MAJORITY MEMBERS:

MINORITY MEMBERS:

WILLIAM 0. FORD, MICHIGAN,

WILLIAM F. GOODLING, PENNSYLVANIA E. THOMAS COLEMAN, MISSOURI THOMAS E. PETRI, WISCONSIN MARGE ROUKEMA, NEW JERSEY STEVE GUNDERSON. WISCONSIN RICHARD K. ARMEY. TEXAS HARRIS W. FAWELL. ILLINOIS PAUL B. HENRY, MICHIGAN CASS BALLENGER, NORTH CAROLINA SUSAN MOLINARI. NEW YORK BILL BARRETT. NEBRASKA

Chairman

JOSEPH M. GAYDOS, PENNSYLVANIA WILLIAM (BILL) CLAY, MISSOURI GEORGE MILLER. CALIFORNIA

AUSTIN J. MURPHY.PENNSYLVANIA DALE fe KIU9EE. MICHIGAN PAT WILLIAMS, MONTANA MATTHEW G. MARTINEZ, CALIFORNIA MAJOR R. OWENS, NEW YORK

CHARLES A. HAYES. ILLINOIS CARL C. PERKINS, KENTUCKY THOMAS C. SAWYER, OHIO DONALD M. PAYNE, NEW JERSEY

COMMITTEE ON EDUCATION AND LABOR

NITA M. LOWEY, NEW YORK JOLENE UNSOELD. WASHINGTON CRAIG A. WASHINGTON, TEXAS JOSE SERRANO, NEW YORK

U.S. HOUSE OF REPRESENTATIVES

JOHN A. BOEHNER. OHIO SCOTT L. KLUG. WISCONSIN (VACANCY)

TELEPHONES:

2181 RAYBURN HOUSE OFFICE BUILDING

PATSY T. MINK, HAWAII ROBERT A. ANDREWS, NEW JERSEY

MAJORITY—(202) (TTY>-(202) MINORITY—(202) (TTYM202)

WASHINGTON, DC 20515

WILLIAM J. JEFFERSON. LOUISIANA JOHN F. REED. RHODE ISLAND TIM ROEMER. INDIANA JOHN W. OLVER, MASSACHUSETTS RON DE LUGO. VIRGIN ISLANDS JAIME B. FUSTER, PUERTO RICO

October 17, 1991 ......

--i

:""0

The Honorable Lamar Alexander

Secretary U.S. Department of Education 400 Maryland Avenue, SW

Washington, DC 20202

-

o

Dear Mr. Secretary:

Enclosed are three copies of H. R. 3553, "Higher Education Amendments of 1992".

The Committee would appreciate having the views of your department

with regard to this legislation, submitted in triplicate, at the earliest opportunity. With kind regards, Sincerely,

Chairman

WDFrps Enclosure

225-4527 225-4944 225-3725 225-3727

Identical

letter

sent

Honorable William F.

to:

Goodling

UNITED STATES DEPARTMENT OF EDUCATION THE SECRETARY

October 21,

Honorable William D.

1991

Ford

Chairman

Committee on Education and Labor

House of Representatives Washington, DC 20515 Dear Mr.

•

Chairman:

I am writing to express the views of the Department of Education on H.R. 3553, the "Higher Education Amendments of 1992," as marked up by the Subcommittee on Postsecondary Education. At the outset, I must point out that the Department's review of

this massive and complex piece of legislation is ongoing; the Department may submit additional views on the legislation in the near future.

Also, my staff is reviewing the bill on a technical

level in response to the subcommittee staff director*s request for technical drafting assistance from the Department. I am very pleased to see that H.R. 3553 includes a number of

provisions similar to the Administration's proposal for reauthorizing the Higher Education Act of 1965 (HEA). Examples

include the provisions relating to guaranty agency oversight by the Secretary, conditional certification of institutions by the Secretary, the option of graduated repayment for student loan borrowers, the reduction of categories for Stafford Loan

deferments, the establishment of a single need analysis system, the creation of a single Federal aid application form, the elimination of "on the record" hearings for Title IV enforcement actions, the requirements for institutional refunds, the authorization of teacher and school leader academies, and the creation of Partnerships for Innovative Teacher Education. Some of the provisions in H.R. 3553, while similar to Administration

proposals, would be improved if modified to resemble more closely the Administration proposals on which they are based. I also welcome the bill's inclusion of a variety of measures that, to varying degrees, reflect the proposals and principles set forth in the President's AMERICA 2000 strategy. Among these are, in part, the Presidential Achievement Scholarships and the teacher and leader academies.

Regarding the achievement

scholarships proposal, I strongly oppose linking the Presidential Achievement Scholarships to participation in early intervention programs and to such a low achievement standard as a 2.5 grade point average. I urge that the teacher and leader academies be made mandatory State activities. I also urge the Committee to take additional steps to support efforts to reach the National

400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-0100

Page 2 - Honorable William D. Ford Education Goals, such as addressing the issue of minimum academic standards for student aid eligibility, as described in the appendix.

As I have stated previously, my two overriding objections to the bill are the conversion of the Pell Grant program to an entitlement program and the establishment of a new direct student loan program. First, the Administration strongly opposes the creation of any new entitlement. Entitlements are the fastest growing area of Federal spending, and thus the biggest cause of deficit growth. Coupled with a large increase in the maximum Pell Grant and proposed changes to the need analysis system, the effects of which have not been fully analyzed, conversion of the Pell Grant program to an entitlement program is likely to more than double the current cost of the program. Under the Budget Enforcement Act of 1990, every dollar of that increase would have

to be paid for with savings in other entitlements or with new taxes.

Second, in two previous letters to you I have stated my strong opposition to a new direct Federal loan program that would replace, in whole or in part, the current Guaranteed Student Loan (GSL) programs. The Administration is convinced that there are far too many problems, risks, and costs associated with the direct loan proposals under consideration to pursue these proposals, and that comprehensive reforms to address identifiable problems in the current GSL programs should be the focus of reauthorization of the student loan programs. If the bill were presented to the President with either the Pell Grant entitlement or a Direct Loan replacement for the Guaranteed Student Loan Programs, the President's senior advisors would recommend that he veto the bill.

The Administration strongly supports increasing grant aid, but the Administration's proposed increase in the maximum Pell Grant was linked to proposed need analysis and award rule changes. H.R. 3553 would not adopt those changes, and would cost $10.97 »

billion for the Pell Grant program alone. It would increase spending for students with family incomes above $30,000 by almost 600 percent compared to the Administration's proposal for 1992, and would also increase the average award for these students by more than 70 percent. At the same time, the percent of funds targeted on the neediest students would drop from 67 percent to 50 percent under H.R.

3553.

In addition, the Administration objects to the creation of an "unsubsidized" loan program which would, in fact, result in $2 64 million in Federal costs for special allowance and defaults. Sufficient loan capital for students and families would be available without this new expenditure if Congress enacts the

Page 3 - Honorable William D. Ford

Administration's proposed annual and cumulative loan limit increases for Stafford and SLS loans.

One of the main themes shared by the Administration's proposal

and H.R. 3553 is program integrity. This theme is particularly appropriate during this reauthorization, against the backdrop of the various reports on this issue and my new management team's evaluation of our present system of student aid administration.

There are many valuable toughening measures in the bill. I have examined the provisions of H.R. 3553 designed to substitute an enhanced State approval mechanism for the role of

accrediting bodies in determining institutional eligibility, and my comments are set out in more detail in the enclosed appendix. In brief, I support a variation on the provisions of H.R. 3553, namely, the elimination of accreditation as an element of institutional eligibility for vocational programs (not just vocational schools) for all HEA programs, and the retention of accreditation as an element of institutional eligibility for

collegiate programs. The State role in determining institutional eligibility should be expanded for all programs (not just Title IV programs) and sectors, but with a particular emphasis on vocational programs, which would benefit most from closer oversight.

I also agree that the Department's role in ensuring program integrity needs to be strengthened, and the Administration's proposal contains a variety of provisions that reflect that need for an enhanced departmental role.

However, several of the

provisions in H.R. 3553 either unnecessarily (and perhaps inadvertently) restrict the Secretary's current authority, or are too inflexible to permit the Secretary to tailor his actions to the needs of a particular problem, such as determining what audit priorities should be.

The bill moves in the wrong direction by creating more programs

in precollege outreach, partnerships that, to a and, in some instances, to strongly support the

graduate support, community service, and large extent, duplicate current program^ even duplicate each other. We continue Administration's proposed framework for

consolidation of these programs. Consolidation would give institutions the flexibility to be creative in program design and in the use of funds to address problems that are specific to them. In addition, consolidation would provide a more coherent and effective administrative structure that would ensure access

to those services by linking them to the States.

The current

project-by-project grant system, no matter how large, can never accomplish this effectively. We also strongly oppose the inclusion of the kinds of extraordinary administrative provisions found in the new TRIO programs proposed in H.R. 3553. These

provisions would restrict flexibility in program administration and add new administrative burdens.

Page 4 - Honorable William D. Ford The Department supports the reauthorization of the current Title VI programs and opposes the proliferation of new programs that would be authorized by H.R. 3553. Many of these new programs are vague in purpose, potentially expensive, or duplicate allowable activities under current law.

The enclosed appendix A, although not exhaustive, sets out some of our comments regarding particular provisions and portions of

the bill. Also enclosed, as Appendix B, are preliminary estimates of the FY 1993 budget authority levels for H.R. 3553. I appreciate this opportunity to express my views on this major legislative effort, and look forward to working together to resolve many of our differences as the HEA reauthorization process continues.

At least one provision of H.R.

3553 would increase direct

spending; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act (OBRA) of 1990. No offsets to the direct spending increases are provided in the bill. Accordingly, it will trigger a sequester if it is not fully offset. Any substantially increased costs in mandatory programs that would take effect including years beyond coverage that are not fully offset would Pay-as-you-go scoring estimates

in any of the outyears — of the Budget Enforcement Act — make H.R. 3553 unacceptable. of H.R. 3553 are under

development.

If H.R. 3553 were presented to the President in its current form, the President's senior advisors would recommend that he veto the bill.

Sincerely,

Lamar Alexander

Enclosures