Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
16987798
label
Education (6)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
16987798
sourceUrl
contentType
document
title
Education (6)
citationUrl
collections
James M. Cannon Files (Ford Administration)
James Cannon's Issues Files
subjects
Department of Health, Education, and Welfare. Office of Education. Division of Equal Educational Opportunity. ca. 1965-5/4/1980
Education
Federal aid
Grants and fellowships
Legislation
iiifBase
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
16987798
coverageEndDate
logicalDate
1976-10-31
month
10
year
1976
coverageStartDate
logicalDate
1975-05-01
month
5
year
1975
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
url
mediaId
6f36e3f337f770c2
ocrText
The original documents are located in Box 12, folder "Education (6)" of the James M.
Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 12 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
Educe
THE
WHITE HOUSE David -
WASHINGTON
1976 OCT 2 AM 11 10
your
October 1, 1976 Thank
MEMORANDUM FOR:
JIM CANNON
ART QUERN
June
FROM:
DAVID LISSY only
Ed Aguirre was confirmed last night as Commissioner
of Education.
FORD is LIBRARY GERALD
100202
DECISION
Last Day: October 13, 1976
THE WHITE HOUSE
WASHINGTON
October 12, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
JIM CANNON Jun
SUBJECT: Enrolled 5546 - Health Professions
Educational Assistance Act of 1976
Attached for your decision is H.R. 5546 which extends
through fiscal year 1980 authorities to provide financial
support for the education and training of physicians,
dentists, and other health professionals.
Background
H.R. 5546 extends and substantially expands the number
of narrow categorical programs of support for the educa-
tion of health professionals. These programs, initiated
in a limited manner in the 1960's and expanded and broadened
by the Comprehensive Health Manpower Act of 1971, provide
Federal funds to medical, dental, and other health pro-
fessions schools through grants to institutions (i.e.,
capitation, construction, special project grants) and
student assistance. Authorizing legislation for these
programs expired June 30, 1974. Since that time, the
programs have been funded under a continuing resolution.
The House passed H.R. 5546 by a vote of 296-58 in July
1975. The Senate approved the bill one year later by a
vote of 88-0. The conference bill was approved in both
houses by voice vote.
The 1971 Health Manpower Act was designed to assist the
schools to increase the numbers of students enrolled,
in order to meet what was then perceived as a serious
aggregate shortage of health professionals. During the
subsequent 5 years, enrollments and graduates increased
dramatically, and further increases are anticipated over
the next few years.
GERALE FORD -
2
Last year, the Department of Health, Education, and Welfare
(HEW) submitted Administration legislation to Congress
designed to shift the emphasis from Federal support merely
to increase enrollments to getting schools to address the
two most critical problems -- geographic and specialty
maldistribution of physicians and dentists. The Adminis-
tration proposed to provide capitation grants to schools
agreeing to target their efforts on recruiting and training
primary care and family medicine health professionals,
and to medical dental students agreeing to serve in
geographic areas experiencing critical shortages.
While the stated objectives of H.R. 5546 are similar to
those proposed by the Administration, the enrolled bill
differs greatly in its specific program authorizations
and funding levels from the HEW proposal. Moreover,
H.R. 5546 requires a significantly larger Federal role
in health professions education, places more Federal
requirements on the schools and provides less targeting
of Federal funds.
Major Provisions
The provisions of this legislation are numerous and detailed,
and are presented in OMB's enrolled bill report at Tab A.
The major areas include:
--institutional support (capitation assistance, i.e.,
an amount for each student enrolled, special project
grants, and construction grants),
--student assistance (loan and scholarship programs),
--foreign medical graduates (tightening immigration
requirements), and,
--National Health Service Corps (NHSC) (completely
revises NHSC authorities).
Budget
For fiscal year 1977, H.R. 5546 authorizes $638 million,
$330 million more than the amounts you proposed. In
fiscal year 1978, $665 million is authorized, but in
addition the legislation authorizes loan authority of
$500 million in 1978, $510 million in 1979, and $520
million in 1980 for the new Federal loan insurance program.
3
The 1977 Labor-HEW Appropriations Act -- which Congress
enacted over your veto -- did not contain funds for health
professions education activities because of a lack of
authorizing legislation. Funding for these programs was
included in the continuing resolution that the 94th
Congress recently passed. Under the resolution, funding
will stay at the 1976 level.
Detailed funding tables are in Paul O'Neill's memorandum
at Tab I.
Arguments in Favor of Approval
1. The stated objectives of H.R. 5546 are similar to
the Administration's objectives in that H.R. 5546 is
designed to shift the focus of Federal aid toward
increasing the number of primary care physicians and
addressing the problems of geographic and specialty mal-
distribution. Though different in approach, the capita-
tion, scholarship, special project and NHSC provisions
of H.R. 5546 direct Federal funds to institutions and
students agreeing to specialize in primary care fields
and serve in health shortage areas.
2. H.R. 5546 has broad bipartisan support in both
houses of Congress and, on balance, represents the best
bill that the Administration can obtain at this time.
It has taken Congress nearly two years to enact this legis-
lation; disapproval could result in a long delay in achieving
enactment of another health professions bill. Moreover,
depending on the make-up of the 95th Congress, the prospect
of achieving a bill closer to the Administration's proposal
is uncertain at best.
3. The conferees on H.R. 5546 deleted a number of
provisions which the Administration strongly opposed, e.g.,
requirements that HEW develop and establish licensure
standards for doctors and dentists, Federal licensing of
radiologic technicians, and Federal pre-emption of State
laws relating to physician training. This represents a
substantial concession toward the Administration's proposals.
4
4. Although H.R. 5546 contains a number of provisions
opposed by the Administration, HEW believes they will not
present insurmountable problems. Amendments can be sought
next year, if necessary, to modify or repeal the quota
provision relating to the admission of U.S. students attending
foreign medical schools. Also, it is possible that problems
stemming from the authorization "trigger" requiring full
funding of the scholarship program and the excessive appro-
priation authorization levels can be worked out with the
Appropriations Committees next year.
5. With respect to the National Health Service Corps,
disapproval of H.R. 5546 could be interpreted as retreating
from your commitment of substantially increased funding
of $25 million for 1977.
Arguments in Favor of Disapproval
1. While the objectives of H.R. 5546 are similar to
those of the Administration, the specific program
authorities and appropriation authorization levels are
almost universally at odds with the Administration's
specific proposals. You endorsed the concept of a sub-
stantial loan program, for example, as a way of enabling
the students -- rather than the general taxpayers -- to
finance those costs. H.R. 5546 provides the new loan program,
but also increases the general taxpayer subsidy through
the new programs and higher funding levels. All of the
major programs that you proposed for phase-out or termina-
tion are continued and expanded. A substantial number of
new narrow categorical programs are added and inappropriate
Federal regulatory authorities are imposed, e.g., quotas for
out-of-State enrollments and U.S. students from foreign
medical schools. These requirements raise serious equity
issues with respect to State institutions and out-of-
State residents.
2. While H.R. 5546 did have substantially bipartisan
support, it represents an undesirable direction for
Federal health professions programs. The next Congress
may feel differently when apprised of the basis for
disapproval. Moreover, the absence of authorizing legis-
lation for health professions programs in H.R. 5546 since
1974 enabled the Administration to hold funding at $298
5
million in 1976 compared to an actual level of $552 million
in 1974. Thus, the absence of authorizing legislation
has -- in the past -- resulted in actual appropriation levels
closest to the Administration's budget goals. For example,
under the continuing resolution in 1976, no funds were
appropriated for construction grants -- as the Administration
proposed.
3. While the conferees deleted a number of undesirable
provisions in the House and Senate versions, many such
provisions still remain. Moreover, approval of H.R. 5546
should be based on the provisions remaining --- not on the
potential adverse impact of provisions that might have
been included and might subsequently be included in a
revised bill presented to the President.
4. As the 1977 Labor-HEW appropriation bill veto
override demonstrates, HEW has had an exceedingly difficult
time in working successfully with Congress to attain
Administration funding levels, particularly when the
authorization levels are double those proposed in the
President's Budget.
5. The Administration commitment to NHSC is clear.
The Administration has, however, always considered the
NHSC program a demonstration program. The large and pro-
gressively increasing authorizations in H.R. 5546 -- $47
million in 1978, $57 million in 1979, and $70 million in
1980 -- will cause States and local communities --- as well
as some Federal agencies -- to view the direct provision of
medical care for health manpower shortage areas to be an
ongoing Federal responsibility. This view of the Federal
role would be reinforced by approval of H.R. 5546 which
contains new authority for HEW to make start-up, private
practice grants to former NHSC members.
Moreover, in allowing a specific medical facility -- in-
cluding a Federal medical facility, such as PHS hospitals ----
to be designated as a health manpower shortage area under
the NHSC program, the bill places HEW in the business
of staffing community or Federal hospitals. Thus,
communities and Federal agencies are encouraged to ignore
staffing problems in their hospitals and pressure HEW
to provide NHSC staff, as necessary.
6
6. Federal assistance to health professions schools
is not necessary to attract students. In many instances
health professions schools already turn away many
qualified applicants. For medical schools, for example,
there are three times as many qualified applicants as
there are spaces.
Staff and Agency Recommendations
Approval
HEW
Max Friedersdorf
Disapproval
OMB
CEA (Greenspan) - "We believe the President should disapprove
H.R.5546. It is inconsistent with the general Admin-
istration philosophy that while the Federal Government
should help students finance their medical education,
an increase in general taxpayer subsidies should be
avoided".
Counsel's Office (Kilberg) defers to OMB
Bill Seidman
Recommendation
I join with Paul O'Neill in recommending that you veto
H.R. 5546. Although the stated objectives of the bill
represent concerns of your Administration, and embodies
to a limited degree some Administration proposals, on
balance, the legislation is a prime example of overkill.
The excessive funding levels, the extended and new maze
of narrow categorical programs, the inappropriate Federal
requirements and the unwarranted quotas on the health
professions schools make this legislation an extensive
departure from the appropriate Federal role articulated
in your budget and legislative proposals.
7
Further, it is likely that stimulus that this measure
would give the production of health professionals would
in fact have a long run adverse affect on the current
medical cost crisis. This results from the large number
of professionals at all levels of the medical care system
who are responsible for creating demand and thereby
increasing utilization and costs. The carefully targeted
support of only necessary types of health professionals,
as the Administration originally proposed would correct
this problem.
Decision
Sign H.R. 5546 at Tab B
Approve signing statement at Tab C which has been
cleared by Doug Smith.
Approve
Disapprove
Veto H.R. 5546 and sign Memorandum of Disapproval at
Tab D which has been cleared by Doug Smith.
EXECUTIVE OFFICE OF THE PRESIDENT
CENTER
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
OCT 8 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 5546 - Health Professions
Educational Assistance Act of 1976
Sponsor - Rep. Rogers (D) Florida
Last Day for Action
October 13, 1976 - Wednesday
Purpose
Extends and expands through fiscal year 1980, with major
changes, authorities to provide financial support for
the education and training of physicians, dentists, and
other health professionals.
Agency Recommendations
Office of Management and Budget
Disapproval (Memorandum of
disapproval attached)
Department of Health, Education,
and Welfare
Approval (Signing statement
attached)
Department of State
Favors enactment
Department of Labor
No objection
Department of Justice
Defers to HEW
Veterans Administration
Defers to HEW
Department of Defense
Defers to HEW (Informally)
Department of the Treasury
Would support a veto
recommendation
Discussion
H.R. 5546 extends and substantially expands the number
of narrow categorical programs of support for the educa-
tion of health professionals. These programs, initiated
in a limited manner in the 1960's and expanded and broadened
by the Comprehensive Health Manpower Act of 1971, provide
Federal funds to medical, dental, and other health pro-
fessions schools through grants to institutions (i.e.,
capitation, construction, special project grants) and
2
student assistance. Authorizing legislation for these
programs expired June 30, 1974. Since that time, the
programs have been funded under a continuing resolution.
The House passed H.R. 5546 by a vote of 296-58 in July
1975. The Senate approved the bill one year later by a
vote of 88-0. The conference bill was approved in both
houses by voice vote.
The 1971 Health Manpower Act was designed to assist the
schools to increase the numbers of students enrolled,
in order to meet what was then perceived as a serious
aggregate shortage of health professionals. During the
subsequent 5 years, enrollments and graduates increased
dramatically, and further increases are anticipated over
the next few years.
Last year, the Department of Health, Education, and Welfare
(HEW) submitted Administration legislation to Congress
designed to shift the emphasis from Federal support merely
to increase enrollments to getting schools to address the
two most critical problems--geographic and specialty
maldistribution of physicians and dentists. The Adminis-
tration proposed to provide capitation grants to schools
agreeing to target their efforts on recruiting and training
primary care and family medicine health professionals,
and to medical and dental students agreeing to serve in
geographic areas experiencing critical shortages.
While the stated objectives of H.R. 5546 are similar to
those proposed by the Administration, the enrolled bill
differs greatly in its specific program authorizations
and funding levels from the HEW proposal. H.R. 5546
requires a significantly larger Federal role in health
professions education, places more Federal requirements on
the schools and provides less targeting of Federal funds.
A summary comparison of the major provisions of H.R. 5546
with the Administration's proposal is appended as an attach-
ment to the HEW enrolled bill letter. The principal
features of the bill compared to your proposals are
discussed below.
MAJOR PROVISIONS
Institutional support. The bulk of direct Federal funds
for health professions schools has been awarded through
two major grant programs--capitation assistance, i.e.,
an amount for each student enrolled, and special project
3
grant assistance. Both programs are continued by
H.R. 5546.
Capitation grants. The Administration bill proposed
to limit Federal capitation grants to $1,500 for each
student at medical, osteopathic, and dental (MOD) schools
agreeing to address physician distribution problems on
the grounds that they were the critical health professions
that warranted Federal funding for specialty and geographic
distribution efforts. Capitation for all other noncritical
health professions schools, i.e., veterinary medicine,
optometry, podiatry and pharmacy (VOPP) was to be phased
out within 3 years.
H.R. 5546 continues capitation for MOD schools at
$2,000 to $2,100 rather than $1,500, at rates ranging from
$695 to $1,450 for the non-critical VOPP schools, and
adds a new program of $1,400 per student at schools of
public health. The bill requires MOD schools to agree to
place more emphasis on developing primary care programs
and imposes an extensive array of other Federal require-
ments--not contained in the Administration's proposals--
on MOD and VOPP schools, as conditions of receiving
capitation, including:
-- a requirement that medical schools accept a
certain quota of U.S. students--as determined by the
Secretary of HEW--who have completed 2 years of study at
a foreign medical school;
-- mandatory enrollment increases of 5% (for schools
with over 100 first-year students) and at least 2.5%
or 5 students (for schools with fewer than 100 first year
students) in schools of veterinary medicine, optometry,
and podiatry, and public health schools;
-- a requirement that veterinary medicine schools
assure the HEW Secretary that "the clinical training of
the school shall emphasize predominatly care to food-
producing animals or to fibre-producing animals, or to
both types of animals," and a requirement that veterinary
medicine schools accept 30% out-of-State students;
-- a requirement that public optometry schools enroll
at least 25%, and nonprofit private optometry schools
at least 50%, of their students from out-of-State; and
4
-- a requirement that podiatry schools enroll at
least 40% of their students from out-of-State.
Other requirements stipulate the details of training
that osteopathy, dentistry and pharmacy students must
receive. In certain cases, waivers by the HEW Secretary
are permitted.
Special Project Grants. H.R. 5546 contains 24
separate narrow categorical authorities for special
project grants. The Administration proposed a single,
flexible special project grant authority, consolidating
the existing categories of financial distress, aid to
disadvantaged students, primary care residency programs
and allied and public health grants.
H.R. 5546 continues most of the programs proposed for
consolidation and adds several new narrow categorical funding
programs including:
-- area health education centers;
-- general internal medicine and general pediatrics
residencies and fellowships;
-- the education of American students returning from
foreign medical schools;
-- physician assistants, expanded function dental
auxiliaries and dental team practice;
-- occupational health training and education centers;
--- family medicine general practice dentistry depart-
ments; and
-- educational assistance to individuals from dis-
advantaged backgrounds.
In addition, H.R. 5546 stipulates in one of the
categorical grants 21 different project areas, ranging
from "health manpower development for the Trust
Territories" to "establishing humanism in health care
centers" and "the special medical problems related to
women.'
5
Construction grants. H.R. 5546 continues the appro-
priation authorizations for Federal construction grants,
loan guarantees, and interest subsidies, programs which
you proposed for termination. It also makes schools
of public health eligible for grant assistance. Your
proposal reflected HEW's conclusion that a marked
expansion in the number of health professionals was
not necessary and therefore construction subsidies--which
traditionally have been used to create additional
enrollment spaces--should be phased out.
Student assistance. H.R. 5546 expands loan and scholarship
programs for health professions students. Like the
Administration bill, H.R. 5546 continues the requirement
of Federal service for scholarship recipients. There are,
however, substantial differences from the Administration
proposal. For example, H.R. 5546:
-- makes scholarships available to all health pro-
fessions students, not just medical, osteopathic and dental
(MOD) students;
-- authorizes scholarship recipients to satisfy their
required service commitment by doing medical research;
-- provides for a pay-back penalty three times the
scholarship amounts plus interest if a scholarship
recipient fails to keep his commitment;
-- provides annual stipends of $4,800 per year
instead of the current level of $3,600, to be adjusted
each year along with Federal employees salaries, and
-- mandates funding at the full appropriation authoriza-
tions for the scholarship program if capitation grants to
MOD schools equal 75 percent of the appropriations authorized.
H.R. 5546 also continues the program of Federal capital
contributions to school student loan funds, a program
recommended for termination by the Administration. New
forms of student assistance authorized by H.R. 5546, but
not proposed by the Administration, include:
-- scholarships for students of exceptional need;
6
- assistance to disadvantaged individuals in allied
health training;
-- advanced allied health professions traineeships;
-- graduate health program traineeships; and
--- a new Lister Hill scholarship program for students
willing to practice family medicine in shortage areas.
The enrolled bill creates a major new health professions
student loan guarantee program and a student loan insurance
fund for health professions students. The amounts that the
Secretary of HEW could guarantee are $500 million in 1978,
$510 million in 1979, and $520 million in 1980. Under
the new program, the total and annual amounts that health
professions students can borrow under Federal guarantee
would be limited to $50,000 in total and $10,000 annually,
except for pharmacy students who would be limited to
$37,500 in total and $7,500 annually. The Federal Govern-
ment would insure 100% of the loans plus interest--on a
"full faith and credit of the United States" basis.
The loans could not bear an interest rate in excess of
10%, and the Secretary of HEW would be authorized to
charge annual insurance fees not to exceed 2%.
If students subsequently agree to service in the National
Health Service Corps or in private practice in an area
approved by the Secretary, the Federal Government would
repay the student's loan at a rate not to exceed $10,000
a year. In order for students to be eligible for these
loans, however, the institutions they attend must agree to
the full range of capitation grant conditions as briefly
discussed above. Moreover, only 50% of the MOD students
in each class at any one institution can receive loans.
While the Administration favors the concept of encouraging
health professions students to finance their training,
particularly in light of their relatively high income
expectations, no specific Administration proposals were
made. Moreover, many of the specific provisions are
inconsistent with Administration policy, e.g., the 10%
limit on interest, the 100% Federal insurance exposure
for principal and interest, and the absence of a requirement
that private financing for loans is not otherwise available,
(inorder to minimize unnecessary Federal involvement in
credit markets).
7
Foreign medical graduates. H.R. 5546 requires alien
physicians to pass parts I and II of the National Board
of Medical Examiners and to be competent in oral and
written English before they can immigrate to the United
States. In addition, it tightens the requirements for
participation by alien physicians in the exchange visitor
program. The Administration has opposed the bill's require-
ments regarding immigration of alien physicians, but has
supported the changes in the exchange visitor program.
National Health Service Corps (NHSC). The Administration
proposed a limited number of changes in the National
Health Service Corps program authorities. These included:
-- one-time grants to communities of up to $10,000
to assist them in defraying the initial costs of establish-
ing medical practices;
-- authorizing HEW to transfer Federal equipment and
supplies at NHSC sites to a community; and
-- allowing the communities with NHSC sites to retain
some of the fees to repay a community's investment in
developing the site.
H.R. 5546 goes substantially beyond the minimal changes
proposed by the Administration, including a complete re-
write of NHSC authorities. Among the new provisions are
amendments to:
-- increase the salary of Corps members for the first
3 years of service to a level comparable to that of
private practitioners (but by not more than $1,000 a
month),
-
-- guarantee that the income of a Corps member stays
at least at the same level as in the last month of his
initial 36 months of NHSC service,
--- expand significantly the current definition of
"health manpower shortage areas" to include urban areas;
population groups that are underserved; private, nonprofit
or public facilities including Federal facilities (e.g.,
PHS hospitals), that the Secretary of HEW determines have
a shortage,
8
-- authorize the HEW Secretary to award former NHSC
members grants of $12,500 or $25,000 for one or two
years' previous service, respectively, to establish practices
in areas approved by the Secretary,
-- require that areas with the greatest shortages
be given priority in the assignment of NHSC personnel,
and
-- modify the current authority for assistance in
starting NHSC practices from one for a $25,000 grant to
one for a $50,000 loan.
Financing. The table below contains a summary comparison
of the appropriation authorizations provided by H.R. 5546
with the amounts requested in your 1977 Budget and proposed
in the Administration bill. The table at Attachment A
shows the amounts authorized for each program in H.R. 5546.
For fiscal year 1977, H.R. 5546 authorizes $638 million,
$330 million more than the amounts you proposed, as shown
in the following summary table:
($ in millions)
1977
1978
1976
H.R.
H.R.
Actual
Budget
5546
5546
Construction
2
-0-
127
42
Capitation grants
101
120
163
220
Special projects
98
128
201
195
Student assistance
82
35
113
161
National Health
Service Corps
15
25
34
47
Total
298
308
638
665
The 1977 Labor-HEW Appropriations Act--which Congress
enacted over your veto--did not contain funds for health
professions education activities because of a lack of
authorizing legislation. Funding for these programs was
included in the continuing resolution that the 94th
Congress recently passed. Under the resolution, funding
will stay at the 1976 level.
9
In addition to the appropriations authorizations above,
H.R. 5546 authorizes loan authority of $500 million in 1978,
$510 million in 1979 and $520 million in 1980 for the
new Federal loan insurance program.
Arguments in Favor of Approval
1. The stated objectivesof H.R. 5546 are similar to
the Administration's objectives in that H.R. 5546 is
designed to shift the focus of Federal aid toward
increasing the number of primary care physicians and
addressing the problems of geographic and specialty mal-
distribution. Though different in approach, the capita-
tion, scholarship, special project and NHSC provisions
of H.R. 5546 direct Federal funds to institutions and students
agreeing to specialize in primary care fields and serve
in health shortage areas.
2. H.R. 5546 has broad bipartisan support in both
houses of Congress and, on balance, represents the best
bill that the Administration can obtain at this time.
It has taken Congress nearly two years to enact this legis-
lation; disapproval could result in a long delay in achieving
enactment of another health professions bill. Moreover,
depending on the make-up of the 95th Congress, the prospect
of achieving a bill closer to the Administration's proposal
is uncertain at best.
3. The conferees on H.R. 5546 deleted a number of
provisions which the Administration strongly opposed, e.g.,
requirements that HEW develop and establish licensure
standards for doctors and dentists, Federal licensing of
radiologic technicians, and Federal pre-emption of State
laws relating to physician training. This represents a
substantial concession toward the Administration's proposals.
4. Although H.R. 5546 contains a number of provisions
opposed by the Administration, HEW believes they will not
present insurmountable problems. Amendments can be sought
next year, if necessary, to modify or repeal the quota
provision relating to the admission of U.S. students attending
foreign medical schools. Also, it is possible that problems
stemming from the authorization "trigger" requiring full
funding of the scholarship program and the excessive appro-
priation authorization levels can be worked out with the
Appropriations Committees next year.
10
5. With respect to the National Health Service Corps,
disapproval of H.R. 5546 could be interpreted as retreating
from your commitment of substantially increased funding
of $25 million for 1977.
Arguments in Favor of Disapproval
1. While the objectives of H.R. 5546 are similar to
those of the Administration, the specific program
authorities and appropriation authorization levels are
almost universally at odds with the Administration's
specific proposals. You endorsed the concept of a sub-
stantial loan program, for example, as a way of enabling
the students--rather than the general taxpayers--to
finance those costs. H.R. 5546 provides the new loan program,
but also increases the general taxpayer subsidy through
the new programs and higher funding levels. All of the
major programs that you proposed for phase-out or termina-
tion are continued and expanded. A substantial number of
new narrow categorical programs are added and inappropriate
Federal regulatory authorities are imposed, e.g., quotas for
out-of-State enrollments and U.S. students from foreign
medical schools. These requirements raise serious equity
issues with respect to State institutions and out-of-
State residents.
2. While H.R. 5546 did have substantially bipartisan
support, it represents an undesirable direction for
Federal health professions programs. The next Congress
may feel differently when apprised of the basis for
disapproval. Moreover, the absence of authorizing legis-
lation for health professions programs in H.R. 5546 since
1974 enabled the Administration to hold funding at $298
million in 1976 compared to an actual level of $552 million
in 1974. Thus, the absence of authorizing legislation
has--in the past--resulted in actual appropriation levels
closest to the Administration's budget goals. For example,
under the continuing resolution in 1976, no funds were
appropriated for construction grants--as the Administration
proposed.
3. While the conferees deleted a number of undesirable
provisions in the House and Senate versions, many such
provisions still remain. Moreover, approval of H.R. 5546
should be based on the provisions remaining--not on the
11
potential adverse impact of provisions that might have
been included and might subsequently be included in a
revised bill presented to the President.
4. As the 1977 Labor-HEW appropriation bill veto
override demonstrates, HEW has had an exceedingly difficult
time in working successfully with Congress to attain
Administration funding levels, particularly when the
authorization levels are double those proposed in the
President's Budget.
5. The Administration commitment to NHSC is clear.
The Administration has, however, always considered the
NHSC program a demonstration program. The large and pro-
gressively increasing authorizations in H.R. 5546-$47
million in 1978, $57 million in 1979, and $70 million in
1980-will cause States and local communities--as well
as some Federal agencies--to view the direct provision of
medical care for health manpower shortage areas to be an
ongoing Federal responsibility. This view of the Federal
role would be reinforced by approval of H.R. 5546 which
contains new authority for HEW to make start-up, private
practice grants to former NHSC members.
Moreover, in allowing a specific medical facility--
including a Federal medical facility, such as PHS hospitals--
to be designated as a health manpower shortage area under
the NHSC program, the bill places HEW in the business
of staffing community or Federal hospitals. Thus,
communities and Federal agencies are encouraged to ignore
staffing problems in their hospitals and pressure HEW
to provide NHSC staff, as necessary.
6. Federal assistance to health professions schools
is not necessary to attract students. In many instances
health professions schools already turn away many
qualified applicants. For medical schools, for example,
there are three times as many qualified applicants as
there are spaces.
Recommendations
HEW recommends your approval of H.R. 5546 in its enrolled
bill letter, stating:
12
"Although H.R. 5546 differs in a number of respects
from the Administration's proposals, the principal
program objectives set forth by the Administration
would in large measure be carried out
If
the
bill is allowed to die, we believe it is doubtful
that a measure more favorable to the Administra-
tion's position could be enacted in the next
Congress."
The Departments of Justice, Treasury and Labor identify
concerns that they have with specific provisions of the
bill, although they do not recommend disapproval. Justice,
in particular, points out that the section requiring
medical schools, as a condition of receiving grant funds,
to admit a certain number of U.S. students from foreign
medical schools "is almost certain to generate litigation
to which the United States will be a party." Justice
also points out that Congress at the same time "also
enacted section 408 of S. 2657, proposed Education
Amendments of 1976, which would amend the General Education
Provisions Act to make it unlawful for the Secretary to
defer or limit any Federal education financial assistance
on the basis of a school's failure to comply with student
admission quotas."
We believe that H.R. 5546 should be disapproved. In its
entirety, H.R. 5546 does not carry out "in large measure"
Administration objectives. On the contrary, it represents
an extensive departure from the appropriate Federal role
articulated in your budget and legislative proposals. It
contains excessive funding levels, a new maze of narrow
categorical program authorities, inappropriate Federal
requirements and unwarranted quotas on the health profes-
sions schools. We believe that your public disapproval
and the reasons therefor can substantially influence the
next Congress.
A draft memorandum of disapproval is attached for your
consideration.
Paul H. O'Neill Ohein
Acting Director
Enclosures
Attachment A
Comparison of the H.R. 5546 with the Administration Proposal
($ in millions)
1976
1977
H.R. 5546
Appro-
President's
priation
Budget
H.R. 5546
1978
1979
1980
Construction:
--
103
40
40
40
--
Grants
2
--
24
2
3
3
Interest subsidies
Capitation:
83
113
134
177
186
197
MOD
18
7
29
33
33
34
VOPP
--
10
11
11
--
--
*Public health
Special projects:
128
--
--
--
--
Consolidated Grant
--
*Start-up, financial distress
interdisciplinary training and
--
41
25
25
25
--
curriculum development
*Graduate programs in health
--
--
3
4
4
administration
--
3
5
---
--
--
-
Start-up and conversion
5
--
--
--
5
--
Financial distress
---
--
20
30
40
*Area health education centers
--
Health manpower education
41
--
--
--
initiatives
38
--
*Recruitment of disadvantaged
--
20
20
20
--
--
students
15
39
--
--
--
Family medicine training
*Family medicine and general
-
--
40
45
50
dentistry
-
*U.S. student transfers from
2
2
3
4
--
--
foreign medical schools
*Physician assistants and dental
--
25
30
35
--
--
auxiliaries
*Public health and graduate
programs in health adminis-
--
--
5
5
6
tration
--
*Occupational health training
--
5
5
8
10
and educational centers
--
--
--
10
15
20
*Family medicine departments
---
*Gencral internal medicine and
10
15
20
25
--
--
pediatric residencies
2
--
2
2
--
*New medical schools
--
15
--
--
--
--
Computer technology
--
11
--
11
--
---
--
Allied health special improvement.
Allied health recruitment
**
**
1
1
1
--
14
--
15
--
--
--
Allied health R&D
--
22
24
26
--
---
Allied health projects
6
--
--
--
Public health schools formula grants
6
--
Public health school project awards
6
6
-
--
--
--
Student assistance:
Capital contributions to school
24
--
39
26
27
28
loan funds
--
2
2
2
--
*Federal loan insurance fund
--
--
16
17
18
--
---
*Scholarships for needy students.
National health service corps
22
40
75
140
200
35
scholarships
Federal repayment of student
**
**
**
**
6
--
loans
--
--
--
Health professions scholarships.
4
--
--
9
--
10
8
8
9
Public health traineeships
3
3
3
--
*Graduate health traineeships
--
4
5
5
5
Allied health traineeships
4
--
*Assistance to disadvantaged
individuals in allied health
---
1
1
1
--
--
training
25
--
13
--
20
-
Nurse traineeships
**
**
**
**
--
*Lister Hill scholarships
--
15
25
34
47
57
70
National Health Service Corps
*Private practice grants to former
**
**
**
**
--
--
NHSC members
298
308
638
665
765
889
Total authorizations
500
510
520
--
--
--
*Guarant:ed loan authority
*New programs
**Entitlement, "such surs" or less
than $1 million
C
Today I am signing legislation which will materially assist
in insuring that all Americans throughout the country will
have sufficient access to physicians and dentists. Last
year the Administration submitted to Congress a legislative
proposal based on findings which showed that while there was
no longer a shortage in the total number of physicians in
the United States, there were alarming signs that this
country was facing two growing problems with respect to
There are
these practitioners. These were not enough doctors in rural
there is
and inner city areas, and a continuing decline in the number
of doctors practicing primary care, i.e., the problem of
specialty maldistribution.
I am pleased that the bill before me specifically addresses
those issues which we identified as being of greatest concern.
Although the bill contains some undersirable features, I
believe that, on balance, it represents a definite step
toward improving health care delivery, and, accordingly,
warrants my signature.
There are several provisions of this legislation which will
be instrumental in solving the problems of geographic and
specialty maldistribution. The bill continues and expands a
scholarship program which will provide individuals with
financial assistance to attend medical school. In exchange
for these scholarships, each recipient will be required to
serve in a health manpower shortage area for a period of at
least two years. Coupled with this scholarship program, the
bill authorizes the establishment of a Federal program of
insured loans--a proposal I have supported--to assist health
professions students. This program virtually assures that
no individual will be denied a medical education for financial
reasons. Also the bill establishes a program of special
assistance to disadvantaged students in an effort to equalize
opportunities among all individuals who wish to become
health professionals.
- 2 -
In order to deal with the problem of specialty maldistribu-
tion and increase the number of doctors who deliver primary
care, the bill authorizes the continuation of the existing
program of financial support to health professions schools
through capitation grants. However, a significant new
condition is attached to the receipt of these grants.
would require / medical schools 1 to provide annually an increas-
would be required
ing percentage of residency positions for individuals in
primary care specialties (i.e., pediatrics, internal medicine
and family medicine).
The bill authorizes funding for numerous special projects
relating to the education and training of physicians and
allied health personnel. Special grants are authorized for
programs in family medicine and the general practice of
dentistry. In addition, grants for programs for the training
of physician extenders and expanded function dental auxiliaries
were authorized. Such programs are designed to enhance the
overall capacity of physicians and dentists to deliver
health care.
Finally, the bill revises and extends the existing National
Health Service Corps Program--a program which has made
significant strides in alleviating the problem of inacces-
sibility to health care services in medically underserved
areas. This program currently has more than 600 professionals
working in shortage areas. It is estimated that by next
year, this number will grow to almost 700. And, with the
authorizing legislation before me now, we expect the capabil-
ities of this program to increase dramatically during the
following three years.
As I noted, however, the bill is not without some, defects. faults
Because I am particularly concerned about the potential
impact of some of these troublesome provisions, I intend to
submit legislative recommendations to remedy these problems
as soon as the Congress returns.
CRALD R.FORD
- 3 -
Primarily, these concerns relate to the levels of spending
authorized by the legislation, provisions which deal with
medical school admission requirements for Americans returning
from foreign medical schools, and payback conditions for
students who do not fulfill their obligations under the
National Health Service Corps scholarship program. I am
convinced that the authorization levels attached to this
program are excessive. I believe that the desired results
can be attained at a much lower cost. I particularly object
to the provision which creates an automatic funding "trigger"
for the scholarship program and which penalizes other programs
authorized in the bill if certain scholarship funding levels
are not met. Not only does this provision impose unwarranted
sanctions, but it distorts the entire Congressional appropria-
tions process.
Furthermore, I have reservations about the capitation
condition which requires medical schools to accept a certain
number of American citizens who have been students in foreign
medical schools and who meet certain criteria. Not only
does this requirement potentially create administrative
problems, but, equally as important, it undermines our
medical schools' admission policies by imposing Federal law
to override an individual school's admission criteria.
Finally, I object to the unduly harsh penalties assigned to
those scholarship recipients who fail to fulfill their
service obligation in the National Health Service Corps.
With respect to these people, the bill requires them to pay
back three times the amount of the scholarship, plus interest
(with adjustment for any portion of a service obligation
performed), within one year of the breach of this obligation.
In my view, a penalty of twice the amount provided, plus
interest, would be more than sufficient.
- 4 -
As I indicated earlier, I plan to recommend action to remedy
these problems as soon as Congress reconvenes. Despite the
drawbacks of the bill, however, I believe this legislation
is necessary. Many of the programs which are contained in
this bill have been without authorizing legislation since
June 1974. Furthermore, the bill addresses the important
problems which we identified last year. In weighing all of
these factors, I believe that it is in the best interest of
the American people to sign this measure into law.
2
VETO STATEMENT
memorandum 8 Disapproval
I have withheld my signature from H. R. 5546, the "Health
Professions Educations Assistance Act of 1976."
This I have done reluctantly. I realize the need to solve the
geographic and specialty maldistribution of primary care health
that of
professionals, especially physicians and dentists, and I proposed
1
legislation to the Congress which would have targeted Federal funding
to do so.
The Congress, however going its own way as usual, has distorted
these straightforward objectives by enacting H.R. 5546 which would
add substantially to the already complex array of Federal programs
and funding levels.
This is especially disappointing at a time when scarce Federal
resources must be managed effectively to maximize their impact in
the areas of most need. This is especially true in the health care area
where costs are increasing annually at twice the rate of the rate of the
Consumer Price Index.
Tough choices are essential so that the taxpayers' dollars can be
allocated to those programs where the American people can expect
the greatest payoff in their health resources.
H.R. 5546 would, for example, add some 20 new narrow
categorical authorities to the existing maze of nearly 150 HEW health
programs, many of which I recommended be reformal consulidated.
because of their conflicting aims and priorities. While I am trying to
streamline government, the Congress continues to make it more complex.
While I am attempting to make government serve the needs of people,
insists that
the Congress makes people and their institutions serve the whims of
government.
-2-
New regulatory authority would require the Secretary of HEW
to establish quotas for individual medical schools in this country,
making them accept a quota of students who transfer from foreign
medical schools. The bill also stipulates the precise percentage
quotas of out-of-State students that schools of veterinary medicine,
optometry and podiatry must accept in order to receive Federal
subsidies. This would be a Federal law that could result in requiring
the residents of one State to subsidize the education of residents of
other States in order to receive Federal funds. i Students at these
institutions would not be eligible for the new Federally insured loan
program contained in H.R. 5546 unless their institutions accept
conditions such as out-of-State quotas. These are but a few examples
of the new Federal interference in medical school administration that
that
H.R. 5546 would require. I believe unwarranted Federal intrusions
are
such as this tabe inappropriate.
In addition, this bill would authorize expenditures that are double
those anthorizedin Q\Y 1976 and orproposedby for
my budget 1977. I have consistently opposed
such unwarranted expansion of the Federal Government's responsibilities,
particularly in the absence of compelling evidence that non-Federal
institutions cannot accomplish their stated objectives. I have already
proposed responsible funding levels and an appropriate Federal role --
without excessive Federal requirements and without Federal subsidies
for every health professions school -- in addressing the problems of
geographic and specialty maldistribution of the most critical health
professions. There are ample numbers of student applications to
health professions schools. H.R. 5546 cannot be justified as being necessary
to attract individuals to these schools.
GERALD FORD LISRA
-3-
H.R. 5546 goes far beyond the responsible Federal role of
supporting only those initiatives that can be best accomplished by
government for the public benefit. I will continue to make every
effort to assist in the production fraining of necessary and appropriate health
professionals to meet the basic health needs of all Americans,
regardless of geographic location or social status.
THE WHITE HOUSE
ACTION
WASHINGTON
Last Day: October 13, 1976
October 12, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
JIM CANNO Jan
SUBJECT:
Enrolled Bill S. 2657 -
Education Amendments of 1976
This is to present for your action S. 2657, Education
Amendments of 1976.
Background
S. 2657 is an omnibus education bill which amends and
extends the Higher Education Act of 1965, the Vocational
Education Act of 1963, and numerous other education
programs and authorities, some of which expired on
September 30, 1976. The bill extends most higher education
programs through 1979 and vocational education programs
through 1977. All of the programs provided for in S. 2657
are currently covered by the Continuing Resolution.
S. 2657 incorporates many of the provisions recommended
by the Administration, but also includes amendments which
will greatly increase the complexity and cost of adminis-
tering Federal education programs.
The Administration's proposals were designed to:
- Provide higher education student assistance
through direct aid rather than through
institutionally-based programs.
- Curb fraud and abuse in higher education student
assistance programs.
- Eliminate unnecessary higher education programs.
2
- Reform Impact Aid to provide funding only
for "A" children and special categories.
- Simply extend the Emergency School Aid
legislation with expanded discretionary
authority.
- Consolidate vocational education programs
and include them as a title under the
proposed Financial Assistance for Elementary
and Secondary Education (block grant) Act.
- Provide for reasonable authorization levels.
While sharing some of the objectives of the Administra-
tion's bill, S. 2657 differs in its approach in that it:
- Imposes significantly increased Federal
requirements on higher and vocational
education programs.
- Requires the Administration to fund programs
that neither the Congress nor the Administration
have sought to fund in recent years.
- Establishes several new categories of programs
and authorizes funding levels substantially
in excess of those proposed by the Administration.
Additional discussion of the provisions of the enrolled
bill is provided in OMB's enrolled bill report at Tab A.
The Conference Report was approved by the House by a
vote of 312-93 and by a 67-15 vote in the Senate.
Budget Impact
Authorization Levels. Authorizations under current law
for 1976 are $7.2 billion. Authorization levels in the
bill total $6.6 billion in 1977, $8.2 billion in 1978
and $8.4 billion in 1979.
OMB believes that outlays from Congressional appropria-
tions will be about $188 million more than your budget
in fiscal year 1977, about $1.1 billion more in 1978 and
$1.6 billion more in 1979.
3
HEW points out that, of the increase of $1.6 billion in
1979 outlays, over $600 million would be incurred under
the Continuing Resolution, regardless of action on this
bill. This amount reflects current programs which the
Administration proposed to terminate, but which are,
nevertheless, covered by the Continuing Resolution. HEW
further believes that the incremental outlay effect of
S. 2657 in 1979 is lower in terms of probable Congres-
sional action. OMB, however, believes that their estimates
reflect a realistic assessment of future Congressional
action based upon previous Congressional appropriations
in this area.
Arguments for Approval
1. The guaranteed student loan provisions. The Congress
has accepted Administration recommendations that
should help curb fraud and abuse in this program.
Also, partial acceptance of the Administration's
request to raise the amount graduate students may
borrow should assist students in high cost graduate
programs. Incentives to increase State participa-
tion in the loan program were added.
2. The vocational education provisions have moved
substantially in the direction of consolidation of
programs recommended by the Administration. While
not all the Administration sought, this bill contains
important first steps in consolidation and simplifi-
cation of vocational education programs and represents
a good base for further consolidation.
3. The degree of Congressional support for this bill
is evidenced by the votes of both the Senate and the
House.
4. The bulk of the technical amendments to the Education
Amendments of 1974 which the Administration recommended
are incorporated in this bill.
5. Notwithstanding the significant authorization levels
in this bill, traditionally there has been a gap
between actual appropriations and authorization levels.
4
Arguments in Favor of Disapproval
1. The Basic Educational Opportunity Grants provisions
could increase the cost of the fully funded program
in fiscal year 1978 from the currently estimated.
$1.8 billion to $2.5 billion. If the $1800 maximum
award proposal was adopted and the Administration
proposed a basic grant funding level of $1.8 billion,
which would fully fund the basic grant program with
a $1400 maximum award, but not at $1800, the lowest
income students would have their awards reduced by
an average of over $100. This would occur because
more funding would have to be diverted to a larger
number of middle-income and upper middle-income
students. The Administration has always supported
a fully-funded basic grants program. However, this
provision will require appropriations far in excess
of those currently available or projected for higher
education student assistance programs. This may
require a reassessment of the full funding policy.
2. The funding trigger for higher education is expected
to force appropriations for programs that the
Congress has not funded for several years, of $150
million in 1978 and $215 million in 1979. Further-
more, if the assumption is made that a policy of full
funding of basic grants is adopted, and that funding
levels for other programs follow recent trends, then
in combination with the trigger, the higher education
budget (excluding the guaranteed loan program) would
exceed $4.0 billion in 1978. This compares to an
Administration request for higher education of $1.9
billion for 1977.
3. Several of the changes made in the guaranteed student
loan program can be implemented administratively,
without changes in current law. Furthermore, there
are provisions that will make the program signifi-
cantly more complex and difficult to administer.
4. Notwithstanding, the consolidations contained in the
vocational education programs, this bill establishes
new categorical programs and imposes planning and
other burdensome administrative requirements that
negate the positive effects of the consolidations.
5
5. The bill mandates restrictive administrative structures
and procedures, including the creation of new programs
and bureaucracies; hold-harmless provisions which
delay reform under programs consolidated under the
Education Amendments of 1974; maintenance of effort
provisions; new advisory bodies which duplicate the
responsibilities of the National Council for Educational
Research in the National Institute of Education; and
16 new narrow categorical programs which seriously
detract from your efforts to move program decisions
toward State and local education agencies and away
from Washington bureaucracies. In addition, the bill
adds more complex provisions that will impose adminis-
trative burdens on both the administering agencies and
grant recipients.
Agency Recommendations
The Department of Health, Education, and Welfare, and the
Department of Labor recommend approval. The Department of
Justice and the Veterans Administration defer to the Depart-
ment of Health, Education, and Welfare. OMB recommends
disapproval.
Staff Recommendations
Approval
Max Friedersdorf
Jeanne Holm - "The Vocational-Education Amendments to
increase the state sensitivity to the issue of sex bias
and sex stereotyping in vocational education provisions
are important to increasing vocational-education oppor-
tunities for women. "
Bill Seidman
Disapproval
CEA (Greenspan) - "We agree with OMB assessment of S.2657
both because of its budgetary impact and its inconsistency
with previous Administration initiatives."
Counsel's Office (Kilberg)
6
I recommend approval because the positive factors of
S. 2657 outweigh the negative ones. In fact, the
increase of the Basic Educational Opportunity Grant
ceiling from $1400 to $1800, which OMB identifies as
one of the two most objectionable facets of S. 2657,
could be a positive one in view of your commitment to
ease the financial burden on middle-class families
sending a child to college. Over 150,000 families
with incomes above $15,000 are expected to be made
eligible for Basic grants by such an increase in the
maximum grant, and raising the maximum grant to $1800
does not commit the Administration to full-funding of
the BEOG program at that level.
The legislation takes positive and needed steps to
reduce the incidence of student and institutional
abuse of Federal student assistance programs. Many of
these changes, particularly in the Guaranteed Student
Loan program, were Administration initiatives.
Small but positive steps are taken in S. 2657 to in-
crease the State's role in higher education. Incentives
for State creation and continuance of Guaranteed Student
Loan agencies are included as well as an experimental
program to consolidate at the State level the application
process of State and Federal student grant programs.
Principally as a result of Al Quie's efforts, significant
steps toward consolidation are achieved in the Vocational
Education section of S. 2657. Three State programs and
three federally administered programs, each separately
authorized, would replace ten existing Federal and State
programs. The concepts of consolidation and Block grants
were accepted in a limited fashion, but this could be
the first step in winning Congressional approval of your
Block Grant proposals for elementary and secondary educa-
tion. The worst elements of S. 2657 are readily succep-
tible to corrective legislation in the next Congress, and
the proposed signing statement (Tab C) announces your in-
tention to offer legislation to perfect S. 2657.
-7-
Decision
Sign S. 2657 at Tab B.
Approve signing statement at Tab C which has been
cleared by Doug Smith.
Approve
Disapprove
Veto S. 2657 and sign Memorandum of Disapproval at Tab D
which has been cleared by Doug Smith.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
OCT 8 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill S. 2657 - Education Amendments
of 1976
Sponsor - Sen. Pell (D) Rhode Island
Last Day for Action
October 13, 1976 - Wednesday
Purpose
Extends and makes major revisions in the Higher Education
and Vocational Education Acts, the Basic Education
Opportunity Grant (BEOG), Guaranteed Student Loan (GSL),
and other education programs.
Agency Recommendations
Office of Management and Budget
Disapproval (Memorandum
of disapproval attached)
Department of Health, Education,
and Welfare
Approval
Department of Labor
Approval
Department of Justice
Defers to HEW
Veterans Administration
Defers to HEW
Department of the Treasury
No recommendation
Discussion
S. 2657 is an omnibus education bill which amends and
extends the Higher Education Act of 1965, the Vocational
Education Act of 1963, and numerous other education
programs and authorities, some of which expired on
September 30, 1976. The bill extends most higher education
programs through 1979 and vocational education programs through
1977. All of the programs provided for in S. 2657 are
currently covered by the Continuing Resolution. This bill
is the congressional response to major Administration
initiatives for reform of education programs.
2
S. 2657 incorporates many of the provisions recommended
by the Administration, but also includes amendments which
will greatly increase the complexity and cost of
administering Federal education programs.
The Administration's proposals were designed to:
-- provide higher education student assistance
through direct aid rather than through institutionally
based programs,
--- curb fraud and abuse in higher education student
assistance programs,
-- eliminate unnecessary higher education programs,
--- reform Impact Aid to provide funding only for
"A" children and special categories,
-- simply extend the Emergency School Aid legisla-
tion with expanded discretionary authority,
--- consolidate vocational education programs and
include them as a title under the proposed Financial
Assistance for Elementary and Secondary Education (block
grant) Act,
-- provide for reasonable authorization levels.
While sharing some of the objectives of the Administration's
bill, S. 2657 differs in its approach in that it:
-- imposes significantly increased Federal require-
ments on higher and vocational education programs,
---- requires the Administration to fund programs that
neither the Congress nor the Administration have sought
to fund in recent years,
--- establishes several new categories of programs,
and authorizes funding levels substantially in excess of
those proposed by the Administration.
A comparison of the major provisions of S. 2657 with current
law is set forth below. A more detailed summary is included
as an attachment to the enrolled bill letter from HEW.
The Conference Report was approved by the House by a vote
of 312-93 and by a 67-15 vote in the Senate.
3
Major Provisions
Higher Education Provisions
Basic Educational Opportunity Grants. Under current
law, grants up to $1,400 are awarded to students attending
eligible higher education institutions after deducting
the amount the family is expected to contribute and other
funds available to the student. The grant can be no more
than one half the cost of attending school. The expected
family contribution is based on the family's adjusted
gross income minus employment and subsistence expenses, as
well as some asset deductions, such as home equity.
Current law also requires that no funds can be spent for
basic grants until appropriations for Supplemental
Educational Opportunity Grants, College Work Study and
National Direct Student Loans, all campus-based programs,
reach $653 million.
The Administration proposed to eliminate the minimal funding
requirements for the campus-based programs, change the
formula so that half of need rather than half of cost would
be the basis for computing the basic grant, include 50%
of veterans education benefits in determining student
resources, and change the formula for reducing awards when
the appropriation is less than required for full funding
so that awards would be more intensively targeted on low
income students. None of these changes is included in
S. 2657.
S. 2657 increases the maximum basic grant award to $1,800,
effective in fiscal year 1978. It also provides more generous
offsets by allowing the deduction of elementary and
secondary education expenses of dependents in determining
expected family contributions.
New funding "trigger". The enrolled bill establishes
a funding trigger mechanism effective in fiscal years 1978
and 1979 only. The trigger provides that when the combined
appropriations available for fiscal year 1978 for Basic
Educational Opportunity Grants, Supplemental Educational
Opportunity Grants, College Work Study and National Direct
Student Loans exceed $2.8 billion ($3.1 billion in 1979),
funds must be appropriated for the following programs:
-- Title I: community service, continuing education,
lifelong learning,
FORD is LIBRARY
4
-- Title VII: loans for the construction, reconstruc-
tion, and renovation of academic facilities,
--- Title X: establishment and expansion of community
colleges.
The Administration has not requested funds for the programs
involved in the funding trigger and Congress has appro-
priated only an average of $15 million annually for these
program areas over the last four to five years. Furthermore,
the Administration has consistently maintained that these
institutional assistance programs are ineffective relative
to direct student assistance, are a State and local
responsibility, and cannot be justified on the basis of any
pressing national priority.
Guaranteed Student Loan Program. Under current law,
the Office of Education guarantees loans to students at
eligible institutions and reinsures loans guaranteed by
State and nonprofit agencies at 80% of the amount defaulted
by student borrowers. Undergraduates can borrow up to
$7,500 and graduates may borrow up to $10,000.
S. 2657 provides for changes in the Guaranteed Student
Loan program in order to induce greater lender participa-
tion, provide incentives for States to establish their
own guarantee agencies which would be reinsured by the
Federal Government, and to make more loan capital available
to students. These objectives are consistent with prior
Administration proposals.
Among the provisions aimed at achieving these objectives
are:
--- New State or private nonprofit guarantee agencies
will be reinsured by the Federal Government at 100% during
the first five years of operation.
- State or nonprofit private agencies, if they
enter into a supplemental agreement with the Commissioner
of Education, will be reinsured by the Federal Government
according to their default rate experience in any given
year. In this way, good State default rate performances
are rewarded.
5
--- The supplemental agreement, which is a condition
of higher reinsurance rates, would require State and
private guarantee agencies to (1) authorize higher individual
and aggregate loan limits; (2) insure all insurable loans
at 100%; (3) provide for the insurance of loans to part-
time students; (4) insure loans to its own residents going to
out-of-State schools; (5) provide the same conditions on
eligible residential institutions as are now in the direct
Federal student loan insurance program.
--- The general limits for the guarantee program are
increased for graduate or professional students who may
borrow up to $5,000 per year, with the aggregate loan
amounts for such students increased to $15,000 (including
undergraduate loans).
Anti-fraud and abuse provisions. In addition to the
provisions designed to make the direct Federal guarantee
and Federal reinsurance programs work more effectively,
there are a number of provisions designed to reduce defaults
and to curb fraud and abuse generally in the student
assistance programs.
With respect to defaults, the provisions dealing with re-
insurance rates tied to guarantee agency performance are
designed to reduce the overall default rate. Other pro-
visions designed to reduce abuse or fraud include the
following:
--- Guaranteed student loans shall not be dischargeable
in bankruptcy until five years after the start of the repay-
ment period, except in cases of unusual hardship as determined
by the courts.
---- Any school lender that has a default rate of 15%
or more for two consecutive years is excluded from
participation, as is any school that employs or uses
commissioned salesmen to promote the availability of
the loan program at that school.
-- Home-study schools are excluded as lenders, as
are lenders whose primary function is the making or holding
of guaranteed loans.
-- Criminal penalties are provided for embezzlement,
misapplication, theft, or obtaining by fraud of funds, assets
or other property provided or insured under the guaranteed
loan authority.
6
--- The existing statutory authority under the GSLP
to limit, suspend, or terminate the eligibility of
institutions for violating or failing to carry out the
provisions of law or regulations issued thereunder is now
extended to apply to all student aid programs.
Liberalization of eligibility. Another general
characteristic of S. 2657 is the inclusion of middle income
students in needs-based programs traditionally intended for
low income and disadvantaged students. The effect of
raising the maximum BEOG award ceiling to $1,800 is to
increase participation of students from families making more
than $15,000 by more than 150,000, or more than 150% of the
number of such families expected to participate under the
current maximum award ceiling of $1,400.
In the guaranteed loan program, under current law, students
from families whose adjusted gross income is less than
$15,000 automatically qualify for a Federal interest
subsidy while in school. S. 2657 raises the automatic
income eligibility limit for interest subsidy to $25,000.
This could cover families with unadjusted incomes of $30,000
or more. Moreover, amendments to the Special Programs for
Students from Disadvantaged Backgrounds (TRIO) specifically
authorize the Commissioner to permit students from "other
than low-income families, not to exceed one-third of the
total served," to participate. The Administration opposed
all of these changes.
Other Higher Education Programs. S. 2657 extends a
number of categorical institutional assistance and campus-
based student assistance programs that the Administration
had sought to eliminate. For example, the Administration
requested repeal of authorities for the Veterans' Cost-
of-Instruction program, the National Direct Student
Loan program and the Supplemental Educational Opportunity
Grant program. This bill extends those programs at annual
authorization levels approaching $900 million. The
Administration requested the extension of the College Work-
Study program at an annual level of $250 million. Instead,
S. 2657 authorizes funding levels starting at $450 million
in 1977 and rising to $720 million in 1982.
S. 2657 also establishes several new categorical programs.
These include, among others, a new "lifelong learning"
program which has been added to the community services and
continuing education grant programs administered by the
Office of Education (OE), and new special categorical
7
authorities in the existing Special Programs for Students
from Disadvantaged Backgrounds (TRIO) in order to provide
Federal funds for service learning centers at post-
secondary institutions and educational information centers.
The Administration opposed these new categorical programs.
Vocational Education
Under current law, vocational education programs include
formula grants to States and several categorical programs.
The Administration, in its fiscal year 1977 budget, pro-
posed to consolidate all vocational education programs into
one block grant and to include them as a title in the
Financial Assistance for Elementary and Secondary Education
Act. S. 2657 provides for two consolidations--one for all
funds which go to the States and another for the categorical
programs. However, State matching requirements are still
included, set-asides are maintained, and several new
categorical programs are added.
Other Program and Administrative Provisions
The bill extends several other elementary and secondary
education programs and contains several relatively minor
provisions that either extend or create new activities.
Among the extended programs are the National Institute of
Education, the Fund for Improvement of Postsecondary
Education, and the Emergency School Aid Act.
The bill also provides for the amendment of Title IX
(Prohibition of Sex Discrimination) to insure that Father
Son/Mother-Daughter activites are not precluded, provided
there are opportunities for reasonably comparable activities
for students of the other sex. This follows the Adminis-
tration's initiative in this regard. In addition, the bill
eliminates from Title IX applicability beauty pageant
scholarship winners and Girls State/Boys State activities.
The enrolled bill contains numerous new restrictions on
the Executive Branch in the administration of education
programs. They include the following:
-- mandatedcollection of data,
-- mandated surveys regarding teacher availability
and sex discrimination,
8
--- mandated evaluations of certain programs, and
-- maintenance of effort for most nonpostsecondary
education formula grant programs on either a per pupil
or aggregate basis.
S. 2657 also imposes new requirements on institutions of
higher education to carry out information dissemination
activities concerning financial assistance to prospective
or enrolled students, and requires institutions that under-
take these activities to designate an employee or group of
employees to be available on a full-time basis to assist
students to obtain such information.
Budget Impact
Authorization levels. Authorization levels in the bill
total $6.6 billion in 1977, $8.2 billion in 1978 and $8.4
billion in 1979. Authorizations under current law for 1976
are $7.2 billion.
Possible effect upon the budget. The attached tables
illustrate the authorization levels in current law and
S. 2657, and OMB estimates of outlay increases over the
Administration's program for fiscal years 1977 through 1979.
OMB believes that outlays from congressional appropriations
will be about $188 million more than your budget in fiscal
year 1977, about $1.1 billion more in 1978 and
$1.6 billion more in 1979.
HEW points out that, of the increase of $1.6 billion in
1979 outlays, over $600 million would be incurred under the
Continuing Resolution, regardless of action on this bill.
This amount reflects current programs which the Administra-
tion proposed to terminate, but which are, nevertheless,
covered by the Continuing Resolution. HEW further believes
that the incremental outlay effect of S. 2657 in 1979 is
lower in terms of probable Congressional action. OMB,
however, believes that these estimates reflect a realistic
assessment of future Congressional action based upon previous
Congressional appropriations in this area.
Arguments in Favor of Approval
1. The guaranteed student loan provisions. The
Congress has accepted Administration recommendations that
should help curb fraud and abuse in this program. Also,
partial acceptance of the Administration's request to
9
raise the amount graduate students may borrow should assist
students in high cost graduate programs.
2. The vocational education provisions have moved sub-
stantially in the direction of consolidation of programs
recommended by the Administration. While not all the
Administration sought, this bill contains important first
steps in consolidation and simplification of vocational
education programs and represents a good base for further
consolidation.
3. The degree of congressional support for this bill
is evidenced by the votes of both the Senate and the
House.
4. The bulk of the technical amendments to the
Education Amendments of 1974 which the Administration
recommended are incorporated in this bill.
5. Notwithstanding the significant authorization levels
in this bill, there traditionally has been a gap between
actual appropriations and authorization levels.
Arguments in Favor of Disapproval
1. The basic opportunity grants provisions could
increase the cost of the fully funded program in fiscal
year 1978 from the currently estimated $1.8 billion to
$2.5 billion. In addition, if the Administration proposed
a 1978 basic grant level of $1.8 billion--consistent with
full funding under current law, but not under the $1,800
maximum award level--the lowest-income students would
have their awards reduced by an average of over $100. This
would occur because more funding would have to be diverted
to a larger number of middle-income and upper middle-income
students. The Administration has always supported a fully-
funded basic grants program. However, this provision will
require appropriations far in excess of those currently
availableor projected for higher education student assistance
programs. This may require a reassessment of the full
funding policy.
2. The funding trigger for higher education is
expected to force appropriations for programs that the
Congress has not funded for several years, of $150 million
in 1978 and $215 million in 1979. Furthermore, if the
assumption is made that a policy of full funding of basic
grants is adopted, and that funding levels for other programs
follow recent trends, then in combination with the trigger,
FORD
i
RALD
LIBRAR
10
the higher education budget (excluding the guaranteed loan
program) would exceed $4.0 billion in 1978. This compares
to an Administration request for higher education of $1.9
billion for 1977.
3. Several of the changes made in the guaranteed
student loan program can be implemented administratively,
without changes in current law. Furthermore, there are
provisions that will make the program significantly more
complex and difficult to administer. In addition, there is
little evidence that proposals designed to create incentives
for lenders and guarantee agencies will necessarily result
in greater lender and guarantee agency participation and
effectiveness.
4. Notwithstanding the consolidations contained in
the vocational education programs, this bill establishes
new categorical programs and imposes planning and other
burdensome administrative requirements that negate the
positive effects of the consolidations.
5. The budgetary impact of S. 2657 is significant.
Expected outlays will be increased by about $188 million in
1977, approximately $1.1 billion in 1978, and about $1.6
billion in 1979. You have indicated your desire to balance
the Federal budget by 1979. Appropriations which would result
from enactment of S. 2657 could seriously jeopardize that
objective. If all authorizations carried full appropriations,
outlays would exceed your budget by $522 million in 1977,
$3,106 million in 1978, and $4,627 million in 1979.
6. The bill mandates restrictive administrative
structures and procedures, including the creation of new
programs and bureaucracies; hold-harmless provisions which
delay reform under programs consolidated under the Educa-
tion Amendments of 1974; maintenance of effort provisions;
new advisory bodies which duplicate the responsibilities of
the National Council for Educational Research in the National
Institute of Education; and 16 new narrow categorical programs
which seriously detract from your efforts to move program
decisions toward State and local education agencies and
away from Washington bureaucracies. In addition, the bill
adds more complex provisions that, will impose administra-
tive burdens on both the administering agencies and grant
recipients.
11
Conclusion. Notwithstanding the positive changes incor-
porated in S. 2657, the decision which must be made is whether
the two most objectionable features of the bill, i.e.,
the change in the basic educational opportunity grant program
and the imposition of the funding trigger, are sufficiently
objectionable to warrant your withholding your approval
from the bill.
Recommendations
HEW recommends approval. The Department believes that the
positive aspects of the bill, such as the consolidation of
the vocational education program and the provisions designed
to reduce fraud and abuse in student assistance programs
outweigh its disadvantages. The disadvantages include
authorizations for some programs in excess of the appropriate
or necessary level and establishment of arbitrary fund
level requirements.
Concerning the budget impact of S. 2657, the Department
states:
"The increase in the maximum basic grant award
to $1800 and the increase in the family income
limitation for interest subsidies under the
Guaranteed Student Loan Program will make it
much more difficult to arrive at a budget for
the Education Division within currently expected
levels. While we are still in the process of
reevaluating our budget request for FY 1978,
it seems likely that to fund basic grants even
at the $1400 level in that year and to meet
other required increases, an adjustment of
approximately $500-$600 million would be re-
quired in the Department's request for the
Education Division, to be made up of reductions
in other education programs and/or an overall
increase in the Department's request for
education."
The Department notes that it is unlikely that a greater
degree of vocational education consolidation will be
achieved in the near future and that many of the Adminis-
tration's proposals in S. 2657 "may fall by the wayside"
if the next Congress must again take up the extension of
these programs.
12
We disagree with HEW's assessment of the potential impact
of S. 2657. In our judgment, the enrolled bill would
adversely affect the Administration's higher education
strategy, would place undue pressures on the budget and
would offer very few net programmatic advantages over current
law. We believe your public disapproval and the reasons
therefor can influence the 95th Congress in shaping new
legislation in this area. We also believe that many of the
positive aspects of S. 2657 can be implemented without
changes in current law.
Accordingly, we recommend disapproval of S. 2657 and have
attached a draft memorandum, for your consideration.
Parta Paul H. Director O'Neill Ohein
Acting
Enclosures
Analysis of Authorizations in Education Amendments of 1976 (S. 2657)
(Dollars in millions, fiscal years)
S. 2657
Program
1976
1977
1978
1979
Basic Opportunity Grants
1,526
1,712
2,553
2,683
Other Student Assistance
1,079
1,112
1,235
1,268
Other Higher Education
2,921
2,354
2,419
2,518
Vocational Education
1,011
719
1,089
1,290
Other Programs
702
753
895
642
Totals
7,239
6,650
8,191
8,401
Estimated Costs of S. 2657 Based on Likely Congressional Action
(Dollars in millions, fiscal years)
Incremental
Incremental
Incremental
outlays over
outlays over
outlays over
Program
1977
current policy
1978
current policy
1979
current policy
Higher Education
BA
3,517
3,758
4,390
BO
3,147
+53
3,707
+896
4,275
+1,336
Vocational
Education
BA
618
695
735
BO
610
+50
660
+100
690
+130
Other
BA
362
398
438
BO
325
+85
360
+105
400
+140
Totals
BA
4,497
4,851
5,563
ATTACHMENT
BO
4,082
+188
4,727
+1,101
5,365
+1,606
BA=Budget Authority
ORD
BO=Budget Outlays
STATEMENT BY THE PRESIDENT
I have approved S. 2657, the Education Amendments of 1976.
I have done so with some reluctance because parts of the
legislation are unwise and others contain authorization
levels which we cannot realistically expect to meet. I
have signed the legislation, however, because of the positive
elements it contains and because most of its worst elements
are readily succeptible to corrective legislation in the
next session of Congress.
S. 2657 makes a number of positive changes to our education
laws. I applaud the steps taken toward program consolida-
tion in the Vocational Education Amendments. This is fully
consistent with my broader effort to achieve consolidation
of educational programs. I hope the incentives provided
in this bill to increase State participation in the Guaranteed
Student Loan program will fulfill their potential, and that
the experimental program which consolidates at the State
level, the student application process of the Federal Basic
Educational Opportunity Grant program with that of similar
State grant programs will demonstrate the merit of returning
such responsibilities to the State and local level.
Numerous Administration initiatives designed to curb fraud
and abuse in student assistance programs, particularly the
Guaranteed Student Loan program, were adopted. Other needed
Administration recommendations to reduce sex-stereotyping in
2
vocational education programs were also adopted.
However, I particularly regret the inclusion of the so-called
trigger mechanism which operates to divert funds from
student assistance to clearly undesirable forms of
institutional assistance which the Congress itself has not
recently funded in a substantial way.
In raising the maximum Basic Educational Opportunity Grant
from $1400 to $1800, effective in the 1978-79 school year,
the Congress may well have continued its penchant for
promising more than we can responsibly provide. I am
committed to the basic grant program, but I could not at this time
responsibly assess at this time that in two years we could
reasonably expect
fully fund this program at the new level.
There are other features in the bill which, I believe, are
De objectionable and which should be changed.
Although it is generally the practice of Congress to consider
and pass major educational legislation only when the previous
authorizing legislation terminates, I would ask that such
not be the case with this legislation. S. 2657 has serious
deficiencies. I intend to forward to the first session of
the 95th Congress for their consideration and action major
revisions to this bill, especially in the area of higher
I
education, and 1 ask the support of those who participated in FORD
the development of S. 2657 to assist in its improvement.
BALD
LIBRA
ME.
MEMORANDUM OF DISAPPROVAL
I am withholding my approval of S. 2657, the
Education Amendments of 1976.
In my opinion, this bill is irresponsible in three
respects: First, it would authorize appropriatións of
over $23 billion over the next three years. This represents
an excessive burden upon the American taxpayer. Second,
this bill creates 16 new categorical programs for a multi-
creates
plicity of purposes. Furthermore, these new programs impose
imposes annecessary
unreasonable complexities and administrative burdens not
only upon the Department of Health, Education, and Welfare
as crellas
but also upon the Nation's institutions of higher education
and upon State and local governments. Third, and most
importantly, the Congress has altered the major Federal
assistance program for postsecondary students--the basic
educational opportunity grant program--in a way that would
reduce awards for low income, disadvantaged students.
Under current and foreseeable funding levels, lower income
students would receive awards which average $100 less that
presently
allowed
as a direct result of the changes made by the Congress in
this bill.
By not signing this bill, I am indicating that the
current laws governing our higher education and vocational
education programs, as imperfect, as those laws may be,
are preferable to the changes incorporated in S. 2657.
Insumury let me emphasize that I am dedicated to
the appropriate Federal role in support of higher and
vocational education. However, This bill, by altering the Basic
Opportunity Grants program at the expense of its intended
2
recipients A students from poor and working poor families
by authorizing excessive appropriations by creating
new categorical programs, by imposing additional adminis-
trative burdens, does not meet the Nation's educational
needs.
under these uncomstands, f charot
approve
*
commas take previdence over dashes.
Therefore ceni calone done not necessary
moorequir.
Quern
THE WHITE HOUSE
WASHINGTON
(issy
October 19, 1976
f.
MEMORANDUM FOR:
JIM CANNON
FROM:
JIM CONNOR JEL
SUBJECT:
Initiatives in Education Proposed
by Secretary Mathews
The President reviewed your memorandum of October 18 on
the above subject and made the following notation:
"The speech shop is working on an Education speech.
Give copy of this to Bob Hartmann, Bob Orben and
Doug Smith."
With a copy of this memorandum we are sending copies of
this material to the individuals mentioned by the President.
cc: Dick Cheney
Bob Hartmann
Bob Orben
Doug Smith
FORD i LIBRARY 07V839
101920
ACTION
DOMESTIC COUNCIL
FROM:
Sec. Mathews
SUBJECT:
Memo to the President on Education Initiatives
Date: 9/14/76
COMMENTS:
Lissy has written a brief cover memo (requested
by Connor's office) which includes reactions
to the Mathews mem.
I recommend that you sign the memo.
A.M
A
type "infermation
ACTION:
GERALD R. LISUARY FORD
Date:
101523
Educ
THE WHITE HOUSE
INFORMATION
WASHINGTON
October 18, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
SUBJECT:
JIM Initiatives CANNON Jun in
Education
Proposed by Secretary Mathews
Following your Ann Arbor speech Secretary Mathews
forwarded a memorandum suggesting four themes "you
might want to consider in giving form to the initia-
tive you have taken." A summary of the proposed
four themes follows:
I. A New Emphasis on Quality, With Focus on
Basic Skills
This recommendation envisions a comprehensive
effort to improve basic skills like reading as
opposed to targeted efforts we now pursue, and
increasing the ability of teachers to teach
such skills. OMB notes that this new direction
might reduce present emphasis on disadvantaged
and handicapped children.
II. Programs to Join Education and Work
This concept recognizes the need to develop
mutually beneficial relations between the worlds
of work and education, possibly through alternate
periods of work and education.
III. The Re-Unification of Family-Community and School
This comment recognizes students learn better
where there is parental involvement, and such
involvement could be encouraged in such ways as
using parents to assist with instruction.
FORD
2
IV. More Education, Less Bureaucracy
This initiative recognizes our educators are
being turned into bureaucrats and, thus,
diverted from their mission.
Secretary Mathews suggests the Federal education effort
could benefit from shifting from one of coercion to
one of encouragement -- with that encouragement focused
on local initiatives which give attention to general
or basic purposes, such as reading.
HEALTH
DEPARTATION
or
THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE
DEPARTMENT CNV
WASHINGTON, D. C. 20201
U.S.A.
SEP 14 1976
MEMORANDUM FOR THE PRESIDENT
RW
I am pleased by your announced intention to emphasize education as
you plan for 1977 and beyond. It will be a pleasure to work with
evel
you in that effort.
Attached are some themes you might want to consider in giving form
to the initiative you have taken. With each one I have included
illustrations of specific programs that might be developed to make
the principles practical, but as illustrations they are by no means
inclusive of all possibilities. (Not so incidentally, none are pro-
grams which assume that all educational programs can be solved with
massive federal spending.)
All four themes strike a new cord, but they rest on fundamentals as
solid as the old Blue-Backed Speller. They add to what this Nation
has accomplished in expanding educational opportunity, but they go
forward to address the next questions, not to turn the clock back.
Secretary
Attachments
Get to
B.
ASAP
INITIATIVES IN EDUCATION
1. A NEW EMPHASIS ON QUALITY, WITH A FOCUS ON BASIC SKILLS
Without engaging in a blanket criticism of the failures
of the educational system and without abandoning the commitment to
increasing access, particularly for the disadvantaged,
there are good reasons to give new emphasis to improving
the quality of instruction for all and to providing challenges to the
best of the students;
if public education comes to mean mediocre education, it
will lose its claim to public support
people, all people, want
the best for their children.
Program emphases to carry out this initiative would include a
comprehensive effort to improve reading skills (as contrasted to the
good but categorical efforts we now have), support of projects to
train and retrain teachers to teach the basic skills, an attack on the
problem of functional illiteracy (not being able to use skills to under-
stand issues or solve problems), and, supporting all of these projects,
an effort to improve our national capacity to diagnose, earlier and
more accurately, reading and other learning difficulties.
There is also a sense in which teaching social responsibility
qualifies as a "basic skill," or a fourth R, which properly deserves
emphasis in this initiative.
2. PROGRAMS TO JOIN EDUCATION AND WORK
Without assuming that all education is directly related
to work or results only in job skills,
there is an obvious need to develop mutually beneficial
relations between the worlds of work and education;
we would do well to make modern use of our colonial
heritage of so joining the learning of basic skills and the learning
of a craft that the need to know a technique was motivation for
learning the three Rs.
We should remember, however, in this initiative that employable
skills in our half of the 20th century are increasingly the skills of
producing or transmitting knowledge; that is, work skills are often
intellectual skills.
Initiatives in Education
Page 2
But for whatever kind of work, we could do more to bring
education into a closer orbit by emphasizing alternate work-education
projects and programs to use skill requirements of industry in design-
ing educational programs.
This initiative has particular significance for handicapped
Americans who not only need the opportunities for education but who
must translate educational training into a job to be self-reliant.
3. THE REUNIFICATION OF FAMILY-COMMUNITY AND SCHOOL
These historical allies have become modern strangers, to
the detriment of everyone.
Students learn better where there is parental involvement.
It is not the use of more police but the involvement of
the family and the community that offers our best hope of meeting the
growing problem of disorder in the schools.
The community itself is a potentially great educational
agent (in its recreation programs, in its museums, etc.) that can be
put to better use in league with the schools.
A sound and imaginative educational strategy would be
one that looked at all the agencies that educate, whether they are
schools or not, and tried to make use of their combined efforts.
Certainly we have found in the difficult experiences with
desegregation that the schools can profit from broader citizen support.
We ought to make greater and better use of those coalitions.
This initiative would convert into specific projects, such as
a Parents Involvement Program (using parents to assist with instruc-
tion) or a program to involve everyone from law enforcement agencies
to city museums in cooperative ventures with the schools.
4. MORE EDUCATION, LESS BUREAUCRACY
We are turning our educators into bureaucrats and
diverting valuable resources that should go into instruction into
clerical exercises. We need to reverse that trend.
Colleges and universities testify across the country that
they are muscle-bound in a Lilliputian nightmare of forms and formulas.
Secondary and elementary schools are no better off.
Initiatives in Education
Page 3
Of course, there are legitimate uses of regulations to
prevent fraud and abuse in student loan programs and to protect the
rights of minorities. But what is sound in a particular case is not
necessarily sound as a general prescription.
Specific steps we are taking or could take to address this
problem range from the block grant program to the regulatory reform
efforts.
THE ROLE OF THE FEDERAL GOVERNMENT IN EDUCATION INITIATIVES: A
STRATEGY OF ENCOURAGEMENT NOT COERCION
The federal role in education has been one of limited or special
objective but with massive intrusion. Perhaps that should be reversed,
at least in this case, with attention to general or basic purposes
(such as basic skills) but with limited intrusion.
Leaving to state and local governments their historic responsibility,
the Federal Government would act to accelerate sound local initiatives,
to encourage "bottoms up" progress, and to bring into more productive
relationship efforts that are now categorically separated.
Variations from our experiences with the Fund for the Improvement
of Postsecondary Education and the National Institute of Education can
give us good models for all four initiatives using this definition of
the federal role.
We could also strike a new note by making grants directly, or
through schools, to agencies outside the traditional educational system
that would bring their interest to bear on the problems of the schools;
those could range from industries (for teaching basic skills in connec-
tion with job training) to parents groups (to assist in instruction).
PURD
file
CC: Lissy
Quern
Moore
THE WHITE HOUSE
WASHINGTON
1976 October 19, 1976
OCT 19 PM 7 43
MEMORANDUM FOR:
JIM CANNON
FROM:
JIM CONNOR E 6
SUBJECT:
Initiatives in Education Proposed
by Secretary Mathews
The President reviewed your memorandum of October 18 on
the above subject and made the following notation:
"The speech shop is working on an Education speech.
Give copy of this to Bob Hartmann, Bob Orben and
Doug Smith. "
With a copy of this memorandum we are sending copies of
this material to the individuals mentioned by the President.
cc: Dick Cheney
Bob Hartmann
Bob Orben
Doug Smith
FORD & LIBRARY DIRALD
Eden
THE WHITE HOUSE /
WASHINGTON
FORD i LIBRARY 07V835
Jim This Cannon is a Relantial
area for action costo continue
1976 OCT BRO 26 4 45 Art Maryon
102619
he or she lives on campus (resident
ondary Institutions. Such information is par-
$5,000 at private colleges. Of
and two-year colleges, for both tui-
ticularly helpful to students and parents as
student) or at home (commuter
course, these figures should be
tion and fees and other costs, and for
they plan to meet the costs of education
student). "Total cost" includes the
viewed in context with cost of liv-
both resident and commuter stu-
after high school and estimate their need for
five basic components of a student
ing indices for each region; on a
dents. (Compare tables 1 and 3.)
financial aid. The publication for 1976-77
budget: tuition and fees, books and
regional basis, college costs gener-
It should also be pointed out that
college costs can be obtained for $2.50 (pre-
supplies, room and board, transpor-
paid) from College Board Publication
ally parallel such index compari-
New York State provides more stu-
Orders/Box 2815/Princeton, New Jersey
tation, and personal expenses. The
sons.
dent financial assistance in dollars
08540 (ask for item #3179427).]
Table 1
Table 3
COLLEGE COSTS NATIONALLY, 1976-77
COLLEGE COSTS IN NEW YORK STATE, 1976-77
Average Costs of Attending College and
Average Costs of Attending College and
Cost Increases Since 1970-71
Cost Increases Since 1970-71
Resident Students
Commuter Students
Resident Students
Commuter Students
Average
% Increase
Average
% Increase
Average
% Increase
Average
% Increase
Type of
Cost
Since
Cost
Since
Type of
Cost
Since
Cost
Since
Institution
1976-77
1970-71
1976-77
1970-71
Institution
1976-77
1970-71
1976-77
1970-71
Private Institutions
Private Institutions
Four-Year-Total
$4,568
54%
$4,141
74%
Four-Year-Total
$5,297
48%
$4,390
44%
Tuition & Fees
2,329
54
2,329
54
Tuition & Fees
2,807
51
2,807
51
Other Costs*
2,239
54
1,812
109
Other Costs*
2,490
46
1,583
33
Two-Year-Total
$3,907
64%
$3,595
96%
Two-Year-Total
$4,248
41%
$3,720
45%
Tuition & Fees
1,740
52
1,740
52
Tuition & Fees
1,909
32
1,909
32
Other Costs*
2,167
75
1,855
169
Other Costs*
2,339
49
1,811
63
Public Institutions
Public Institutions
Four-Year-Total
$2,790
56%
$2,448
60%
Four-Year-Total
$3,125
34%
$2,308
16%
Tuition & Fees
621
57
621
57
Tuition & Fees
695
42
695
42
Other Costs*
2,169
56
1,827
61
Other Costs*
2,430
32
1,613
8
Two-Year-Total
$2,454
**
$2,223
**
Two-Year-Total
$2,825
30%
$2,159
39%
Tuition & Fees
387
387
Tuition & Fees
591
33
591
33
Other Costs*
2,067
**
1,836
Other Costs*
2,234
29
1,568
41
* Includes books and supplies, room and board, transportation, and personal expenses.
*Includes books and supplies, room and board, transportation, and personal expenses.
Data for two-year public colleges are insufficient to provide comparative information on
SOURCE: Figures are derived from data collected by the College Scholarship Service of
cost increases since 1970-71.
the College Entrance Examination Board (CEEB).
SOURCE: College Entrance Examination Board (CEEB), New York City, April 1976.
LIBRARY