated such sums as may
be necessary for each of fiscal years 1998 through 2002 to carry out section 1001(b).".
(d) Section 1011 is amended--
(1) in subsection (c), by striking out paragraphs (1) through (3) and inserting in
lieu thereof the following:
"(1) international cooperation and student exchange among postsecondary
educational institutions;
"(2) institutional restructuring to improve learning and promote cost efficiencies;
and
"(3) evaluation and dissemination of model programs."; and
(2) by amending subsection (d) to read as follows:
"(d) AUTHORIZATION OF APPROPRIATIONS There are authorized to be
appropriated such sums as may be necessary for each of fiscal years 1998 through 2002 to carry
out this subpart.".
###
1
18
JUL-22-1997 13:37 TO:ROBERT SHIREMAN
FROM:DADE. J.
P. 4/5
Page 11
FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION (FIPSE)
FIPSE, established by the Higher Education Act Amendments of 1972, awards
grants "to improve postsecondary education opportunities by encouraging the
reform, innovation, and improvement of postsecondary education, and providing
equal educational opportunity for all." Total funding for FIPSC equalled $18 million
in FY 97.
FIPSE grant compatitions include:
U
The Comprehensive Program, FIPSE's primary grant competition, which
annually accounts for over eighty percent of its program budget.
Smaller, "special focus" competitions in areas of particular national need are
also conducted each year. In recent years these competitions have
addressed such topics as dissemination of proven postsecondary reforms,
and development of cooperative postsecondary programs between
institutions in the United States and those in the Mexico, Canada, and
European Union.
The Comprehensive Program:
o
Is open to all public and private nonprofit postsecondary institutions, from
two your Institutions to rosoarch universities. In FY 97, 2156 opplications
were submitted.
o
Supports demonstration projects addressing a wide range of postsecondary
improvements, access to postsecondary education for all types of students,
teaching and learning. Most grant awards are in the areas of access and
retention, curriculum reform, educational technology, school-college
collaboration, school-to-work programs, international education, faculty
development, and graduate and professional education.
c
Is very competitive: of the approximately 2000 applications submitted each
year, only about 75 receive FIPSE grants, a funding ratio of less than four
percent.
0
Requires each funded project to engage in systematic evaluation of its
outcomes, and to disseminate its results to the postsecondary community.
0
Includes evaluation of outcomes that leads to institutionalization of
successful projects; 0 large majority of FIPSE projects are continued after
FIPSE funding expires.
In recognition of this program's outstanding success over the past 25 years, both
JUL-22-1997 13:37 TO:ROBERT SHIREMAN
FROM:DADE, J.
P.5/5
Page 21
the Department of Education and the higher education community have
recommended that FIPSE be reauthorized without substantial change in its statute.
Three minor amendments are proposed here to: 1) clarify the range of eligible
grantees; 2) provide for increased staff flexibility: and 3) encourage applicants to
address the need to restructure Institutions to improve learning and promote cost
efficiencies.
DRAFT- 7/15/97
JUL-21-1997 09:31 TO:76 - NEC
FROM:DADE, J.
P. 1/9
SPECIAL
Total Pages: 9
LRM ID: CJB75
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001
Friday, July 18, 1997
LEGISLATIVE REFERRAL MEMORANDUM
TO:
Legislative Liaison Officer - See Distribution below
FROM:
Janet R. Forsgren (for) Assistant Director for Legislative Reference
OMB CONTACT:
Constance J. Bowers
PHONE: (202)395-3803 FAX: (202)395-6148
SUBJECT:
EDUCATION Draft Bill on Higher Education Act Reauthorization Title VI --
International Programs
DEADLINE:
5:00 p.m. Wednesday, July 23, 1997
In accordance with OMB Circular A-19, OMB requests the views of your agency on the above
subject before advising on its relationship to the program of the President. Please advise us If this
item will affect direct spending or receipts for purposes of the "Pay-As-You-Go" provisions of Title
XIII of the Omnibus Budget Reconciliation Act of 1990.
COMMENTS: The HEA Reauthorization legislation will be reviewed and cleared in separate parts.
ED will consolidate the entire bill for formal transmittal later.
DISTRIBUTION LIST
AGENCIES:
114-STATE Julia C. Norton . (202) 647-4463
8-US Agency for International Development Robert M. Lester - (202) 647-8308
61-JUSTICE Andrew Fois . (202) 514-2141
76-National Economic Council Sonyia Matthews . (202) 45/6-6630
EOP:
Kathryn B. Stack
Timothy A. Rosado
Patricia A. Smith
Barry White
Robert M. Shireman
Michael Cohen
William R. Kincaid
Bruce K. Sasser
Rosalyn J. Rettman
Daniel J. Chenok
Edward M. Rea
James C. Murr
Janet R. Forsgren
Lisa M. Kountoupes
JUL-21-1997 09:31 TO:76 - NEC
FROM:DADE, J.
P.2/9
LRM ID: CJB75
SUBJECT: EDUCATION Draft Bill on Higher Education Act Reauthorization -
Title VI -- International Programs
RESPONSE TO
LEGISLATIVE REFERRAL
MEMORANDUM
If your response to this request for views is short (e.g., concur/no comment), we prefer that you respond by
e-mail or by faxing US this response sheet. If the response is short and you prefer to call, please call the
branch-wide line shown below (NOT the analyst's line) to leave a message with a legislative assistant.
You may also respond by:
(1) calling the analyst/attorney's direct line (you will be connected to voice mail If the analyst does not
answer); or
(2) sending us a memo or letter
Please Include the LRM number shown above, and the subject shown below.
TO:
Constance J. Bowers Phone: 395-3803 Fax: 395-6148
Office of Management and Budget
Branch-Wide Line (to reach legislative assistant): 395-7362
FROM:
(Date)
(Name)
(Agency)
(Telephone)
The following is the reponse of our agency to your request for views on the above-captioned subject:
Concur
No Objection
No Comment
See proposed edits on pages
Other:
FAX RETURN of
pages, attached to this reponse sheet
JUL-21-1997 09:31 TO:76 - NEC
FROM: DADE, J.
P. 3/9
T - VI (INTERNATIONAL PROGRAMS)
DRAFT 7/18/97
SEC. (a) Section 603(a) of the Act is amended--
(1) in the first sentence, by striking out the period at the end thereof and
inserting in lieu thereof "at all levels of education in the United States.";
(2) in the second sentence, by inserting "shall focus on the languages of a
specific world area, shall be conducted in collaboration with foreign language educators and
professional associations, and" after "centers";
(3) in paragraph (1), by inserting "and dissemination" after "the conduct";
(4) in paragraph (2), by-
(A) inserting "and dissemination" after "the development"; and
(B) inserting "and instructional delivery systems" after "teaching
materials";
(5) in paragraph (3), by striking out "and application of performance
testing" and inserting in lieu thereof a comma and "application, and dissemination of performance
testing instruments";
(6) in paragraph (5), by inserting "and dissemination to others in the
foreign language field" before "of instructional materials"; and
(7) by striking out paragraph (6) and inserting the following new
paragraphs:
"(6) the development and coordination of networking frameworks and
activities (such as Internet listservs and bulletin boards, newsletters, conferences, and discussion
groups) to provide foreign language teachers with ongoing professional development
opportunities; and
"(7) the conduct of overseas or domestic intensive summer language
institutes designed to meet the needs for intensive foreign language training by students or to
provide professional development of, and improve language instruction through pre-service and in
service training for, foreign language teachers.
(b) Section 604 of the Act is amended--
(1) in the section heading by striking out "UNDERGRADUATE
I
2
JUL-21-1997 09:31 TO:76 - NEC
FROM:DADE, J.
P. 4/9
INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS" and inserting in
lieu "UNDERGRADUATE PROGRAMS IN INTERNATIONAL STUDIES";
(2) in subsection (a)-
(A) by amending the subsection heading to read as follows:
"(a) Incentive for the Crestion of New Programs and the Strengthening of
Existing Programs in Undergraduate International Studies and Foreign Languages and the
Internationalization of Undergraduate Education.--";
(B) by amending paragraphs (1) and (2) to read as follows:
"(1) Authority -The Secretary is authorized to make grants to institutions of
higher education, combinations of such institutions, or partnerships between nonprofit educational
organizations and such institutions, to assist such institutions or combinations in planning,
developing, and carrying out programs to improve undergraduate instruction in international
studies and foreign languages. Such grants shall be awarded for the purpose of seeking to create
new programs, or to strengthen existing programs, in undergraduate area studies, foreign
languages, and other international fields.
"(2) Federal Share and Use of Funds-Grants under this subsection may be used to
pay not more than 50 percent of the cost of projects and activities that are an integral part of such
a program, such as--
"(A) planning for the development and expansion of programs in
undergraduate international studies and foreign languages and the internationalization of
undergraduate education;
"(B) teaching, research, curriculum development, and other related
activities;
"(C) training of faculty members in foreign countries;
"(D) expansion of existing and development of new opportunities for
learning foreign languages, including the less commonly taught languages;
"(E) programs under which foreign teachers and scholars may visit
institutions as visiting faculty;
"(F) international education programs designed to develop or enhance
linkages between two- and four-year institutions of higher education, or baccalaureate and post-
baccalaureate programs or institutions;
2
3
JUL-21-1997 09:31 TO:76 - NEC
FROM:DADE, J.
P. 5/9
"(G) the development of an international dimension in preservice and
inservice teacher training;
"(H) the development of undergraduate educational programs in locations
abroad where such opportunities are not otherwise available and which provide courses that are
closely related to on-campus foreign language and international curricula;
"(I) the integration of new and continuing education abroad opportunities
for undergraduate students into curricula of specific degree programs,
"(5) the development of model programs to enrich or enhance the
effectiveness of educational programs abroad, including pre-departure and post-return programs,
and the integration of educational programs abroad into the curriculum of the home institution;
"(K) the expansion of library and teaching resources;
"(L) the use of innovative technology to increase access to international
education programs;
"(M) the development of programs designed to integrate professional and
technical education with are a studies, foreign languages, and other international fields;
"(N) the establishment of linkages overseas with institutions of higher
education and organizations that contribute to the educational objectives of this subsection;
"(O) the conduct of summer institutes in foreign area and other
international fields to provide faculty and curriculum development, including the integration of
professional and technical education with foreign area and other International studies, and to
provide foreign area and other international knowledge or skills to government personnel or
private sector professionals in international activities; and
"(P) the development of partnerships between institutions of higher
education and the private sector, government, and elementary and secondary education
institutions to enhance international knowledge and skills.";
(C) in paragraph (3), by striking "and private" and inserting a comma and
"private sector corporation or foundation";
(D) after paragraph (4), by adding the following new paragraphs:
"(5) Grant Conditions.-(A) Grants under this subsection shall be made on such
terms and conditions as the Secretary determines to be necessary to carry out the objectives of
this subsection.
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FROM: DADE, J.
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"(B) An applicant for a grant under this subsection shall include in its
application--
"(i) evidence that the applicant, has conducted extensive planning
prior to submitting its application;
"(ii) an assurance that the faculty and administrators of all relevant
departments and programs within the applicant institutions are involved in ongoing collaboration
with regard to achieving the stated objectives of the application;
"(iii) an assurance that students at the applicant institutions, as
appropriate, will have equal access to, and derive benefits from, the program assisted under this
subsection; and
"(iv) an assurance that each institution of higher education will use
the Federal assistance provided under this subsection to supplement and not supplant institutional
funds and activities provided by the institution prior to the receipt of Federal funds.
"(6) Evaluation.--The Secretary may establish requirements for program
evaluations and require recipients to submit annual reports that evaluate the progress and
performance of students in programs under this subsection."; and
(3) by striking out subsection (b) and redesignating subsection (c) as subsection
(b).
(c) Sections 605, 607, and 632 of the Act are repealed and sections 606, 608, 609, and
610 are redesignated as 605, 606, 607, and 608 respectively.
(d) Section 610A is redesignated as section 609 and amended to read as follows:
"AUTHORIZATION OF APPROPRIATIONS
"SEC. 609. There are authorized to be appropriated such sums as may be necessary for each of
fiscal years 1998 through 2002 to carry out this part".
(e) Section 614 is amended to read as follows:
"AUTHORIZATION OF APPROPRIATIONS
"SEC. 614. There are authorized to be appropriated such sums as may be necessary for each of
fiscal years 1998 through 2002 to carry out this part".
(f) Section 627 is amended to read as follows:
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FROM:DADE, J.
P. 7/9
"AUTHORIZATION OF APPROPRIATIONS
"SEC. 627. There are authorized to be appropriated such sums as may be necessary for each of
fiscal years 1998 through 2002 to carry out this part".
(g) Part D of title VI is amended by adding at the end thereof a new section 633 to read
as follows:
"EVALUATIONS
"SEC. 633. (a) In General.--For the purpose of improving the operation of programs and
projects assisted under this title and section 102(b)(6) under the Mutual Educational and Cultural
Exchange Act, the Secretary may make grants to or enter into contracts with institutions of higher
education and other public or private institutions or organizations to evaluate the effectiveness of
the programs assisted under this title and the programs assisted under section 102(b)(6) of the
Mutual Educational and Cultural Exchange Act.
"(b) Contents.- The evaluations described in subsection (a) shall design, develop and
implement both quantifiable as well as quality outcome indicators by which to measure the
success of, and potential improvements in, the programs funded under this title and section
102(b)(6) of the Mutual Educational and Cultural Exchange Act. The evaluations shall measure
the success of such programs and identify organizational and program practices particularly
effective in meeting the purposes of this title.
"(c) Reservation of Funds--The Secretary may reserve not to exceed 2 percent of the
amount appropriated under this title for any fiscal year to carry out this section whenever the
amount made available under this title for each program authorized by this title for a fiscal year is
not less than the amount available for each such program for fiscal year 1998.".
###
S
JUL-21-1997 09:31 TO:76 - NEC
FROM:DADE, J.
P.8/9
INTERNATIONAL EDUCATION PROGRAMS
The Department funds a variety of international education programs to help meet the nation's
need for expertise in foreign languages, area studies and international studies, and for & more
internationally literate citizensy.
Nine programs are currently funded under the HEA and provide a coordinated approach
to strengthening international education: National Resource Centers, Foreign Language
and Area Studies Fellowships, Language Resource Centers, International Research and
Studies, Undergraduate International Studies and Foreign Languages, Centers for
International Business Education, Business and International Education, American
Overscas Research Centers, and the Institute for International Public Policy.
These programs have helped to create high quality graduate and undergraduate
international programs; encouraged outreach to the pre-collegiate level; and helped the
business community meet the demands of an increasingly competitive global
marketplace.
Both the Department and the community agree that these programs are working well and
should be continued with only minor changes.
We are proposing the following minor changes to the legislation to eliminate unfunded programs.
to strengthen outreach to K-12, and to encourage greater use of technology, and to include a new
section on evaluation.
Eliminate Sec. 605 Intensive Summer Language Institutes and Sec. 607 Foreign
Periodicals Program Sec.607 has not been funded since 1993 and Sec.605 has never
been funded. Our recommendation to eliminate these two sections is consistent with the
Department's policy to eliminate unfunded programs.
Eliminate Sec. 632 Preservation of Pre-1992 Programs. The elimination of this uigger
provision gives the Department greater flexibility to support programs that best meet the
changing needs in international education. Furthermore, Sec. 632 refers specifically to
the 1992 amendments to HEA and is outdated.
Eliminate Sec. 604(b) Programs of Demonstrated Excellence. This subsection of Sec.
604 Undergraduate International Studies and Foreign Language Programs has never
been funded. We are proposing to eliminate it and incorporate key provisions of this
program in subsection (a).
Revise Sec. 603 Language Resource Centers for the following purposes:
To strengthen their role as resources to improve foreign language teaching and
learning in K-12;
To focus each Center on a specific world area and carry out activities in
colleboration with foreign language educators and professional associations;
JUL-21-1997 09:31 TO:76 - NEC
FROM:DADE, J.
P.9/9
To make dissemination an assential component of cach Center activity:
To encourage utilization of the advances in educational technology; and
To authorize domestic and overseas intensive summer language programs.
Add a new section on evaluation. Consistent with the increasing emphasis on
performance measures and program results, we are proposing to add s new section on
evaluation of the domestic and overseas international education programs.. However, we
are recommending that no funds be spent for this purpose until the amount available to
each program is not less than the amount available for fiscal year 1998.
DRAFT 7/16/97
8
JUL-21-1997 10:54 TO:ROBERT SHIREMAN
FROM:DADE, J.
P. 1/12
SPECIAL
Total Pages: 12
LRM ID: CJB76
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001
Friday, July 18, 1997
LEGISLATIVE REFERRAL MEMORANDUM
TO:
Legislative Liaison Officer - See Distribution below
ant P. Fassnee
FROM:
TJanet R. Forsgren (for) Assistant Director for Legislative Reference
OMB CONTACT:
Constance J. Bowers
PHONE: (202)395-3803 FAX: (202)395-6148
SUBJECT:
EDUCATION Draft Bill on Higher Education Act Reauthorization - Title IX -
Graduate Education
DEADLINE:
10:00 a.m. Thursday, July 24, 1997
in accordance with OMB Circular A-19, OMB requests the views of your agency on the above
subject before advising on its relationship to the program of the President. Please advise US if this
item will affect direct spending or receipts for purposes of the "Pay-As-You-Go" provisions of Title
XIII of the Omnibus Budget Reconciliation Act of 1990.
COMMENTS: The HEA Reauthorization will be reviewed and cleared in separate parts. ED will
consolidate the entire bill for formal transmittal later.
DISTRIBUTION LIST
AGENCIES:
61-JUSTICE Andrew Fois . (202) 514-2141
76-National Economic Council - Sonyia Matthews (202) 45/6-6630
84-National Science Foundation Lawrence Rudolph . (703) 306-1060
75-National Endowment for the Arts - Richard Woodruff - (202) 682-5434
77-National Endowment for the Humanities - Ann Orr - (202) 606-8328
62-LABOR - Robert A. Shapiro - (202) 219-8201
EOP:
Kathryn B. Stack
Patricia A. Smith
Timothy A. Rosado
Barry White
Leslie S. Mustain
Robert M. Shireman
Michael Cohen
William R. Kincaid
Rosalyn J. Rettman
Daniel J. Chenok
Emily Bromberg
JUL-21-1997 10:54 TO:ROBERT SHIREMAN
FROM:DADE, J.
P.2/12
William P. Marshall
Robert G. Damus
Edward M. Rea
Lisa M. Kountoupes
James C. Murr
Janet R. Forsgren
JUL-21-1997 10:54 TO:ROBERT SHIREMAN
FROM:DADE, J.
P.3/12
LRM ID: CJB76
SUBJECT: EDUCATION Draft Bill on Higher Education Act Reauthorization -
Title IX - Graduate Education
RESPONSE TO
LEGISLATIVE REFERRAL
MEMORANDUM
If your response to this request for views is short (e.g., concur/no commont), we prefer that you respond by
e-mail or by faxing us this response sheet. If the response is short and you prefer 10 call, please call the
branch-wide line shown below (NOT the analyst's line) to leave 8 message with a legislative assistant.
You may also respond by:
(1) calling the analyst/attorney's direct line (you will be connected to voice mail if the analyst does not
answer): or
(2) sending us a memo or letter
Please include the LRM number shown above, and the subject shown below.
TO:
Constance J. Bowers Phone: 395-3803 Fax: 395-6148
Office of Management and Budget
Branch-Wide Line (to reach legislative assistant): 395-7362
FROM:
(Date)
(Name)
(Agency)
(Telephone)
The following is the reponse of our agency to your request for views on the above-ceptioned subject:
Concur
No Objection
No Comment
See proposed edits on pages
Other:
FAX RETURN of
pages, attached to this reponse sheet
JUL-21-1997 10:54 TO:ROBERT SHIREMAN
FROM:DADE, J.
P. 4/12
T-IX (GRADUATE FELLOWSHIP PROGRAM)
DRAFT 7/18/97
SEC. - Title IX of the Act is amended to read as follows--
"TITLE IX - NATIONAL NEED GRADUATE FELLOWSHIP PROGRAM
"FINDINGS; PURPOSE
"Sec. 901. (a) Findings-The Congress finds that:
"(1) It is incumbent on the Federal Government to support the cultural and
technological leadership and economic competitiveness of the United States and, to help meet this
goal, to improve and expand the graduate level teaching and research capacity of the United States.
"(2) In a variety of fields that are vital to the national interest there are insufficient
numbers of qualified faculty at institutions of higher education to meet the demand.
"(3) Providing equal opportunity in higher education for traditionally underrepresented
populations has been and remains an important Federal objective
"(4) Women are 52% of the total population of the United States and minorities are
24.5% of the total population (i.e., African-Americans are 11.13%, Hispanics are 9.34%,
Asian/Pacific Islanders are 3.39% and Native Americans are 0.65%). and individuals with disabilities
are 10% of the total population.
"(5) In 1994-1995, women earned 55% of the bachelors degrees, minorities earned
18.5% of the bachelors degrees (7.7% were earned by African-Americans, 4.8% were earned by
Hispanics, 5.4% were earned by Asian/Pacific Islanders, and 0.6% were earned by American
Indian/Alaskan Natives), and individuals with disabilities earned 4.4% of the bachelors degrees.
"(6) Women, minorities, and individuals with disabilities continue to be
underrepresented among students earning Doctoral degrees. Overall, in 1994-1995, women received
45% of doctoral degrees (earning 14% of the engineering Ph.Ds, 22% of the computer and
information sciences Ph.Ds, 23% of the mathematics Ph.Ds, and 33% of the business Ph.Ds) and
minorities received 16% of the doctoral degrees (8% were Asian, 5% were African-American, 3%
were Hispanic and 0.4% were Native American). Minorities earned 6% of the law and legal studies
Ph.Ds, 8% of the English language and literature/letters Ph.Ds, 11% of the philosophy Ph.Ds, and
13% of the communication Ph.Ds. Individuals with disabilities accounted for 4.5% of those receiving
doctoral degrees.
"(7) Women and minorities remain underrepresented in faculty positions at institutions
of higher education in the United States. For example, 37% of the total higher education faculty are
women, and 12.5% are minorities, of which 4.8% are Asian, 4.8% are African-American, 2.8% are
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Hispanic, and 0.5% are Native American
"(8) The most recent data shows that there are 1,673,000 Ph.D holders in the U.S.,
of whom 85.6% are white and 14.4% are minorities (including 3.9% who are African-American and
2.5% who are Hispanic), and 28.6% are women.
"(9) A diverse faculty enriches and enhances the educational experience for all students
and can increase minority enrollment as well as improve increased minority retention and graduation
from America's colleges and universities.
"(10) Specific action is needed at the Federal level to promote teaching and research
in academic fields that are determined to be areas of national need, as well as to enhance the stimulus
to achievement of all students in America's colleges and universities that is provided by the presence
of minorities, women, and individuals with disabilities in the higher education professorate.
"(b) Purpose -In order to promote high-quality, postsecondary teaching and research in areas
of national need, and to encourage women, minorities, and individuals with disabilities, to prepare for
postsecondary academic careers in fields in which they are, and have traditionally been,
underrepresented, it is the purpose of this title to provide assistance to eligible entities to establish
graduate fellowships to recruit and assist students of superior ability, especially those from
underrepresented groups.
"GRANTS
"Sec. 902. (a) Authority--Subject to section 908, the Secretary shall make grants in
accordance with the provisions of this title to eligible entities under section 903 to enable such entities
10 award graduate fellowships in designated areas of national need to eligible students.
"(b) Geographic Equity making grants under this title, the Secretary shall, to the extent
practicable, promote an equitable geographic distribution of awards.
"(c) Duration.-Grants made under this title shall be for a period of up to 3 years.
"(d) Minimum and Maximum Amounts -Each grant awarded under this title shall be in an
amount that is at least $125,000, but not more than $750,000, for any fiscal year,
"(e) Program Quality -The principal criterion for awarding grants under this title shall be the
relative quality of the graduate programs described in applications submitted under section 905.
"(f) Matching Requirement-(1)(A) To receive a grant under this section for any fiscal year,
an eligible entity shall contribute, from non-federal sources, toward the cost of carrying out the
graduate fellowship program for which the grant is awarded an amount that is at least 25 percent of
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FROM:DADE. J.
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the amount of the grant.
"(B) An eligible entity's contribution may be in cash or in kind, fairly
evaluated.
"(2) An eligible entity that makes institutional payments to individuals supported by
fellowships under section 906 for tuition and fees in amounts that exceed the institutional allowances
made by the Secretary under section 907(a) may count the excess of such payments toward the
amount the eligible entity is required to provide under paragraph (1).
"(g) Reallotment -If, during any fiscal year, the Secretary determines that a recipient of funds
under this title is unable to use all of the funds awarded to it, the Secretary may, on such dates as the
Secretary may fix, reallot the funds not needed to other recipients that the Secretary determines can
use such funds.
"ELIGIBILITY
"Sec. 903.(a) Eligibility--(1) The Secretary is authorized to award grants under section 902
to--
"(A) institutions of higher education on behalf of their academic departments
and programs, or other academic units, that offer programs of study and research leading to a
terminal postbaccalaureate degree in an area of national need as designated under section 904; and
"(B) those entities eligible under subparagraph (A) that submit B joint proposal
with one or more nondegree-granting institutions that have a formal arrangement with one or more
degree-granting institutions for support of doctoral dissertation research.
"(2) The nondegree-granting institutions described in paragraph (1) (B) must-
"(i) be described in section 501(c)(3) of the Internal Revenue Code of
1986, and exempt from tax under section 501(a) of such Code;
"(ii) be organized and operated substantially to conduct scientific and
cultural research and graduate training programs;
"(iii) not be privare foundations;
"(iv) have academic personnel for instruction and counseling who meet
the standards of the institution of higher education in which the students are enrolled; and
"(v) have necessary research resources not otherwise readily available
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FROM:DADE, J.
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to such students.
"(b) Special Rule--No entity shall be eligible for a grant under section 902 unless the
graduate program that is the subject of its application for assistance has been in existence for at least
4 years prior to the date the application is made.
"AREAS OF NATIONAL NEED
"SEC. 904. (a) Designation -After consultation with the National Science Foundation, the
National Academy of Sciences, the National Endowment for the Humanities, the National
Endowment for the Arts, the Department of Labor, and, as appropriate, other Federal and public and
private agencies and organizations, the Secretary shall, on a periodic basis, designate areas of national
need, such as the Arts, Humanities, Social Sciences, Life Sciences, or Physical Sciences.
"(b) Basis for Designation--The Secretary shall base such designations on--
"(1) the Nation's interest in supporting graduate study and research in specific
academic fields; and
"(2) the extent of other Federal and non-Federal support for graduate study and
research in such fields
"APPLICATIONS
"SEC. 905. (a) Authority-An eligible entity that desires to receive a grant under section 902
shall submit an application to the Secretary in such manner and form, and containing such information
and assurances, as the Secretary may reasonably require.
"(b) Contents of Applications-Each application shall--
"(1) describe--
"(A) the number, types, and amounts of the fellowships that the applicant
intends to offer under the grant;
"(B) the designated area or areas of national need the applicant intends to
address under the grant;
"(C) the academic program or programs of the applicant for which the grant
is sought, including its experience in training students who obtain academic positions at institutions
of higher education; and
"(D) the policies and procedures the applicant will use in awarding fellowships
4
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FROM:DADE, J.
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using funds under this title;
"(2) demonstrate the relevant academic program or programs' quality and outcomes
by means of performance-based criteria, including the applicant's performance in recruiting students,
training students, and placing students after completion of the course of study; and
"(3) provide assurances satisfactory to the Secretary that--
"(A) in awarding fellowships using funds under this title, the applicant shall
give priority to women, individuals from minority groups, and individuals with disabilities, in
designated areas of national need in which such individuals are, and have traditionally been,
underrepresented;
"(B) in the event that funds made available to an applicant under this title are
insufficient to provide the assistance due a student under the commitment entered into pursuant to
section 906(b)(1), the applicant will fulfill the commitment to the student from any funds available
to it;
"(C) the applicant will provide at least 1 year of supervised training in
instruction for students; and
"(D) Federal funds made available under this title for any fiscal year shall be
used to supplement and, to the extent practical, increase the funds that would otherwise be made
available for the purpose of this title, and in no case to supplant those funds.
"(c) Priority -In awarding grants under this title, the Secretary shall give priority to applicants
that demonstrate to the Secretary's satisfaction that they are preparing women, individuals from
minority groups, and individuals with disabilities, in the designated eres of national need in which such
individuals are, and have traditionally been, underrepresented in postsecondary academic careers.
"(d) Application Review Panels-To the extent possible, the Secretary shall use
geographically balanced review panels of nationally recognized scholars to review and rank
applications.
"FELLOWSHIPS
"SEC. 906. (a). Fellowships--(1) Recipients of funds under this title shall use such funds to
award fellowships in designated arcas of national need to eligible students who--
"(A) are entering their first year of graduate study or research in a designated
field;
"(B) are intending to pursue 8 doctoral degree in the designated field;
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"(C) have demonstrated excellence in their previous postsecondary programs
of study, and
"(D) plan postsecondary teaching or research careers.
"(2) Notwithstanding paragraph (1)(B), a recipient may award fellowships to students
pursuing a master's degree in those fields in which the master's degree is commonly accepted as the
appropriate degree for a tenure-track faculty position in that field at a baccalaureate, degree-granting
institution.
"(b) Stipends - Fellowship stipends awarded under this section shall--
"(1) be provided pursuant to a written commitment between the institutional recipient
of funds and the fellowship awardee; and
"(2) provide for support of the awardee through completion of the degree in the
awardee's field, not to exceed 3 years.
"(c) Amount of Stipends-The amount of 8 stipend to a fellowship awardee shall be set each
year at a level of support that is at least equal to that provided by the graduate fellowships awarded
by the National Science Foundation.
"(d) Special Rule-No commitment under subsection (b)(1) shall be made 10 a fellowship
awardee under this section unless the recipient of funds under this title has determined that adequate
funds, either from the amounts received or anticipated under this title or from other institutional
funds, are available to fulfill such commitment.
"(e) Continuation of Fellowships -No student shall continue to receive a fellowship stipend
under this title if he or she is-
"(1) not maintaining satisfactory progress in study or research in the field in which
such fellowship was awarded;
"(2) engaged in less than full-time study or research in the field in which such
fellowship was awarded; or
"(3) is engaged in gainful employment, other than employment involved in teaching,
research, or similar activities determined by the institution to be in support of the student's progress
towards a degree.
"INSTITUTIONAL ALLOWANCES
SEC. 907. (a) Institutional Payments-(1) In addition to the fellowship stipends paid to
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students under this title, the Secretary shall pay to the eligible entity for each individual awarded 8
fellowship under this title at such institution, an institutional allowance.
"(2) Except as provided in paragraph (3), such allowance shall be--
"(A) $10,000 for the academic year 1997-1998; and
"(B) $10,000 for each succeeding academic year, adjusted annually for
inflation as determined by the Department of Labor's Consumer Price Index for the previous calendar
year.
"(3) The institutional allowance paid under paragraph (1) shall be reduced by the
amount the institution charges and collects from & fellowship awardee for tuition and other fees as
part of the recipient's instructional program.
"(b) Use for Overhead Prohibited -Funds made available under this section shall not be used
for the general operational overhead of the academic department or program.
"CONTINUATION OF INSTITUTIONAL AWARDS UNDER PREVIOUS PROGRAMS
"SEC. 908. Before making new awards under this title for any fiscal year, the Secretary shall,
as appropriate, make continuation awards to recipients under this title, including recipients of awards
under parts B, C, and D of this title as it was in effect prior 10 the enactment of Higher Education
Act Amendments Act of 1997.
"AUTHORIZATION OF APPROPRIATIONS
"SEC. 909. There are authorized to be appropriated such sums as may be necessary for each
of fiscal years 1998 through 2002 to carry out this title.
###
7
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FROM:DADE. J.
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NATIONAL NEED GRADUATE FELLOWSHIP PROGRAM
Purpose
The purpose of the National Need Graduate Fellowship Program (NNGFP) is to promote high-
quality. graduate-level teaching and research in areas of national need and to encourage women,
minorities, and individuals with disabilities to prepare for postscoondary academic careers in such
fields in which they are, and have traditionally been, underrepresented. For example, women
earned 22% of all doctorates awarded in the physical sciences; African American students carned
2.9% of all doctorates swarded in the arts and humanities: and Hispanic students earned 3.0% of
all doctorates awarded in the life sciences (1995 statistics).
The NNGFP continues the Department's efforts over the past four years to consolidate the
existing graduate education programs (Javits, Herris, GAANN). The single program streamlines
and simplifies program management for both grantees and the Department, while maintaining key
elements of the previously existing graduate education programs.
Proposal
National Need: The Secretary will designate areas of national need such as the arts,
humanities, social sciences, life sciences and physical sciences. The Department will
consult with the National Science Foundation, the National Endowment for the Arts, the
National Endowment for the Humanities, the National Academy of Sciences and other
appropriate agencies and organizations to determine national need. The determination of
national need will consider relevant statistics and the extent to which other Federal and
non-Federal programs support postbaccalurcate study in these arcas.
Underrepresented Populations: Priority will be given to applicants that indicate strong
past and continuing performance in serving populations traditionally underrepresented.
including women, minorities. and individuals with disabilities in the academic program for
which followships are sought.
Academic and Research Careers: The Department will evaluate applications based on
the applicant's previous experience in training students who obtain teaching and research
positions at institutions of higher education.
Institutional Commitment
Institutional-Based Awards: Grants will be awarded to institutions rather than
individuals Although this does not allow for portability, an institutional fellowship is a
vehicle for strengthening institutional capacity. In addition, an institutional award will
reduce the administrative burden on the institution and the Department.
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PPOM:DADE, J.
P.12/12
Institutional match: There will be an institutional match based on the GAANN 25%
model . the grantee will provide from non-Federal funds, an amount equal to at least 25%
of the amount of Federal funds received.
Duration of grants: Grants would provide for three years of support or until completion
of the degree, whichever is less. Students must demonstrate academic progress to
continue to receive fellowship funding. A 25% match from the institutions will ensure a
faculty, departmental, and institutional commitment.
Supervised training: The academic department will be required to provide at least one
year of supervised training in instruction for students.
Maximum Stipend: The stipend for individuals will be set according 10 the NSF-stipend and will
no longer he needs-based The maximum institutional allowance will be a $10,000 1997-98 base
adjusted annually for inflation as determined by the Department of Labor.
Continuation Grants: Budgeted funds will Include B get-aside to fund continuation grants for
prior awards under GAANN, Javits, and Harris prior to funding new awards. Those grants will bo
funded under the original terms of award.
DRAFT -7/17/97
17
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FROM:DADE, J.
P. 1/9
SPECIAL
Total Pages: 5
LRM ID: CJB75
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001
Friday, July 18, 1997
LEGISLATIVE REFERRAL MEMORANDUM
TO:
Legislative Liaison Officer - See Distribution below
FROM:
Janet R. Forsgren Tossing (for) Assistant Director for Legislative Reference
OMB CONTACT:
Constance J. Bowers
PHONE: (202)395-3803 FAX: (202)395-6148
SUBJECT:
EDUCATION Draft Bill on Higher Education Act Reauthorization Title VI
International Programs
DEADLINE:
5:00 p.m. Wednesday, July 23, 1997
In accordance with OMB Circular A-19, OMB requests the views of your agency on the above
subject before advising on its relationship to the program of the President. Please advise us If this
item will affect direct spending or receipts for purposes of the "Pay-As-You-Go" provisions of Title
XIII of the Omnibus Budget Reconciliation Act of 1990.
COMMENTS: The HEA Reauthorization legislation will be reviewed and cleared in separate parts.
ED will consolidate the entire bill for formal transmittal later.
DISTRIBUTION LIST
AGENCIES:
114-STATE Julia C. Norton . (202) 647-4463
8-US Agency for International Development - Robert M. Lester - (202) 647-8308
61-JUSTICE Andrew Fois (202) 514-2141
76-National Economic Council Sonyia Matthews (202) 45/6-6630
EOP:
Kathryn B. Stack
Timothy A. Rosado
Patricia A. Smith
Barry White
Robert M. Shireman
Michael Cohen
William R. Kincaid
Bruce K. Sasser
Rosalyn J. Rettman
Daniel J. Chenok
Edward M. Rea
James C. Murr
Janet R. Forsgren
Lisa M. Kountoupes
JUL-21-1997 10:57 TO:ROBERT SHIREMAN
FROM:DADE. J.
P. 2/9
LRM ID: CJB75
SUBJECT: EDUCATION Draft Bill on Higher Education Act Reauthorization
Title VI -- International Programs
RESPONSE TO
LEGISLATIVE REFERRAL
MEMORANDUM
If your response to this request for views is short (e.g., concur/no comment), we prefer that you respond by
e-mail or by faxing US this response sheet. If the response is short and you prefer to call, please call the
branch-wide line shown below (NOT the analyst's line) to leave a message with a legislative assistant.
You may also respond by:
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answer); or
(2) sending us 8 memo or letter
Please Include the LRM number shown above, and the subject shown below.
TO:
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Office of Management and Budget
Branch-Wide Line (to reach legislative assistant): 395-7362
FROM:
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The following Is the reponse of our agency to your request for views on the above-ceptioned subject:
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See proposed edits on pages
Other:
FAX RETURN of
pages, attached to this reponse sheet
JUL-21-1997 10:57 TO:ROBERT SHIPEMAN
FROM:DADE, J.
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T - VI (INTERNATIONAL PROGRAMS)
DRAFT 7/18/97
SEC. -- (a) Section 603(a) of the Act is amended--
(1) in the first sentence, by striking out the period at the end thereof and
inserting in lieu thereof"at all levels of education in the United States.";
(2) in the second sentence, by inserting "shall focus on the languages of a
specific world area, shall be conducted in collaboration with foreign language educators and
professional associations, and" after "centers";
(3) in paragraph (1), by inserting "and dissemination" after "the conduct";
(4) in paragraph (2), by-
(A) inserting "and dissemination" after "the development"; and
(B) inserting "and instructional delivery systems" after "teaching
materials";
(5) in paragraph (3), by striking out "and application of performance
testing" and inserting in lieu thereof a comma and "application, and dissemination of performance
testing instruments";
(6) in paragraph (5), by inserting "and dissemination to others in the
foreign language field" before "of instructional materials"; and
(7) by striking out paragraph (6) and inserting the following new
paragraphs:
"(6) the development and coordination of networking frameworks and
activities (such as Internet listservs and bulletin boards, newsletters, conferences, and discussion
groups) to provide foreign language teachers with ongoing professional development
opportunities; and
"(7) the conduct of overseas or domestic intensive summer language
institutes designed to meet the needs for intensive foreign language training by students or to
provide professional development of, and improve language instruction through pre-service and in
service training for, foreign language teachers.'
(b) Section 604 of the Act is amended--
(1) in the section heading by striking out "UNDERGRADUATE
1
2
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INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS" and inserting in
lieu thereof "UNDERGRADUATE PROGRAMS IN INTERNATIONAL STUDIES";
(2) in subsection (a)--
(A) by amending the subsection heading to read as follows:
"(a) Incentive for the Creation of New Pregrams and the Strengthening of
Existing Programs in Undergraduate International Studies and Foreign Languages and the
Internationalization of Undergraduate Education.--";
(B) by amending paragraphs (1) and (2) to read as follows:
"(1) Authority. The Secretary is authorized to make grants to institutions of
higher education, combinations of such institutions, or partnerships between nonprofit educational
organizations and such institutions, to assist such institutions or combinations in planning,
developing. and carrying out programs to improve undergraduate instruction in international
studies and foreign languages. Such grants shall be awarded for the purpose of seeking to create
new programs, or to strengthen existing programs, in undergraduate area studies, foreign
languages, and other international fields.
"(2) Federal Share and Use of Funds-Grants under this subsection may be used to
pay not more than 50 percent of the cost of projects and activities that are an integral part of such
a program, such as.-
"(A) planning for the development and expansion of programs in
undergraduate international studies and foreign languages and the internationalization of
undergraduate education;
"(B) teaching, research, curriculum development, and other related
activities;
"(C) training of faculty members in foreign countries,
"(D) expansion of existing and development of new opportunities for
learning foreign languages, including the less commonly taught languages;
"(E) programs under which foreign teachers and scholars may visit
institutions as visiting faculty;
"(F) international education programs designed to develop or enhance
linkages between two- and four-year institutions of higher education, or baccalaureate and post-
baccalaureate programs or institutions;
2
3
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FROM:DADE, J.
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"(G) the development of an international dimension in preservice and
inservice teacher training;
"(H) the development of undergraduate educational programs in locations
abroad where such opportunities are not otherwise available and which provide courses that are
closely related to on-campus foreign language and international curricula;
"(I) the integration of new and continuing education abroad opportunities
for undergraduate students into curricula of specific degree programs,
"(J) the development of model programs to enrich or enhance the
effectiveness of educational programs abroad, including pre-departure and post-return programs,
and the integration of educational programs abroad into the curriculum of the home institution;
"(K) the expansion of library and teaching resources;
"(L) the use of innovative technology to increase access to international
education programs;
"(M) the development of programs designed to integrate professional and
technical education with are 8 studies, foreign languages, and other international fields;
"(N) the establishment of linkages overseas with institutions of higher
education and organizations that contribute to the educational objectives of this subsection;
"(O) the conduct of summer institutes in foreign area and other
international fields to provide faculty and curriculum development, including the integration of
professional and technical education with foreign area and other International studies, and to
provide foreign area and other international knowledge or skills to government personnel or
private sector professionals in international activities; and
"(P) the development of partnerships between institutions of higher
education and the private sector, government, and elementary and secondary education
institutions to enhance international knowledge and skills.";
(C) in paragraph (3), by striking "and private" and inserting a comma and
"private sector corporation or foundation";
(D) after paragraph (4), by adding the following new paragraphs:
"(5) Grant Conditions.-(A) Grants under this subsection shall be made on such
terms and conditions as the Secretary determines to be necessary to carry out the objectives of
this subsection.
3
4
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"(B) An applicant for a grant under this subsection shall include in its
application--
"(i) evidence that the applicant, has conducted extensive planning
prior to submitting its application;
"(ii) an assurance that the faculty and administrators of all relevant
departments and programs within the applicant institutions are involved in ongoing collaboration
with regard to achieving the stated objectives of the application;
"(iii) an assurance that students at the applicant institutions, as
appropriate, will have equal access to, and derive benefits from, the program assisted under this
subsection; and
"(iv) an assurance that each institution of higher education will use
the Federal assistance provided under this subsection to supplement and not supplant institutional
funds and activities provided by the institution prior to the receipt of Federal funds.
"(6) Evaluation.--The Secretary may establish requirements for program
evaluations and require recipients to submit annual reports that evaluate the progress and
performance of students in programs under this subsection."; and
(3) by striking out subsection (b) and redesignating subsection (c) as subsection
(b).
(c) Sections 605, 607, and 632 of the Act are repealed and sections 606, 608, 609, and
610 are redesignated as 605, 606, 607, and 608 respectively.
(d) Section 610A is redesignated as section 609 and amended to read as follows:
"AUTHORIZATION OF APPROPRIATIONS
"SEC. 609. There are authorized to be appropriated such sums as may be necessary for each of
fiscal years 1998 through 2002 to carry out this part".
(e) Section 614 is amended to read as follows:
"AUTHORIZATION OF APPROPRIATIONS
"SEC. 614. There are authorized to be appropriated such sums as may be necessary for each of
fiscal years 1998 through 2002 to carry out this part".
(f) Section 627 is amended to read as follows:
4
5
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FROM:DADE. J.
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"AUTHORIZATION OF APPROPRIATIONS
"SEC. 627. There are authorized to be appropriated such sums as may be necessary for each of
fiscal years 1998 through 2002 to carry out this part".
(g) Part D of title VI is amended by adding at the end thereof a new section 633 to read
as follows:
"EVALUATIONS
"SEC. 633. (a) In General --For the purpose of improving the operation of programs and
projects assisted under this title and section 102(b)(6) under the Mutual Educational and Cultural
Exchange Act, the Secretary may make grants to or enter into contracts with institutions of higher
education and other public or private institutions or organizations to evaluate the effectiveness of
the programs assisted under this title and the programs assisted under section 102(b)(6) of the
Mutual Educational and Cultural Exchange Act.
"(b) Contents. The evaluations described in subsection (a) shall design, develop and
implement both quantifiable as well as quality outcome indicators by which to measure the
success of, and potential improvements in, the programs funded under this title and section
102(b)(6) of the Mutual Educational and Cultural Exchange Act. The evaluations shall measure
the success of such programs and identify organizational and program practices particularly
effective in meeting the purposes of this title.
"(c) Reservation of Funds--The Secretary may reserve not to exceed 2 percent of the
amount appropriated under this title for any fiscal year to carry out this section whenever the
amount made available under this title for each program authorized by this title for 8 fiscal year is
not less than the amount available for each such program for fiscal year 1998."
###
5
JUL-21-1997 10:57 TO:ROBERT SHIPEMAN
FROM:DADE, J.
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INTERNATIONAL EDUCATION PROGRAMS
The Department funds a variety of international education programs to help meet the nation's
need for expertise in foreign languages, area studies and international studies, and for a more
internationally literate citizensy.
Nine programs are currently funded under the HEA and provide a coordinated approach
to strengthening international education: National Resource Centers, Foreign Language
and Area Studies Fellowships, Language Resource Centers, International Research and
Smdies, Undergraduate International Studies and Foreign Languages, Centers for
International Business Education, Business and International Education, American
Overscas Research Centers, and the Institute for International Public Policy.
These programs have helped to create high quality graduate and undergraduate
international programs; encouraged outreach to the pre-collegiate level; and helped the
business community meet the demands of an increasingly competitive global
markerplace.
Both the Department and the community agree that these programs are working well and
should be continued with only minor changes.
We are proposing the following minor changes to the legislation to eliminate unfunded programs.
to strengthen outreach to K-12, and to encourage greater use of technology, and to include a new
section on evaluation.
Eliminate Sec. 605 Intensive Summer Language Institutes and Sec. 607 Foreign
Periodicals Program Sec.607 has not been funded since 1993 and Sec.605 has never
been funded. Our recommendation to eliminate these two sections is consistent with the
Department's policy to eliminate unfunded programs.
Eliminate Sec. 632 Preservation of Pre-1992 Programs. The elimination of this uigger
provision gives the Department greater flexibility to support programs that best meet the
changing needs in international education. Furthermore, Sec. 632 refers specifically to
the 1992 amendments to HEA and is outdated.
Eliminate Scc. 604(b) Programs of Demonstrated Execllence. This subsection of Sec.
604 Undergraduate International Studies and Foreign Language Programs has never
been funded. We are proposing to climinate it and incorporate key provisions of this
program in subsection (a).
Revise Sec. 603 Language Resource Centers for the following purposes:
To strengthen their role L9 resources to improve foreign language teaching and
learning in K-12;
To focus each Center on 8 specific world area and carry out activities in
collaboration with foreign language educators and professional associations;
JUL-21-1997 10:57 TO:ROBERT SHIREMAN
FROM:DADE, J.
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To make dissomination an assential component of cach Center activity:
To encourage utilization of the advances in educational technology; and
To authorize domestic and overseas intensive summer language programs.
Add a new section on evaluation. Consistent with the increasing emphasis on
performance measures and program results, we are proposing to add & new section on
evaluation of the domestic and overseas international education programs. However, we
are recommending that no funds be spent for this purpose until the amount available to
each program is not less than the amount available for fiscal year 1998.
DRAFT 7/16/97
8
JUN-26-97 THU 14:35
P. 01/03
OF EDUCATION
UNITED STATES DEPARTMENT OF EDUCATION
.
OFFICE OF POSTSECONDARY EDUCATION
UNITED STATES of AMERICA
Office of the Deputy Assistant Secretary
Policy, Planning, and Innovation
7th and D Streets, SW
Room 4060, ROB-3
Washington, DC 20202-5143
Phone: (202) 205-2987 Fax: (202) 401-5749
Fax Cover Sheet
Number of pages following cover sheet: 2
TO:
Bob ShiRemaN
FAX: 456-2223
FROM:
Maureen A. McLaughlin
Francine Picoult
Lynn Mahaffie
Sandy Wood
Tia Cosey 3
MESSAGE:
600 INDEPENDENCE AVE.. S.W. WASHINGTON. D.C. 20202
Our mission is to ensure equal access to education and to promote educational excellence throughout the Nation.
JUN-26-97 THU 14:35
P. 02/03
U.S. Department of Education
Office of Inspector General
Draft
EXECUTIVE SUMMARY
The 105th Congress has an opportunity to improve substantially the integrity of the Student Financial
Assistance (SFA) programs and save taxpayers and students significant amounts of money through the
1998 reauthorization of the Higher Education Act (HEA). During the 1992 HEA reauthorization,
Congress legislated a number of helpful reforms, including the 50-percent limitation on ability-to-
benefit students, the requirement for trade schools to certify that no more than 85 percent of their
funding is derived from HEA Title IV programs, statutory financial responsibility standards, and
controls on institutional practices such as 30-day delayed disbursement, pro rata refunds, and multiple
loan disbursements. The Office of Inspector General (OIG) believes that Congress should build on
those reforms and continue to improve the integrity of the SFA programs.
To assist Congress in this important task, the OIG has prepared the following recommendations for
amendments to the HEA. These recommendations are based on OIG audits, investigations and other
data about fraud, waste and abuse in the SFA programs.
The OIG recommendations are organized into four major areas:
Institutional eligibility and enforcement
Student eligibility
Loan programs
Law enforcement
Each proposal sets forth our position, the current law, the recommended change to the law, and our
rationale for the proposed change, as summarized below.
Institutional Eligibility
The mechanisms for ensuring that only high quality and well
and Enforcement
administered schools participate in the SFA programs continue to
need improvement in order to ensure the integrity of the programs.
We recommend that Congress -
legislate performance standards for vocational schools,
eliminate Pell eligibility for high-default schools,
restrict distance learning to academic degree programs,
require schools to post a surety when appealing loss of
eligibility due to high-default rates,
legislate separate statutory requirements for vocational trade
schools and,
eliminate the 25 year old requirement for Pell advance funding.
JUN-26-97 THU 14:35
P. 03/03
U.S. Department of Education
Office of Inspector General
Draft
Student Eligibility
In order to ensure that students are receiving appropriate amounts of
federal aid, we recommend that Congress --
require verification of applicants' income data with IRS, and
limit professional judgment by financial aid administrators.
Loan Programs
Effective management of the loan programs is dependent upon
accurate and timely data. Therefore, we recommend that Congress --
require annual reconciliation of NSLDS data,
change the definition of loans in repayment, and
standardize accounting and reporting for guaranty agency
reserve funds.
In order to ensure that students are receiving their refunds, we
recommend that Congress --
require certification of refund liabilities by vocational trade
schools, and
require discharge of loans to the extent of unpaid refunds for
student victims.
In addition, to protect the integrity and reduce the cost of the
Consolidation and PLUS loan programs, we recommend that
Congress --
prohibit the consolidation of defaulted loans, and
require the determination of the ability to repay PLUS loans
and require joint parent/student liability.
Law Enforcement
Due to the length of time it takes to prepare complex court cases
against institutions that defraud the SFA programs, we recommend
that Congress -
require that SFA records be retained for five years and that
certain original records be retained, and
apply the extended statute of limitation for financial institution
fraud to the FDLP.
CONTACT PERSON: Ellen Bass, Counsel to the Inspector General and Legislative Liaison
ii
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PAGE 02
NAGPS
National Association of Graduate-
Professional Students, Inc.
Executive Summary
NAGPS Comments on Reauthorization of the Higher Education Act
February 17, 1997
NAGPS believes federal commitment to graduate/professional education should include the
following:
I.
Title IX Fellowship Program: Establish one program which offers awards in three areas
(like TRIO):
a.
an individual, portable fellowship award for study in the arts, social sciences, and
humanities
b.
an institutional fellowship award in areas of "national need" with no legislative
language that specifies these areas)
c.
an individual fellowship award for underrepresented groups (women, minorities,
low-income students)
II. Student Loans
a.
maintain current total limit on student loans of $138,000
b.
preserve interest exemption on graduate/professional student loans
c.
increase annual and aggregate subsidized student loan limit
1.
increase annual subsidized limit from $8,500 to $10,500
2.
increase aggregate subsidized limit from $65,500 to $79,500 (based on 7
year normative time to Ph.D. degree)
d.
reduce student loan interest rate to 5% or 5.5%
e.
establish a loan repayment assistance program
f.
reduce or eliminate origination fees
g.
establish parity favoring student borrowers between FFELP and FDSLP
h.
extend the "grace period" on interest on student loans to 1 year
i.
review needs analysis for outside employment and independent students
see page 2
825 Green Bay Road Suite 270 Wilmette, IL 60091 (847) 256-1562 FAX (847) 256-8954
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PAGE 03
Executive Summary
NAGPS Comments on Reauthorization of the Higher Education Act
February 17, 1997
Page 2 of 2
III. Tax Incentives
a.
reinstate student loan interest deduction
b.
provide above-the-line tax deduction on tuition
c.
retroactively and permanently extend Section 127 of Tax Code, related to
employer-provided educational assistance
d.
provide deductions for higher education savings accounts/IRAs, and remove
penalties for early withdrawal from such accounts if funds are used for education
e.
reinstate tax-free status of fellowships and stipends
IV. Other Aid Funds
a.
extend Pell Grant eligibility to graduate and professional students who meet needs
analysis
b.
use excess College Work Study funds to support additional teaching and research
assistants
For more information, contact NAGPS at (847) 256-1562 or visit our web site at
http://www.nagps.org/NAGPS/.
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PAGE 04
NAGPS
National Association of Graduate-
Professional Students, Inc.
February 17, 1997
The Honorable Bill Goodling
Chairman, Committee on Education and the Workforce
2181 Rayburn House Office Building
Washington, DC, 20515-6100
Dear Chairman Goodling,
On behalf of the 160 graduate and professional student associations, and nearly 20,000
individual student members of NAGPS, I'd like to thank you and your Committee for the
opportunity to offer comments and suggestions for this year's Reauthorization of the Higher
Education Act. As the nation's only student group focused on graduate and professional student
issues, we appreciate the opportunity to suggest programs that directly benefit our members and
the nation as a whole.
The first section of our comments focuses on articulating a "social compact" for graduate
and professional education: the rationale for a continued and strengthened federal role in
providing funding and programmatic support for the nation's graduate and professional students.
The second section of our comments focuses on the use of fellowships and grants to provide for
wider access to advanced degree programs, and our suggestion for a new, revised Title IX
Graduate Fellowship Program. The third and fourth sections of our comments highlight the
skyrocketing level of graduate and professional student debt, and provides some suggestions for
helping students manage their debt loads, first through changes in the student loan program
itself, and secondly through tax incentives designed to encourage savings for higher education
expenses. Finally, we conclude with some suggestions for other sources of aid that could also
be used, such as currently unused College Work Study funds, to support graduate and
professional education while serving important national needs.
The Rationale for Graduate and Professional Education
Graduate and professional education produces the scientists, teachers, and scholars
responsible for the discovery and dissemination of new knowledge, the interpretation and
preservation of our cultural and intellectual heritage, and the articulation of our culture to the
global environment with which we are increasingly interconnected. Graduate and professional
education plays a central role in improving the health of our citizens and the quality of their
lives. It makes essential contributions to our economic competitiveness and to our national
security. It is the vehicle by which thousands of students and practicing professionals advance
their skills, thereby expanding their career opportunities and increasing their productivity. It is
also the vehicle for retraining thousands of workers who, as their chosen fields become obsolete,
can re-orient their skills to other productive endeavors, thereby continuing to contribute to the
national well-being.
825 Green Bay Road
Suite 270
Wilmette, IL 60091
(847) 256-1562
FAX (847) 256-8954
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PAGE 05
Rep. Bill Gooding
February 17, 1997
Page 2 of 9
The United States invested $171 billion in research and development (R&D) in 1995.
Both the government and industry recognize that R&D is the principal engine driving economic
growth and productivity. This nation's R&D effort could not occur without graduate education.
Graduate and professional programs educate the scientists and engineers needed by industry,
government, and universities. Moreover, the students in our graduate and professional programs
are a key component of current research: they are active research performers, conducting a
major portion of university research and enriching it with fresh ideas. To a far greater extent
than in other countries, graduate and professional students are a key source of the creativity and
productivity of U.S. academic research, the source of more than 50 percent of the national basic
research. In this country, graduate education and research are conducted in the same place by
the same people, and both activities are enriched by their interconnections.
Equally important is the role which graduate education plays in the shaping of intellectual
future of the United States. In addition to training the future scientist and leaders of industry,
graduate education shapes the future teachers and thinkers of our country. Teachers at all levels
of education, from the professoriate to special education teachers in elementary schools, benefit
from the teaching practice and in-depth study of subject matter that a graduate or professional
school experience offers. These teachers ultimately teach the next generation of American
children in schools across the nation, children from which tomorrow's leaders of society,
industry and community are chosen. Advanced degree programs in the arts, social sciences, and
humanities foster thinkers and researchers who continue the difficult and arduous process of
understanding our own humanity and history. The impact of these programs often goes
unrecognized and unchampioned in a society that places increasing primary emphasis on material
and economic well being, however, we maintain that the support of programs in the study and
teaching of arts, humanities and social sciences is absolutely vital if we are to preserve and
enhance the intellectual and moral growth of our society.
The market for graduate and professional education extends well beyond the academic
community. In 1994, nearly 50 percent of PhDs were employed outside higher education; 61
percent of that year's engineering PhDs were employed in industry. Master's education is one
of the most rapidly growing sectors of higher education; a wide array of master's programs has
been crafted by universities working cooperatively with the corporate sector to meet its need for
new technical skills. These finely tuned programs permit people to advance their career
opportunities by meeting the emergent needs that will sustain the competitiveness of U.S.
industry. Through university technology transfer programs, direct links between the graduate
academic laboratory and industrial laboratory are strengthening, allowing for a direct impact of
graduate and professional education on the national economy.
There is a clear national interest and needs to be a strong federal role in maintaining the
quality and vigor of our nation's graduate education enterprise. Threats to the well-being of
American citizens and the security of this nation no longer take direct military forms, rather, the
major threats to America in the 21st century will be technological and economic. Just as the
Cold War provided a necessary rationale and compact between the federal government and
higher education, so too does the need to preserve and enhance our technological and economic
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PAGE 06
Rep. Bill Gooding
February 17, 1997
Page 3 of 9
strength in an increasingly global economy. By investing in the education of graduate and
professional students, we develop new strengths and enhance existing ones to preserve our place
as a world leader.
Leadership in science and technology is a national imperative, and graduate education is
an essential component of our scientific and technological capacity. Preserving our heritage;
applying the lessons of the past to present problems; encouraging and developing the creativity
of our citizens; assuring that we are the masters, not servants, of our technology - these
activities are the domain of teaching, research, and scholarship in the humanities, social
sciences, and the arts. They, too, are national imperatives, and their support falls squarely within
the province of the federal government.
Graduate and professional education serves a number of important national needs and
interests. To maintain and enhance America's economic competitiveness and national security,
a firm commitment to supporting graduate and professional education in a reauthorized Higher
Education Act is needed. Our comments which follow detail some of our ideas on what form
such a commitment could take.
Fellowships and Grants as Means of Access
The United States has built the largest and most accessible system of higher education
in the world. More than 50 percent of high school graduates enroll in higher education
programs. Over 12 million students attend U.S. colleges and universities. These institutions
employ more than 750,000 faculty members, and provide instruction in a wide range of topics.
The vast majority of those faculty have been educated in our nation's graduate and professional
school programs.
However, the nation still suffers from the consequences of unequal participation in
graduate education. Because of the importance of graduate education to the nation, we must
attract talent from the widest possible talent pool; we cannot afford underparticipation in
graduate education from any sector of our society. Yet women, minorities, and low-income
students remain severely underrepresented in graduate education, not just as students, but as
professors, educators, and role models. A key component of the federal role in graduate
education should be directed at ending this underrepresentation, through providing equal
economic and academic opportunity to all current and future graduate and professional students.
One way that accessibility for women, minorities and low-income students can be
enhanced is through the federal provision of scholarships and grants to students from these
groups. Since 1991, the number of graduate fellowships offered by the Federal Government has
declined from over 60,000 to under 10,000. Grants and fellowships targeted in specific academic
areas, such as the humanities and social sciences, provide students who would otherwise not
pursue their interests in these areas with financial resources where none would otherwise exist.
These tools can be used to raise participation of underrepresented groups in advanced degree
programs, train future leaders and academics from these groups, and encourage pursuit of
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PAGE 07
Rep. Bill Gooding
February 17, 1997
Page 4 of 9
academic goals in these fields which are absolutely essential to the welfare of the American
spirit.
To accomplish these goals, we believe that Title IX of the current Higher Education Act
can be rewritten and reauthorized to provide more support to students from these groups, in one
program that will be easy to administer and support. Such a single program would include the
following three awards:
a)
An Individual, Portable Fellowship Award For Study in the Arts, Social Sciences, and
Humanities - Such an award would cover all educational costs and provide a living
expense stipend for students enrolled in the arts, social sciences and humanities for a four
year term or until completion of the degree program (whichever is shorter). Incoming
graduate students would apply for this fellowship. and applications would competitively
be reviewed with awards made directly to the student, regardless of institution of
enrollment.
b)
An Institutional Fellowship Award in Areas of National Need - Such an award would
cover all educational costs and provide a living expense stipend for students enrolled in
advanced degree programs in certain disciplines deemed to be in the "national need" in
a more flexible manner (e.g. the current GAANN program, but without the direct listing
of academic fields in the legislative language). Such awards would be made to individual
students by departments who receive the institutional award and would extend for four
years, or until completion (whichever is shorter).
c)
An Individual Fellowship Award For Underrepresented Groups - Such an award would
cover all educational costs and provide a living expense stipend for students from
underrepresented groups (women, minorities, low-income students). Awards of this type
would be made to individual deserving students upon entrance to the advanced degree
program, and would extend for four years, or until completion (whichever is shorter).
Helping Students Manage Excessive Loan Debt
In a report titled "Graduating Into Debt", released in 1996, the Education Resources
Institute and the Institute for Higher Education Policy described an alarming increase in graduate
and professional student debt. Between 1993 and 1995, graduate and professional student
borrowing increased by $3.3 billion to a total loan volume of $7.7 billion, an increase of 74%
in just two years! In 1995, over 1 million graduate and professional students used a student loan
to pay for their cost of education, an increase from 620,000 student borrowers in 1993. Graduate
and professional students make up only 19% of all student borrowers, yet they borrow 28% of
all loan dollars, and loans given to graduate and professional students average over $3,000 per
year greater than those provided to undergraduate borrowers.
More alarming is their finding that, for many societally important professions, the debt
burden of a recent advanced degree recipient is prohibitively high, such that graduates are forced
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PAGE 08
Rep. Bill Gooding
February 17, 1997
Page 5 of 9
away from lower-paying, public service-oriented jobs, such as indigent care medicine or public
interest law. Medical, dental and law students face average monthly student loan payments upon
graduation in the range of $500-800, based on median total student loan debts of $40,300 for
law, $64,059 for medicine, and $67,772 for dentistry. These figures represent 10-25% of
expected starting salaries for legal services attorneys and community health specialists. Even if
these graduates gain employment as an associate in a large legal firm or as a general practice
doctor, these monthly payments are still nearly 10% of their monthly income. This large level
of indebtedness can dictate employment choices, prevent meaningful savings or investment, and
translate into a difficulty to obtain home and small business loans. In the worst case, these high
levels of debt, combined with an inability to find lucrative employment, lead to student loan
default. Even for core academic doctoral degree recipients, monthly payments on student loan
debts in the $10,000 range represent 2-5% of monthly income for those making average salaries
within their fields.
The study also found that students from low-income and minority backgrounds are most
likely to borrow at the graduate or professional school level. 77% of graduate or professional
students with annual incomes less than $10,000 used student loans in 1993, compared with 57%
of graduate or professional students in the annual income range of $20,000-$29,999. Similarly,
62% of African American graduate students and 60% of Hispanic students borrowed in 1993,
compared with 54% of white, non-Hispanic students. At a time when the nation still suffers from
the consequences of unequal participation in graduate education, rising costs appear to offer a
substantial barrier to participation in graduate education by those who would benefit from it the
most.
There are several factors which have contributed to this surge in graduate and
professional student borrowing:
1)
Increasing tuition costs which have exceeded the cost of inflation.
2)
Shifting resource allocations at the federal, state, and institutional levels that have
reduced grant, scholarship, and fellowship funding for post-baccalaureate
education.
3)
Changes in the U.S. and global job market with many fields now requiring
graduate degrees for those who wish to advance their careers.
4)
Anxiety over corporate downsizing resulting in increasing numbers of individuals
entering graduate/professional school to add skills and credentials to avoid losing
their jobs.
To assist students in managing their large debt loads, and to prevent future graduates
from amassing such large total debts, we recommend that the Committee propose a number of
measures designed to reduce the overall costs of obtaining and paying off a student loan, thereby
alleviating the need for increased student loan dollars:
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Rep. Bill Gooding
February 17, 1997
Page 6 of 9
Keep the Current Aggregate Limit on Student Loans - Given the extreme debt burden of
a student who borrows all available loan dollars (currently $138,000), we believe an
increase in the overall limit on student loan dollars is an unwise move if the goal is to
minimize student loan indebtedness. In cases of specific high-cost programs (such as
those formerly covered by the HEAL (Health Education Assistance Loans) program), this
limit may be extended to prevent enrolled students from having to secure private loans
to continue their education. Without an appropriate limit on student loan amounts, we
fear that total loan volume will continue to increase dramatically to unmanageable levels
which seriously impact a new graduate's career choices, and economic stability
Preserve the Interest Exemption on Graduate/Professional Student Loans - By reducing
the amount of loan balance subject to interest accrual while still enrolled, this interest
exemption saves students billions of dollars in loan debt upon graduation. Without this
exemption, average monthly payments on student loans would skyrocket, limiting career
choices and perhaps dissuading students from enrolling in advanced degree programs.
Allow A Greater Proportion of Subsidized Student Loans - By increasing the amount of
subsidized loan dollars a student can obtain on an annual basis, from $8,500 to $10,500,
total interest charges on the loan are reduced, and students can begin to repay principal
on the loan sooner after graduation, thus reducing the likelihood of default, and
diminishing the student's debt load. Similarly, the total aggregate amount available to
students as subsidized loans should be increased by $14,000. This would represent an
increase from the current subsidized limit of $65,500 to a new lixuit of $79,500, an
increase of $2000 per year for 7 years, the normative time to degree for a student
seeking an academic Ph.D. degree.
Reduce the Student Loan Interest Rate - By tying student loan interest rates to the
30-Year T-Bill, student loan interest rates are projected to decline to a rate of 5% or
5.5%. Over the life of the student loan, any reduction in the interest rate results in
substantial savings to the student borrower. Savings to the federal government via
reduced interest payments on subsidized loans can be used to fund other loan
improvements.
Establish a Loan Repayment Assistance Program - For students engaged in particular
programs (such as law, medicine, etc.) who pursue public interest and public service
careers, a loan repayment assistance program can be created to pay part or all of a
student's loan burden, based on their ability to pay relative to their comparatively low
salary. Either a national program could be created, or federal funds could match state
funds used to create and sustain state repayment programs.
Reduce or Eliminate Origination Fees - Origination fees do not help students pay for
educational costs, yet students pay interest on these fees for the life of the loan. Even a
small reduction in the origination fee would save students millions of dollars annually.
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Rep. Bill Gooding
February 17, 1997
Page 7 of 9
Establish Parity Between FDSLP and FFELP - Competition between the two federal loan
programs has proven to reduce administrative burden and loan costs students must endure
to obtain a student loan. Students should not be financially penalized for picking either
program, and parity between programs in terms of interest rates, origination fees,
repayment schedules, or other terms of the loan, choosing the most favorable conditions
for the student borrower in each case.
Extend the "Grace Period" for Interest on Subsidized Loans - In today's competitive job
market, it is not clear that a student will necessarily find sufficient employment within
a short time after graduation to allow them to begin payment on their student loans. We
suggest the lengthening of the interest-free "grace period" to one year, which would
minimize interest accrual and help reduce the number of student loans which enter default
each year.
Review Needs Analysis to Improve Student Aid - The needs analysis methodology used
to determine a student's educational expenses and financial need should be reviewed,
particularly with regards to existing penalties to students who obtain outside employment
as a means to reduce their reliance on student loans or other sources of federal financial
aid. Such a review would discourage excessive borrowing based on overestimates of
student need. Additionally, we support efforts to improve access to student aid by
independent students who demonstrate financial need.
Using Tax Incentives to Reduce Educational Costs
The establishment of tax incentives for education are another means to encourage savings
and expenditures on higher education and, in particular, pursuit of an advanced degree. We
believe that the-following tax incentives can be used in addition to the grants, fellowships and
student loan program changes to reduce the overall cost of graduate and professional education:
Reinstate a Tax Deduction on Student Loan Interest Such a proposal would allow for
a tax deduction on a student's loan interest accrual on unsubsidized loans, which make
up the bulk of student loans taken. This deduction existed until the passage of the "Tax
Simplification Act of 1986, and it particularly benefits low-income students who
essentially must take out student loans to pay for enrollment in an advanced degree
program. The net result of such a deduction would be to reduce the overall cost of the
loan.
Provide a Tax Deduction on Tuition - Another means of reducing overall college costs
would be to provide a tax deduction on tuition and student fee expenses. Either the
student or the student's parents (if the student is considered as a dependent) could deduct
an amount equal to tuition and fees from their Adjusted Gross Income, thereby reducing
tax payments due. Although the benefits to individual filers will differ with total income,
we believe that all taxpayers would ultimately benefit from such a deduction.
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Rep. Bill Gooding
February 17, 1997
Page 8 of 9
Retroactively and Permanently Extend Section 127 of the Internal Revenue Code - The
"Employer Educational Assistance" section would allow for employees to receive up to
$5250 in educational benefits (tuition, etc.) from their employers without incurring a tax
on those benefits as compensation. Permanent restoration of this Section is key to
providing for the ability of employees to receive graduate training to improve their ability
to compete for jobs, improve their job performance, acquire new skills, and contribute
to a growing global economy.
Provide Deductions for Higher Education Savings Accounts - Parents and students would
be allowed to put aside savings annually for educational expenses in a defined "education
IRA or "accumulation program", and be able to deduct the amount contributed to these
accounts from their Adjusted Gross Income, thereby reducing tax payments. These funds
could then be used later for higher education expenses, and withdrawn at any time for
such expenses without tax penalties. This would serve as an incentive for both individual
and family savings toward the cost of higher education, and potentially reduce the
amount of student loan dollars required to finance the remainder needed to cover such
costs. In particular, this would allow older, returning students to save gradually for
future educational costs while maintaining employment in preparation for re-enrollment
in an advanced degree program.
Reinstate Tax-Free Status of Stipends and Fellowships - The tax-free status of
scholarships and fellowships (as well as stipends) was eliminated in the "Tax
Simplification Act of 1986." Presently, any scholarship or fellowship monies received
by a graduate or professional student which exceed the amount necessary to pay tuition,
books and fees, is considered taxable income. Any stipend as a teaching or research
assistant is also considered taxable income. Reinstating the tax-free status of all stipends,
scholarships, or fellowships would reduce the overall educational cost to the student,
reducing tax payments and lowering student debt burdens.
Expanding Other Aid Funds for Graduate and Professional Students
Where grants and fellowships no longer suffice, student loans must be used to pay the
remainder of the student's educational costs. But what about other existing forms of financial
aid, such as Pell Grants and College Work Study? We would support the use of other financial
aid programs to support and promote graduate and professional education, such as:
Extending Pell Grant Eligibility to Graduate and Professional Students - Graduate and
professional students who meet needs analysis requirements would be eligible for Pell
Grants at the current maxima allowable. Such an extension of eligibility would
significantly reduce overall debt burdens, and provide significant advantage to
low-income students, replacing loan dollars with grant funds.
Using College Work Study Funds for Teaching and Research Assistants - Many
institutions return unused CWS funds at the end of each fiscal year, and these funds
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Rep. Bill Gooding
February 17, 1997
Page 9 of 9
could be used with departmental or institutional funds to create additional teaching and
research assistant positions which support graduate and professional students. These
additional positions can help to improve teaching, improve graduate and professional
time-to-degree, and support students who would otherwise work outside of their
immediate degree objectives to pay for their educational costs.
Concluding Remarks
The pending Reauthorization of the Higher Education Act offers a wide range of
opportunities to review our current programs and whether they provide the maximum educational
opportunity to all U.S. citizens. We have offered a number of ideas here that, if implemented,
will serve to reduce overall educational costs and expand access to advanced degree programs.
An investment in graduate and professional education is an investment in the future of our
nation, as the future strength of our nation and our economic well- being relies on a well-trained
and educated workforce. We encourage the Committee to begin this investment through
implementation of the programs and proposals outlined above, and we look forward to working
with the Committee to see these proposals become reality.
Sincerely,
Byon Harnegan
Bryan Hannegan
President, National Association of
Graduate-Professional Students (NAGPS)
cc:
Honorable Howard P. "Buck" McKeon
Honorable James M. Jeffords
Honorable Edward M. Kennedy