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Records of the Office of National Service (Clinton Administration)
Richard C. (Rick) Allen's Files
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FOIA Number: 2013-0661-F (2)
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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
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National Service
Series/Staff Member:
Rick Allen
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2150
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Department of Education
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Clinton Presidential Records
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WASHINGTON OF EDUCATION
The Fund for the Improvement of
Postsecondary Education
UNITED STATES OF AMERICA
INNOVATIVE PROJECTS FOR
COMMUNITY SERVICE:
Office of
Guidelines for Applicants
Postsecondary
Education
Deadline: June 15, 1993
Objectives
The Higher Education Amendments of 1992 substantially revised the community
service program of the Fund for the Improvement of Postsecondary Education
(FIPSE). The new program, entitled "Innovative Projects for Community
Service", is intended to support innovative projects that encourage college
student participation in community service activities.
FIPSE provides support in the form of two or three year grants. It is estimated
that $1,000,000 will be available for approximately 20 new grants this year,
but this is only an estimate and does not bind the Department of Education to a
specific number of grants. The range of grants is expected to be from $25,000
to $75,000 annually. Projects may begin on October 1, 1993.
Eligibility
Under this program grants may be awarded to institutions of higher education
(including combinations of such institutions) and to other public agencies and
non-profit private organizations.
Definitions
Community service means planned, supervised service designed to improve the
quality of life for community residents particularly community residents with
low incomes, or to assist in the solution of particular problems related to the
needs of such residents. This term does not include partisan or non-partisan
political activity, lobbying, direct solicitation of donations, religious
proselytizing, conduct of religious services or instruction, pro-union or
anti-union activity, or activities that result in the displacement of employed
workers or impair existing contracts for service.
Background of Programs
The program was orginally designed to combat a documented drop in student
commitment to public and community service. One reason for this decline was
thought to be student concern over the increasing burden of student loans. For
the past six years FIPSE has been supporting projects that examined whether
the number of students involved in community service could be increased if
participating student were offered an alternative source of financial assistance
that would reduce their debt burden.
The newly authorized program does not require a connection between student
services and financial aid. College students are participating in volunteer
activities in steadily increasing numbers. In fact, secondary students are
becoming much more active in their communities and are arriving on college
campuses seeking to continue that involvement. The issue now is not how to
interest students in community service but rather how to structure and focus
their interest on opportunities that will benefit both the student and the
community.
93 04:14 PM *DEPT ED. POSTSEC LH P02
EXPIRATION
UNITED STATES DEPARTMENT OF EDUCATION
CHECK STATES C LA
OFFICE OF POSTSECONDARY EDUCATION
MEMORANDUM
July 19, 1993
TO:
Office of National Service
FR:
Paul Jamieson 9.e 2x :-
RE:
Pell Grant cost re-estimates
The Department has good news on the Pell Grant situation. There are two main points to stress in last-
minute negotiations to members reluctant to support national service because of the Pell situation.
FEWER RECIPIENTS + SUPPLEMENTAL APPROPRIATION = SMALLER SHORTFALL
The latest Department of Education estimates reveal fewer Pell Grant recipients and lower costs
in the most recent academic year (1992-1993); the increase in applicants was 5% instead of 8%
as originally estimated.* In the 1994 budget request, we calculated a $2.024 billion shortfall.
However, based on these re-estimates, we now estimate the current shortfall to be $1.2 billion.
1994 Budget Cumulative Shortfall Projection:
$2.024 billion
1992-1993 Award Year Cost Reduction:
-$148 million
1993-1994 Award Year Cost Reduction:
-$315 million
1993 Supplemental Appropriation
-$341 million
Current Shortfall Projection
$1.2 billion
Further, the House Appropriations Committee included $415 million in the FY 1994 bill toward
reducing the shortfall which, if enacted, would bring down the shortfall to $805 million.
FEWER RECIPIENTS WOULD ALLOW FOR MAXIMUM AWARD TO REMAIN AT $2300
The Department now projects Pell Grant program costs for academic year 1994-1995 to be
$5.752 billion, which is $551 million less than when the Department made its FY 1994 budget
request. The House provided a 1994-1995 level of funding that would support a $2250
maximum award.
The Administration supports using the $551 in lower costs to fund Pell Grants to keep the
maximum award at $2300.
The above information was compiled from a draft letter from Secretary Riley to House Appropriations
Chairman Natcher. I'll keep you posted on this issue.
* Historically, upturns in economic conditions decrease the amount of Pell grant recipients.
400 MARYLAND AVE. a.w. WASHINGTON. D.C. 20202
05. 20. 93 09:31 AM *DEPT ED. POSTSEC LH P01
OF
UNITED STATES DEPARTMENT OF EDUCATION
MUITED STATES OF AMERICA
OFFICE OF POSTSECONDARY EDUCATION
THE ASSISTANT SECRETARY
FACSIMILE TRANSMISSION
DATE:
5/20
NUMBER OF PAGES:
3
TO:
6MA
FROM:
Ater
Office of Postsecondary Education
Department of Education
Room: 4082 Building ROB-3
7th & D Streets SW
Washington, DC 20202-5100
Telephone# 202-708-5547
Fax# 202-708-9814
MESSAGE:
400 MARYLAND AVR., S.W. WASHINGTON D.C. 20202-5100
05. 20. 93 09:31 AM *DEPT ED. POSTSEC LH PO2
EXCEL ACCOUNTS
The Clinton Administration will make repayment easier and encourage national and
community service through EXCEL Assounts, All students will have the opportunity !! repay
as a percentage of their income over time. The EXCEL Account will make such "income-
contingent" loans available for the first time. The EXCEL Account offers students offers
Americans the chance to invest in their education and training and to pay back their loans as they
start to reap the benefits.
1. FLEXIBLE AND UNIVERSAL LOANS: The EXCEL Account makes college and
training accessible to all students, and to allow students the maximum flexibility in paying
back their loans.
2. ENDING CRUSHING DEBT FOR YOUNG PEOPLE STARTING THEIR
CAREERS: Currently our education system often makes young people pay large
amounts of debt just at the moment when young people have their lowest earning
potential and the hardest time finding jobs. The EXCEL Account allows a young person
the ability to pay a set percentage of income, so that repayment is proportionate to
income.
3. ENCOURAGE NATIONAL SERVICE: Too many of our young people are
discouraged from taking lower paying jobs as teachers or police officers because they face
large fixed monthly payments. The EXCEL Accounts will encourage national and
community service by ensuring that young people will not have to pay an exceptionally
high percentage of their income simply because they have chosen jobs where their service
to their communities exceeds the size of their paychecks. The EXCEL Account will, for
example, make it far casier for a recent medical school graduate who normally would
have high fixed monthly loans to spend a few years serving lower-income
communities without facing a crushing debt burden.
4. ENCOURAGE ENTREPRENEURSHIP: Our current loan system can discourage
entrepreneurial behavior. Where a young person out of school faces fixed student loan
costs, that creates a disincentive to take high risks -- like entrepreneurial activity
--- where a person may make little money in the short-term in pursuit of larger rewards
in the future. Allowing repayments based on income eliminates these disincentives to
take risk.
5. LOWER DEFAULT RATES: Because EXCEL Accounts will determine loan
payments on the basis of IRS verified incomes, they will dramatically reduce default rates
by ensuring that anyone who works pays, and by not forcing borrowers into default
simply because they experience a period of unemployment.
05. 09:31 *DEPT ED. POSTSEC LH P03
KEY POINTS REGARDING THE COST OF
INCOME-CONTINGENT LOAN REPAYMENT
Who Will Choose Income-Consingent Loan Repayment? Logically, income-contingent
repayment will be most appealing to those borrowers whose initial payments under income-
contingent repayment will be less than under a regular fixed 10 year amortization schedule.
However, because there is a great deal of uncertainty regarding future income streams, it is
likely that some borrowers will opt for income-contingent repayment even though this will
increase their initial payments. Also, some borrowers whose initial payments will decline
under income-contingent repayment will probably choose a regular repayment schedule
because it is simpler, does not require the submission of income information, or they expect
their incomes to increase substantially in future years. Taking all these factors into account,
our best estimate is that between 15 and 25 percent of borrowers will choose income-
contingent repayment.
Comparison of Regular and Income-Contingent Repayment: There are three major
differences in expected payments under an income-contingent as compared to a regular
repayment schedule.
Income-contingen: repayment will likely stretch out the time required to repay the loan.
For borrowers, this will mean paying OUI loss money per-year over a longer period of
time. For the Federal Government, under current interest rate assumptions, the
additional time required to fully repay the loan under income-contingent repayment will
not affect costs.
Income-contingent repayment will save money by receiving payments from some
borrowers who otherwise would have defaulted because they did not have sufficient
income to make their regularly scheduled payments.
o
Income-contingent repayment will cost money by losing payments from some borrowers
with little or no income who would have made regularly scheduled repayments but do
not owe money under àn income-contingent repayment schedule.
Our best estimate is that the above factors will cancel out and that offering borrowers the
option of income-contingent repayment will not cost or save the Federal Government any
money.
OPP/PES
May 6. 1993
THE WHITE HOUSE
WASHINGTON
FAX COVER SHEET
Office of National Service
Room 145 - OEOB
Washington, D.C. 20500
(202) 456-6444 Phone
TO: SUSAN STROUD
ORGANIZATION: CAMPUS COMPACT GUEST c/o LINDA
FAX #: (
)
PHONE #: (
)
FROM:
JINA SANONE
DATE:
5-24-93
NUMBER OF PAGES (including cover sheet) : 7
COMMENTS: LINOA PLEASE SEE THAT SUSAN STROLD GETS THIS
FAX. THANK You.
SUSAN- FOLLOWING ARE PELL GRANT TAUKING POINTS & INFO
ON SUDENT REFORM ACT, PAVE JAMIESON is FAXING INFO W ME
DN Gons 2000. WHEN I RECEIVE IT I will FAX IT to you
(If you have any problem with the fax transmission, please call
(202) 456-6444.
The document accompanying this facsimile transmittal sheet is
intended only for the use of the individual or entity to whom it
is addressed. This message contains information which may be
privileged, confidential or exempt from disclosure under
applicable law. If the reader of this message is not the
intended recipient, or the employee or agent responsible for
delivering the message to the intended recipient, you are hereby
notified that any disclosure, dissemination, copying or
distribution, or the taking of any action in reliance on the
contents of this communication is strictly prohibited. If you
have received this information in error, please notify us
immediately at (202) 456-6444.
TALKING POINTS ON THE FY 1994 BUDGET AMENDMENT ON PELL GRANTS
President makes second major attempt to solidify Pell Grants
The President has requested a $2 billion amendment to the 1994
budget to eliminate the shortfall in the Pell Grant program.
The amendment request represents the second attempt to put the
Pell Grant program on solid financial footing and end past
administrations' practices of borrowing from future students
to pay for current ones. The President made a similar request
in the stimulus package (Fy 1993 supplemental), which was
killed in the Senate.
Pell Grants will remain the cornerstone of financial aid for
millions of low-income students nationwide.
Total 1994 request will offer Pell Grants to record numbers
Despite the many cuts in other domestic programs to reduce the
massive federal deficit, the Department of Education's FY 1994
budget includes a $6.3 billion request for Pell Grants (over
and above the $2 billion in this amendment.)
The FY 1994 request would fund awards to more than 4.7 million
students in academic year 1994-1995 -- 342,000 more than this
coming academic year (1993-1994).
If the amendment is adopted, the maximum award for FY 1994
will remain at its FY 1993 level of $2300.
National service will not take money away from Pell Grants
National service funding will not take funding from the Pell
Grant program.
The Clinton Administration has also made proposals to ease the
burden of paying for postsecondary education and training and
reform the student aid system:
-- The National Service Trust Act of 1993
o Up to $10,000 educational benefit
-- The Student Loan Reform Act of 1993:
o Direct lending to save billions -- with some of
the savings going to students in the form of
reduced interest rate;
o Streamlined, "one-stop" financial aid shopping
o Flexible repayment options, including income
contingent repayment (EXCEL Accounts)
JAMIESON 5/12
BACKGROUND SHEET ON PELL GRANTS
Description The Federal Pell Grant program provides need-based
grants to low-income undergraduate students for tuition, standard
living allowances, supplies, and other expenses. Appropriations
for Pell grants are discretionary and not an entitlement; the
overall funding amount depends on the number of eligible applicants
and schools that take advantage of the program. Pell Grants are
the cornerstone of most low-income students' financial aid packages
and are usually combined with other grants and loans. Pell Grants
are "forward funded", meaning that Congress appropriates funds a
year in advance to give schools and students adequate planning
time; funds appropriated for FY 94 will primarily support awards in
the 1994-1995 academic year for roughly 4.7 million students -- a
record number of students served.
Eligibility The need analysis formula for Title IV need-based
student aid determines eligibility for Pell Grants and is applied
uniformly. The formula (family income, assets, household size,
independent or dependent students, etc.) determines a student's
"expected family contribution" (EFC). The EFC is the key benchmark
for determining student eligibility for the program. One change
in the Education Department's 1994 budget from last year is the
presence of a student contribution for students with family income
over $5000. Once determined eligible by the formula, students can
use their grants at one of 6,600 participating postsecondary
institutions. The $2 billion shortfall resulted because more and
more eligible students and schools applied and received Pell Grants
in the past few years. Instead of turning away students or vastly
reducing the award maximum, past administrations simply borrowed
from subsequent appropriations (hence the shortfall). President
Clinton requested $2 billion in the FY 1993 supplemental budget to
eliminate the shortfall, but it was not allowed to come to a vote
in the Senate. As a result, the President has requested an
amendment to the 1994 budget to fill the $2 billion Pell deficit.
Awards The maximum award, which was authorized as high as $3900
for FY 1994, was limited to $2300 by Congress in language specified
in the appropriations act for 1993 because of the increasing
numbers of eligible students and schools. The maximum appropriated
award fell from $2400 in FY 1992 (funds 1992-1993 academic year) to
$2300 for FY 1993, which funds the upcoming academic year (1993-
1994). The maximum award for the '94-'95 academic year will
remain at $2300, despite the increased number of eligible students
and schools. The average award is approximately $1,400 dollars per
student.
JAMIESON 5/12
STUDENT LOAN REFORM ACT OF 1993
Today, the Federal student loan programs provide billions of dollars to private lenders and
other agencies -- billions of taxpayer dollars that do not go toward serving students.
Furthermore, complex procedures and inflexible repayment plans create serious problems for
some students. Burdened with debt and locked into insensitive repayment plans, many students
cannot repay their loans, leaving taxpayers to foot the bill. The current system doesn't serve
students or taxpayers well.
This legislation reforms the student loan system with a less costly and less complicated
alternative. The Administration's Student Aid Reform Act will provide all borrowers with
flexible repayment options, including EXCEL Accounts, which allow borrowers to repay loans
as a percentage of their incomes. It also reforms the student loan system by replacing the current
guaranteed student loan system with a system of direct Federal lending. These changes will:
Make repayment easier by allowing borrowers to select the best way to repay their
loans. Borrowers will be able to choose among several different repayment options,
including fixed, graduated, extended, and income-contingent EXCEL Accounts.
Providing a range of flexible repayment plans will allow students to enter lower-paying
community service jobs without worrying about their debt burden and will reduce default
rates.
Reduce costs for taxpayers by substituting Federal borrowing for more expensive private
capital and eliminating excess profits in the current system. By using low-interest rate
Treasury borrowing and by eliminating excess profits, direct lending will reduce Federal
costs by $4.3 billion through fiscal year 1998.
Reduce costs for students by lowering interest rates. Part of the substantial savings
achieved from lowering the cost of capital and eliminating profits will be used to reduce
the interest rate for student borrowers, when the plan is fully implemented.
EXCEL ACCOUNTS: EASING REPAYMENT AND ENCOURAGING SERVICE
The EXCEL Account will, for the first time, allow all borrowers to pay off their loans
as a percentage of their incomes. This income contingent repayment plan, together with other
flexible repayment options, will give borrowers the opportunity to choose lower-paying service
jobs regardless of the level of debt incurred while in school. This new plan will also help to
reduce student loan defaults.
Borrowers will have the opportunity to choose from a range of flexible repayment options
to best fit their financial situation. In addition, borrowers will be able to switch repayment plans
as their financial situations change.
1
EXCEL Accounts will provide for repayments that depend upon income. Borrowers will
be able to repay over a longer period of time than in the other repayment options. The length
of repayment will depend on the borrower's level of debt and income.
The legislation requires the Secretary of Education to publish regulations on the specific
provisions of this income-contingent plan, including the percentage of income to be
repaid each year and the length of repayment.
To increase accountability, the Secretary will also have the authority to require defaulters
to repay through income contingency.
The legislation will extend EXCEL Accounts to borrowers with existing loans. It
authorizes the Department of Education to offer income contingent repayments to current
borrowers if lenders do not offer them acceptable income sensitive repayment
opportunities.
Fixed, graduated, and extended repayment plans will also be available to all borrowers.
Standard repayment describes a fixed-payment, fixed-term (usually 10 years) plan that
is currently used by most student loan borrowers.
Extended repayment describes a plan with a lower fixed payment and a longer fixed
term than available under a standard repayment plan.
Graduated repayment plans expect borrowers to repay smaller amounts in the beginning
when their incomes tend to be lower and larger amounts later when their incomes tend
to be higher.
IRS Role
To make repayment easier and more effective, the bill contains provisions to include the Internal
Revenue Service (IRS) in the collection of student loans.
Starting in fiscal year 1994, the legislation gives the Secretary the authority to offer
income contingent repayments to borrowers using information from the IRS on borrowers'
incomes. The legislation will amend the current disclosure provisions to allow IRS to
provide this information to the Department of Education.
As a second step, the bill requires the Secretaries of Education and Treasury to jointly
develop a plan to provide repayment options through the IRS and wage withholding.
ONE-STOP DIRECT STUDENT LOANS
The legislation calls for the Federal government to make loans directly to students,
2
substituting Federal borrowing for private capital. These changes will streamline the system,
reduce interest rates for students, and save taxpayers billions of dollars.
The proposal will replace the Federal Family Education Loan (FFEL) programs with the
Federal Direct Student Loan (FDSL) programs. Most students will receive all of their financial
aid through their existing financial aid offices -- "one stop shopping".
Direct lending substitutes Federal capital for more expensive private capital and eliminates
excess profits to lenders, saving $4.3 billion through fiscal year 1998. Under the plan, direct
lending will phase in over four years, beginning in academic year 1994-1995. Federal capital
will be used for all new student loans. The goal is to begin with 4 percent of new loan volume
in direct lending in the first year, 25 percent the second year, 60 percent the third year, and full
implementation in academic year 1997-1998.
Private lenders will no longer make, or "originate", student loans. Many postsecondary
institutions will make loans themselves; others will use the services of alternative originators.
No institution will be required, however, to originate loans itself. In addition, no school will
"service" or collect loans.
Some features of the legislation regarding origination and servicing are:
Criteria measuring the financial and administrative capability of institutions to originate
loans will be used to determine which institutions may originate loans and which should
use alternative originators.
Institutions that meet the financial and administrative criteria, but do not wish to originate
loans, will also be able to use alternative originators.
The Department of Education will pay a small fee to schools that originate loans
themselves and will contract out on a competitive, fee-for-service basis to alternative
originators. Alternative originators may be State agencies, private lenders, Sallie Mae,
and other organizations.
Responsibility for servicing loans while students are in school and while they are in
repayment will not rest with the postsecondary institutions. The Department of
Education will contract with a number of organizations to service student loans. These
organizations, which could include State agencies, Sallie Mae, and private firms, will be
chosen through a competitive process.
ENSURING A SMOOTH TRANSITION
The Department of Education will be responsible for monitoring and overseeing the
student loan system as part of its overall oversight of the Federal student aid system. The
Department is developing a detailed plan to ensure adequate loan capital in the event that private
3
capital dries up. The legislation will provide the Department with additional authorities to move
quickly if capital shortages occur.
Postsecondary institutions, alternative originators, servicers, and the Department of
Education will share data on student loans throughout the nation. The Department will
also complete work on the National Student Loan Data System. Such a system has been
under development since 1989 and must be expanded to perform all the functions needed
for direct loans.
During the phase-in period, the terms and conditions for the FDSL, including loan limits,
eligibility rules for loan subsidies, and number of loan programs, would be similar to the
existing FFEL programs, including the provisions for loan deferment and forbearance.
The legislation also provides for two changes to the nation's guarantee agency services,
which provide in every state an intermediary for the Federal government and reinsure all
loans in the current FFEL programs. The legislation ensures adequate financing for the
current guarantee agencies during the transition and provides for alternative mechanisms
to assure loan guarantees in the event that any of the guarantee agencies do not continue
to operate.
4
DEPART OF DEPARTMENT
UNITED STATES DEPARTMENT OF EDUCATION
OFFICE OF THE SECRETARY
LNITED STATES OF AMERICA
May 12, 1993
TO:
Office of National Service
FR:
Paul Jamieson AWg
RE:
Pell Grants
On Tuesday night, the President proposed an amendment to the 1994
budget to eliminate the shortfall in the Pell Grant program.
Attached are talking points on the proposed amendment and a
background sheet on the program.
400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202
Our mission is to ensure equal access to education and to promote educational excellence throughout the Nation.
TO THE CONGRESS OF THE UNITED STATES:
I am pleased to transmit today for your immediate
consideration and enactment the "National Service Trust
Act of 1993" and the "Student Loan Reform Act of 1993. "
These Acts represent innovative public policy founded on
traditional American values: offering educational opportunity,
rewarding personal responsibility, and building the American
community. In affirming these values, the Acts reject wasteful
bureaucracy -- instead reinventing government to unleash the
ideas and initiative of the American people. Also transmitted
is a section-by-section analysis.
Throughout the Presidential campaign last year, Americans
of all backgrounds and political persuasions responded to
national service like few other ideas. The reasons are clear.
Higher education is fundamental to the American Dream, but
complex procedures and inflexible repayment plans have created
serious problems for many students with education loans to pay
back. Defaults are too high today -- and taxpayers are left to
foot the bill. Americans are yearning to reaffirm an American
community that transcends race, region, or religion -- and to
tackle the problems that threaten our shared future.
The two Acts are designed to meet these basic American
needs. The National Service Trust Act of 1993 establishes a
domestic Peace Corps, offering hundreds of thousands of young
people the opportunity to pay for school by doing work our
country needs. The Student Loan Reform Act of 1993 overhauls
the student loan system. Through a one-stop direct student loan
program, the Act will save taxpayers billions of dollars, lower
interest rates for students, and simplify the financial aid
system. And through new EXCEL Accounts and other repayment
options, the Act will offer borrowers greater choice and
lower monthly payments while reducing the chance of defaults.
The National Service Trust Act of 1993 establishes a
definition of national service that is clear but broad.
2
National service is work that addresses unmet educational,
environmental, human, or public safety needs. It enriches
the lives of those who serve, instilling the ethic of civic
responsibility that is essential to our democracy. And national
service does not displace or duplicate the functions of existing
workers.
Building on the National and Community Service Act of 1990
and the flourishing community service programs of nonprofit
organizations and States, the initiative rejects bureaucracy in
favor of locally driven programs. In the spirit of reinventing
government, the Act will empower those with the greatest
expertise and incentives to make national service work.
The Act enables citizens of all backgrounds to serve and
use their educational awards where they see fit. While many
participants will be recent college graduates, Americans will
be eligible to enter the program at any time in their adult
lives. Both full-time and part-time service will be encouraged.
And whatever their education level, those who complete a term
of service will receive an award of $5,000. The award will be
payable toward past, present, or future educational expenses in
4- and 2-year colleges, training programs, and graduate and
professional schools.
The Act demands that programs meet tough guidelines
for excellence and requires measurable performance goals and
independent evaluations. Within these limits, however, the
Act enables the people who run programs to design them. The
smallest community-based organizations and largest Federal
agencies will be able to compete for funding. A variety of
program models will be eligible, ranging from youth corps that
enable at-risk youth to meet community needs, to preprofessional
programs that give college students ROTC-like training and then
placements in specific problem areas, to diverse community corps
that involve Americans of all backgrounds in meeting common
goals.
3
With the economic market as a model, there is competition
at every level of the system: programs compete for State
approval, States compete for Federal approval, and programs
at the national level compete against each other and States for
Federal approval. To build public/private partnerships that
earn support far beyond government, the Act requires programs
to make a cash match and to increase nongovernment support as
time passes.
The Act is designed to reduce waste and promote an
entrepreneurial government culture. The Act establishes a new
Government Corporation for National Service that combines two
existing independent agencies, the Commission on National and
Community Service and ACTION. With flexible personnel policies
and a small, bipartisan Board sharing power with a Chairperson,
the Corporation will operate as much like a lean nonprofit
corporation as a Government agency.
The State level will mirror the Federal level and
build a strong partnership between the two. Bipartisan
State commissions on national service will be responsible for
selecting programs to be funded by States. To ensure genuine
Federal/State cooperation, a representative of the Corporation
will sit on State commissions and a representative of the States
on the Corporation Board.
The National Service Trust Act of 1993 encourages Americans
to join together and serve our country -- at all ages and in all
forms. The Act enhances the Serve-America program for school-
age youth; extends and improves the VISTA and Older Americans
Volunteer Programs authorized under the Domestic Volunteer
Service Act; supports the Civilian Community Corps and Points
of Light Foundation; and pulls these efforts under the new
Corporation. The Act will help instill an ethic of service
in elementary and secondary school students, encourage them
to serve in their college years, and give them further
opportunities later in their lives.
4
The Student Loan Reform Act of 1993 will take an important
first step toward comprehensive reform of the student loan
system. It saves money, makes loan repayment more affordable,
and holds students more accountable. The measures in no way
replace the Pell Grant program, which will remain the
cornerstone of financial aid for millions of students.
The Student Loan Reform Act of 1993 replaces the current
Federal Family Education Loan program with the Federal Direct
Student Loan Program over a 4-year period. By eliminating
subsidies to private lenders and making loans directly to
students, direct lending will save taxpayers $4.3 billion
through Fiscal Year 1998 and still allow interest rates to drop
for student borrowers. Many schools will make loans directly
to students on campus, though none will be forced to do so. In
addition, no institution will service or collect loans. This
reform simplifies the system for many students, enabling most
to receive all their aid through "one-stop shopping" at their
institutions' financial aid offices.
The lending reform expands choice and reduces burdens
for all student borrowers by offering a variety of repayment
plans -- including fixed, extended, graduated, and income-
contingent schedules. In the same way that multiple financing
options help homeowners, these plans offer real choice to all
and lower monthly payments to those who want them. Income-
contingent repayments -- through the new EXCEL Accounts -- also
encourage service by students who do not participate in service
under the National Service Trust Act. With more manageable
monthly payments, more students will be able to take jobs that
pay less but do more for their communities, without risking
default. And whatever plan they first choose, students will be
able to change their repayment schedule as their circumstances
change.
5
The Student Loan Reform Act of 1993 will also reduce
default rates. By electing income-contingent repayment
schedules, students with lower incomes will be able to repay
their loans on a manageable plan, without defaulting. Through
cooperation with the IRS, the Act will improve collection and
monitoring of student loans. And for those who are able to
pay but do not, the Act will give the Secretary of Education
authority to require payment on an income-contingent basis.
Opportunity, responsibility, and community. go beyond
politics. They are basic American ideals. Enactment of these
two Acts will express the Nation's commitment to these ideals
and to our shared future. I urge the Congress to give the
legislation prompt and favorable consideration.
William
THE WHITE HOUSE,
May 5, 1993.
05.24. 93 02:32 PM *DEPT ED. POSTSEC LH P01
OF
UNITED STATES DEPARTMENT OF EDUCATION
UNITED TATES OF STATES
OFFICE OF POSTSECONDARY EDUCATION
THE ASSISTANT SECRETARY
FACSIMILE TRANSMISSION
5/24
DATE:
NUMBER OF PAGES:
7
TO:
JINA
FROM:
PAOL
Office of Postsecondary Education
Department of Education
Room: 4082 Building ROB-3
7th & D Streets SW
Washington, DC 20202-5100
Telephone# 202-708-5547
Fax# 202-708-9814
MESSAGE:
400 MARYLAND AVE.. S.W. WASHINGTON. D.C. 20202-5100
05. 24. 93 02:32 PM *DEPT ED. POSTSEC LH P O 2
DEPARTMENT OF EDUCATION PROGRAMS AND ACTIVITIES
The following are descriptions of the major programs and
activities administered by the U.S. Department of Education,
organized by principal operating component. The descriptions are
limited largely to stating the purpose of each program. The 1994
budget request for each program is shown in parentheses.
OFFICE OF ELEMENTARY AND SECONDARY EDUCATION
The Chapter 1 program ($6.5 billion) provides financial
assistance to local school districts for compensatory education
for disadvantaged children. Funds are allocated through a
statutory formula based on each State's per-pupil expenditure for
education and its count of eligible children. Basic Grants
($5.8 billion) are awarded to virtually all counties and more
than 90 percent of the school districts in the country.
Concentration Grants ($700 million) are provided to counties and
school districts that have at least 6,500 children living in
poverty or in which such children make up at least 15 percent of
the school-aged population.
The Even Start program ($110 million) provides an integrated
program of early childhood education and adult education, helping
young children develop the skills needed in elementary school and
enabling their parents to gain basic literacy skills. States
receive formula grants and make competitive awards to local
educational agencies.
Chapter 2 State and Local Programs ($415 million) provide funds
to States to improve the quality of elementary and secondary
education for children in public and private schools. Chapter 2
funds, also known as the "block grant, = support B range of broad
purposes, rather than narrow categorical activities.
Eisenhower Mathematics and Science Education State Grants
($253 million) focus on improving the skills of teachers and the
quality of instruction at the elementary and secondary levels in
mathematics and science. The program plays an important role in
implementing the comprehensive strategy developed by the Federal
coordinating Council on Science, Engineering, and Technology
Committee on Education and Human Resources (FCCSET/CEHR).
Drug-Free Schools and Communities Act programs ($598 million)
provide grants to States and school systems nationwide for their
drug education efforts and supplement this financial assistance
with national leadership, dissemination of information on
effective programs, technical assistance, and other discretionary
activities. Some grants support drug prevention activities at
institutions of higher education.
05. 24. 93 02:32 PM *DEPT ED. POSTSEC LH P03
- 2 -
The Magnet Schools Assistance program ($108 million) helps to
foster educational excellence and achieve desegregation without
forced busing, while broadening the educational choices of
children and parents.
Indian Education programs ($84 million) help improve educational
opportunities for Indian children and adults. These programs
include supplementary programs in local educational agencies,
enrichment programs in Indian-controlled schools, special
educational services to Indian children, training for Indian
educational personnel, fellowships for Indian students, adult
education, and regional Technical Assistance Centers.
The Impact Aid program ($689 million) provides grants to
compensate local educational agencies (LEAs) when Federal
activities result in increased enrollments or loss of local
revenues. The two largest components of Impact Aid are
Section 3 (a) payments for children living on Federal property
whose parents are members of the uniformed services and children
living on Indian lands, and Section 3 (b) payments for children
who live or have a parent working on Federal property.
Education for Homeless Children and Youth ($25.5 million)
provides formula grants to States for an office of Coordinator of
Education for Homeless Children and Youth and to develop and
carry out a State plan for the education of homeless children.
States also make sub-grants to local educational agencies for
tutoring, remedial education, transportation, and other services
designed to enable homeless children to enroll in, attend, and
succeed in school.
OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS
Bilingual Education programs ($154 million) help childran of
limited English proficiency learn English so that they can enter
English-speaking classrooms. A wide variety of educational
programs are supported, programs vary from extensive use of
native language for instruction in different subjects to
immersion in English. Immigrant Education ($30 million) provides
formula grants to school districts that have at least 500
immigrant students or in which such students make up at least
3 percent of current enrollment.
OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES
The Special Education Grants to States program ($2.2 billion),
authorized under the Individuals with Disabilities Education Act
(IBEA), makes formula grants to States to assist than in
providing special education and related services to children with
disabilities from ages 3 through 21.
05. 24. 93 02:32 PM *DEPT ED. POSTSEC LH P04
- 3 -
Special Education Preschool Grants ($344 million) augment funds
provided under the Grants to States program by awarding formula
grants to States to assist them in providing special education
and related services to preschool children with disabilities.
The Special Education Grants for Infants and Families program
($256 million) makes formula grants to states for planning,
developing, and implementing statewide systems to provide early
intervention services to all children with disabilities from
birth through 2 years and their families.
Vocational Rehabilitation State Grants ($1.9 billion) provide
funds to State vocational rehabilitation agencies to help persons
with disabilities become gainfully employed.
The National Institute on Disability and Rehabilitation Research
($67 million) awards discretionary grants for support of
rehabilitation research and training centers, rehabilitation
engineering research centers, and research and demonstration
projects that address diverse issues in rehabilitation, including
the causes and consequences of disability and ways to improve
educational, employment, and independent living opportunities for
persons with disabilities.
The Department provides substantial support for three
institutions that serve the needs of persons with disabilities.
The American Printing House for the Blind ($6.5 million) in
Louisville, Kentucky, provides special aducation materials for
students who are blind, offers advisory services for consumers,
and conducts research. The National Technical Institute for the
Deaf ($42 million) in Rochester, New York, provides postsecondary
technical education and training for deaf students. And
Gallaudet University ($77 million), a private, nonprofit liberal
arts institution in Washington, D.C., offers college preparatory,
undergraduate, and continuing education programs for persons who
are deaf, and graduate programs for persons who are deaf or
hearing.
OFFICE OF VOCATIONAL AND ADULT EDUCATION
Vocational Education Basic Grants ($973 million) support the
efforts of States, local educational agencies, and postsecondary
institutions to improve vocational programs and ensure access for
special populations.
Tech-Prep Education ($104 million) trains students for demanding
technical occupations through programs that begin in the last two
years of high school and include at least two years of
postsecondary education.
05. 24. 93 02:32 PM *DEPT ED. POSTSEC LH P05
- 4 -
Adult Education State Programs ($262 million) makes formula
grants to the States for programs to teach basic skills to
illiterate adults and to help adults attain high school
equivalency. This program is the Department's primary vehicle
for supporting literacy efforts nationally.
Adult Education National Programs ($9.3 million) include
research, evaluation, and developmental activities related to
adult literacy, as well as support for the independent National
Institute for Literacy.
Workplace Literacy Partnerships ($22 million) supports prejects
that demonstrate methods of providing literacy training to meet
workforce needs.
OFFICE OF POSTSECONDARY EDUCATION
The Federal Pell Grant program ($6.3 billion) ensures financial
access to higher education by providing need-based grant aid to
more than 4 million low- and middle-income undergraduate
students. Awards to students range from a maximum of $2,300 to a
minimum of $200.
The three campus-based student aid programs ($1.2 billion)
require and 25 percent institutional match and give institutions
substantial discretion in making awards to students. Federal
Work-Study ($527 million) provides grants to participating
institutions to pay the salaries of undergraduate or graduate
students working part-time. Federal Supplemental Educational
Opportunity Grants ($500 million) provide grant assistance of up
to $4,000 per academic year to undergraduate students with
demonstrated need. And Federal Perkins Loans ($144 million)
provides loan capital for institutional revolving funds.
Interest charged to borrowers is currently 5 percent during
principal repayment and zero during in-school, grace, and
deferment periods.
Federal Family Education Loans ($3.9 billion), formerly known as
Guaranteed Student Loans (GSL), subsidize and guarantee loans by
commercial and nonprofit lenders to postsecondary students and
their parents. Federal Family Education Loans (FFEL) include
subsidized, low-interest Stafford Loans, for which the Federal
Government pays the interest while the student is in school and
during certain grace and deferment periods; Unsubsidized Stafford
Loans, for which the Federal Government does not pay interest
while the student is in school; Parent Loans for Undergraduate
Students (PLUS), which are less subsidized than Stafford Loans
and are available to parents of dependent undergraduate students;
Supplemental Loans for students (SLS), which are less subsidized
than Stafford Loans and are available primarily to independent
undergraduates and graduate students; and Consolidation Loans,
05. 24. 93 02:32 PM *DEPT ED. POSTSEC LH P06
- 5 -
which allow borrowers with multiple student loans who meet
certain criteria to consolidate their obligations and extend
their repayment schedules.
The Federal TRIO Programs ($399 million) fund postsecondary
education outreach and student support services to encourage
individuals from disadvantaged backgrounds to enter and complete
sollege. These services complement the Department's student
financial aid programs by helping to ensure postsecondary
education access for disadvantaged students at all educational
levels and by providing them with the support that they need to
complete their postsecondary programs successfully.
The Title III: Aid for Institutional Development programs
($209 million) strengthen the fiscal management and academic
programs of postsecondary institutions that serve high
proportions of disadvantaged students, including historically
black colleges and universities (HBCUs).
The International Education and Foreign Language Studies programs
($54 million) are designed to strengthen the sapability and
performance of American education in foreign languages and in
area and international studies. IEFLS programs support
comprehensive language and area study centers within the United
States, fund research and curriculum development, and provide
opportunities for American scholars to study abroad.
The Department's Scholarships and Fellowships programs
($121 million) provide financial support for undergraduate and
graduate study, particularly in mathematic and scientific fields.
Several programs emphasize expansion of opportunities for groups
that are underrepresented in graduate education.
Howard University ($193 million) receives a direct Federal
appropriation that pays approximately 55 percent of its
educational and general expenses and accounts for 46 percent of
the University's total budget.
OFFICE OF EDUCATIONAL RESEARCH AND IMPROVEMENT
The Department's Research programs ($91 million) support
education research, development, technical assistance, and
dissemination of information. Specific activities include
national education research and development centers, each of
which focuses on a particular set of education problems; regional
education laboratories, which provide technical assistance to
States, school districts, and schools in support of school
improvement activities; the Education Resources Information
Center (ERIC) system, which includes clearinghouses that focus on
specific areas of education; and field-initiated studies
conducted by individual scholars.
05. 24. 90 02:02 PM **DEPT ED. POSTGEC LII 007
- 6 -
The Department's National Center for Education Statistics
monitors trends in gnrollments, staff, finances, and other key
($60 million) collects data on education at all levels and
indioators of the condition of aducation. The Center also
collects longitudinal data on student progress, supports
international assessments of student achievement, conducts fast-
response surveys to obtain policy data, and provides technical
assistance to help state and local educational agencies improve
their statistical systems and collect data that are comparable
from State to State.
The National Assessment of Educational Progress ($65 million) is
the only nationally representative assessment of what U.S.
students know and can do. NAEP is the primary source of reliable
information on changes over time in the educational achievement
of studints at grades four, eight, and twelve in various
subjects. In addition to national dessssments, NAEP has
conducted State-representative assessments in recent years to
determine whether regular State assessments are feasible and will
yield valid, reliable, representative data.
The Fund for Innovation in Education ($40 million) allows the
Secretary to Carry out programs and projects that show promise of
identifying and disseminating nationally significant, innovative
educational approaches. FIE also supports programs for
technology education, strengthening computer education resources
in schools, comprehensive school health education, civic
education, and aloohol abuse education.
The Star schools program ($27 million) supports grants to
statewide or multi-State telecommunications partnerships for the
purpose of improving instruction in mathematics, science, foreign
languages, and other subjects, especially for students in schools
eligible for Chapter 1 services and those in remote areas with
limited access to these courses.
The Department's Libraries programs ($115 million) provide
formula and competitive grants to assist in expanding and
improving public library services, especially for underserved
groups.
09. 07. 93 02:34 PM *DEPT ED. POSTSEC LH P01
UNITED STATES DEPARTMENT OF EDUCATION
OFFICE OF THE ASSISTANT SECRETARY FOR POSTSECONDARY EDUCATION
FACSIMILE TRANSMISSION
PATE:
9/7
NUMBER OF PAGES: 2
TO:
JINA
FROM:
PAUL
office of the Assistant Secretary for
Posteccondary Education
Department of Education
Room: 4082 Building ROB-3
7th and D Streets, SW
Washington, DC 20202-5100
Telephone# 202-708-5547
Fax# 202-708-9814
MESSAGE:
400 MARYLAND AVE., S.W. WASHINGTON. D.C. 20202-
09. 07. 93 02:34 PM *DEPT ED. POSTSEC LH PO2
STATEMENT OF
UNITED STATES DEPARTMENT OF EDUCATION
OFFICE OF THE SECRETARY
UNITED PRATES 0 18
September 7, 1993
NOTE TO JINA SANONE
How's it going in service land? I had a few logistics things I wanted to ask you about.
Did you get a copy of the training documents that Lorne was talking about when I had to leave
last week? I'm curious to see how they fit in.
I got a call from Frank Williar. We'll be over to the OEOB at 2:00 next Thursday (September
16). Any luck reaching the other people? This is a tough month for Longanecker, but we
should be able to squeeze it in.
Any word on the reception and/or letters from President for the career people? Do you need
people to help set that thing up? Also, Susan wanted to get a letter of congratulations and thanks
to Ray Cartines. I will draft something for you to review, but sould you sheck into the details
of getting those letters approved by the Correspondence gods?
I had a meeting last week with a number of private education organizations, many of whom are
religious schools. Do you know if a person teaching a secular subject in a religious school wold
be eligible for a national service position? Or, a more likely example, could someone work as
a national service participant (not an employee of the school) in a religious setting? The
legislation is not crystal clear to me on this point. More generally, how can we legally include
religious schools and churches, many of whom have been operating successful national service
models for decades?
We got a request for a briefing from the Women's Democratic Club. Does this violate any
ethics rules?
Do you have Robert's phone number at Harvard? I need to give him a call about Teach for
America.
Do you know when the staff meeting is this week?
Terry Peterson is a go for the Council on Foundations briefing.
Whew!!! That was dizzying. Details, details
Have
400 MARYLAND AVE.. S.W. WASHINGTON, D.C. 20202
Our mission LS to ensure equal access to education and to promote educational excetience throughout the Nation.