Section E - Postsecondary Education

• Overview
• Student Aid Summary Tables
• Student Aid Overview
• Pell Grants
• Work-Study
• Supplemental Educational Opportunity Grants
• Perkins Loans
• State Student Incentive Grants
• Direct Loans and Federal Family Education Loans
• Higher Education Programs Overview
• Title III: Aid for Institutional Development
• Fund for the Improvement of Postsecondary Education
• International Education and Foreign Language Studies
• Institute for International Public Policy
• Minority Teacher Recruitment/Teacher Recruitment and Preparation
• Urban Community Service
• Mary McLeod Bethune Memorial Fine Arts Center
• Federal TRIO Programs
• College-School Partnerships
• National Early Intervention Scholarships and Partnerships
• Scholarships and Fellowships
• State Grants for Incarcerated Youth Offenders
• Early Awareness Information
• Learning Anytime Anywhere Partnerships
• Access and Retention Innovations
• Academic Facilities
• Howard University
• Historically Black College and University Capital Financing Program

E. POSTSECONDARY EDUCATION

Overview

The 1999 budget request for postsecondary education supports the Administration's proposals for reauthorization of the Higher Education Act and builds upon the successes achieved in 1998 for postsecondary education. Last year, the maximum Pell Grant was raised by $300 to $3,000 for students from the neediest families and the Taxpayer Relief Act of 1997 brought an historic level of tax support to low- and middle-income families paying the costs of postsecondary education.

The 1999 proposals reflect President Clinton's continued strong support for higher education and take important steps toward ensuring equal access to a quality postsecondary education for all Americans. The request would significantly increase grant aid and work-study assistance while reducing student borrowing costs. And it would fund critical new programs that would improve teacher training, promote early awareness of the importance of higher education and the financial aid available to pay for it, and provide support services to help prepare disadvantaged students for higher education.

Following are the highlights of the Department's 1999 request:

• Total student financial aid available would be expanded to $51 billion, a 4 percent increase over the 1998 level. Grants, loans, and work-study opportunities would be provided to over 8.8 million students, over a quarter million more than in 1998.
• The Pell Grant maximum award would increase by $100 to $3,100, the highest ever, to improve access to postsecondary education for students from the neediest families. Over 3.9 million students would receive grants under the program.
• A $70 million increase for Work-Study would achieve the President's commitment to giving 1 million recipients the opportunity to work their way through college and would bolster the President's "America Reads" initiative under which Work-Study recipients serve as reading tutors.
• In 1999, the new HOPE tax credit will provide $4.2 billion to an estimated 5.5 million students and their families to help pay postsecondary educational expenses. In addition, Lifetime Learning tax credits will total $2.5 billion for 7.1 million students and the Education IRA will promote savings for future educational expenses.
• Student loan fees for all borrowers would be reduced from 4 to 3 percent in 1999. Origination fees for need-based loans would be phased out entirely by 2003.
• The FFEL guaranty agency system would move toward a fee-for-service model. The Department would pay 100 percent of lender default claims and all guaranty agency reserves would be recalled--because they would not be necessary. Guaranty agencies would operate under performance-based agreements and would receive payments from the Department and the lenders they serve based upon services performed.
• A $53 million or 10 percent increase for the TRIO programs would increase the number of Upward Bound projects--especially in underserved areas--in support of the President's Hispanic Initiative, and would support new Innovative and Experimental projects to encourage grantees to pursue new approaches to better serve TRIO participants. The total number of students served by the TRIO programs would increase to over 743,000.
• A $15 million Early Awareness Information program would bring the message to middle school students and their families about the importance of higher education and the steps needed to attain that education.
• A College-School Partnership initiative would encourage academic achievement and subsequent college enrollment among students in high-poverty schools.
• A $43.8 million or 20 percent increase for the Title III programs would provide greater help to Historically Black Colleges and Universities and other institutions that serve high percentages of students from low-income backgrounds. Funding for the Hispanic-Serving Institutions program would more than double to $28 million and a proposed Strengthening Tribal Colleges and Universities program would be funded at $5 million.
• A $67 million Teacher Recruitment and Preparation initiative would help recruit new teachers for high-poverty urban and rural areas that have the most difficulty in recruiting and retaining a qualified teaching force.
• A new $30 million Learning Anytime Anywhere Partnerships program would support pilot projects using distance learning technology and other innovations to enhance the delivery of postsecondary education and lifelong learning opportunities.

Student Aid Summary Tables

The following tables show estimated Federal student aid funding, aid available, and recipients under the Education Department's 1999 budget request.

Aid Available to Students ($ in millions)¹

Number of Student Aid Awards
(in thousands)

Student Aid Overview

Over the last 5 years, the Administration has made great strides in opening the doors of college to everyone who has the desire and preparation to go. The President's college opportunity agenda represents the largest Federal investment in helping people go to college since the original GI Bill.

The tax benefits for postsecondary education enacted last year will make college more affordable for many American families. An estimated 5.5 million students will receive $4.2 billion in HOPE tax credits in 1999, while an estimated 7.1 million students will receive $2.5 billion in Lifetime Learning tax credits (see details below).

As important as tax breaks are, America's neediest families need additional help in paying college costs. Through the reauthorization of the Higher Education Act, the Administration will be working to (1) ensure access to, and encourage persistence in postsecondary education; (2) modernize and simplify the Federal student aid delivery system; (3) support and improve student loan systems with enhanced repayment flexibility; and (4) assure accountability of Federal funds. Together with proposed program improvements, the Administration's 1999 budget would provide a total of nearly $51 billion in grant, loan and work-study assistance to America's students and families. This significant investment will ensure that the doors of college remain open to all Americans into the 21st century.

The dramatic growth in Education Department student financial assistance programs since 1992 is a result of several factors. The Higher Education Amendments of 1992 raised annual and lifetime borrowing limits and created a new Unsubsidized Stafford Loan program. Between 1993 and 1996, Unsubsidized Stafford Loan volume increased from 7.5 percent to over 33 percent of total volume, while total student loan volume doubled from about $15 billion to over $30 billion per year.

The Student Loan Reform Act of 1993 helped ease the burden of this additional borrowing on students by reducing loan origination fees and interest rates while at the same time creating a new Direct Loan program with streamlined loan delivery and flexible, longer-term repayment options. The 1999 budget request and the Administration's proposal to reauthorize the Higher Education Act include additional fee reductions in the student loan programs.

Partly in response to increased borrowing, the Administration began to encourage and support increased appropriations for Pell Grants and Work-Study. This led to an increase in the Pell maximum award from $2,300 in 1994 to $3,000 in 1998 and a 35-percent increase in Work-Study in 1997. Additional increases proposed for these programs in 1999--along with the multibillion-dollar tax benefits from the HOPE Scholarship and Lifetime Learning tax credits--will further reduce financial barriers to postsecondary education in 1999 and future years.

Pell Grants

The Administration is proposing to increase the Pell Grant maximum award to $3,100 in 1999 from the 1998 level of $3,000. This $100 increase would expand access to postsecondary education for millions of disadvantaged students while also increasing opportunities for working Americans to upgrade their knowledge and skills.

The Pell Grant program helps ensure financial access to postsecondary education by providing grant aid to low- and middle-income undergraduate students. The most need-focused of the Department's student aid programs, Pell Grant awards vary in proportion to the financial circumstances of students and their families.

The 1999 budget request for the Pell Grant program reflects several changes included in the Administration's HEA reauthorization proposal. First, the Administration proposes to continue the higher income protection allowances authorized in the 1998 appropriations act for dependent students and independent students without dependents other than a spouse: $2,200 for dependent students; $4,250 for single independent students; $4,250 for married independent students without dependents when both are in college; and $7,250 for married independent students without dependents with one in college.

Second, the 1999 request includes a proposal to limit the duration of a student's eligibility for Pell Grant assistance to the full-time-equivalent of 150 percent of the period normally required for the student to complete his or her program of study, with the equivalent of 8 years as an absolute maximum.

Finally, the Administration is proposing to reduce waste and abuse in the student financial assistance programs by terminating the eligibility of those institutions with high student loan default rates to participate in the Pell Grant program, as well as the other title IV programs. Under current law, institutions with high default rates are only precluded from participation in the student loan programs.

Campus-based Programs

The Work-Study, Supplemental Educational Opportunity Grants, and Perkins Loan programs are collectively referred to as the "campus-based" programs because participating institutions are provided with funding that they are responsible for administering on their own campuses. These programs provide financial aid administrators with considerable flexibility in the packaging of financial aid awards in order to best meet the needs of their students.

Work-Study

The 1999 request for Work-Study is $900 million, an increase of $70 million or 8 percent over the 1998 level, to give over one million students the opportunity to work their way through college.

The Work-Study program provides grants to participating institutions to pay up to 75 percent of the wages of needy undergraduate and graduate students working part-time to help pay their college costs. The remaining 25 percent of the student's wages are provided by the school or other eligible employer. Funds are allocated to institutions on the basis of a statutory formula, and individual award amounts to students are determined at the discretion of institutional financial aid administrators.

Students may earn their Work-Study awards by working in community service jobs. The statute requires institutions to use at least 5 percent of their Work-Study allocations to support students working in community service jobs. The President encourages institutions to continue using Work-Study funds to promote community service activities, particularly in the areas of tutoring children in reading and serving in family literacy programs.

Through the America Reads Challenge, tens of thousands of Work-Study students at more than 800 colleges and universities are earning money for college while they are helping others to learn to read. The Department waives the 25 percent institutional matching requirement for students who work as reading tutors in literacy programs that provide services to preschool age children, children in elementary school, and their families. The Administration estimates that 100,000 students will be working as reading tutors in support of the President's America Reads Challenge in 1999.

Supplemental Educational Opportunity Grants

The Supplemental Educational Opportunity Grant (SEOG) program provides grant assistance of up to $4,000 per academic year to undergraduate students with demonstrated financial need. The 1999 request includes $619 million and, with institutional matching funds, would provide $784 million in grant aid to more than 1 million students.

SEOG funds are allocated to institutions on the basis of a statutory formula, and a 25 percent institutional match is required. Awards to students who meet general need criteria are determined at the discretion of institutional financial aid administrators, although schools are required to give priority to students with "exceptional need" and to Pell Grant recipients.

Perkins Loans
(BA in millions)

In 1999, $1.1 billion will be available for new Perkins Loans to some 788,000 recipients. The Administration is requesting $60 million in new budget authority for Federal Capital Contributions to supplement the resources from repayments on outstanding loans and from the newly established Federal Perkins Loan Revolving Fund. As in past years, the majority of the funding for new loans made under the Perkins Loans program will come from the repayment of outstanding loans to the program's institutional revolving funds. The Department estimates that nearly $930 million from these repayments will be available in 1999 before subtracting administrative expenses.

The Perkins Loan program provides long-term, low-interest loans to undergraduate and graduate students with demonstrated financial need. Loans are made from institutional revolving funds. Approximately 2,100 participating institutions currently administer Perkins Loans institutional revolving funds, with total assets of about $7.3 billion representing nearly 40 years of Federal capital contributions, institutional matching funds, repayments on previous loans, and reimbursements for cancellations. Institutions provide one dollar for every three dollars of new Federal capital.

Perkins Loan borrowers pay no interest during in-school, grace, and deferment periods, and are currently charged 5 percent interest during the principal repayment period. Undergraduate students can borrow up to $3,000 and graduate and professional students can borrow up to $5,000 each year. The cumulative maximum is $30,000 for combined undergraduate and graduate or professional study.

In addition to the funds available from repayments of outstanding Perkins Loans at the institutional level, the Higher Education Amendments of 1992 established a new source of Federal capital contributions to institutions. Collections from defaulted loans assigned to the Department, funds received as the result of audit findings, and other Perkins Loan funds returned to the Department will be deposited into a new Perkins Loan Revolving Fund and redistributed to institutions starting in 1999. These funds formerly were deposited to a Treasury receipt account. The Department estimates that $40 million from this new Department revolving fund will be available for distribution to institutions as new Federal Capital Contributions in 1999.

The $30 million request for Perkins Loan Cancellations for 1999 reflects the borrowers entering repayment who are expected to seek cancellation of their Perkins loans under the expanded statutory entitlements enacted as part of the Higher Education Amendments of 1992. Eligible borrowers include those who undertake certain public service employment such as teaching in Head Start programs, full-time law enforcement, or nursing.

State Student Incentive Grants

The State Student Incentive Grant (SSIG) program provides dollar-for-dollar Federal matching funds as an incentive for State support of need-based postsecondary student grant assistance. When the program was first authorized in 1972, 28 States had undergraduate grant programs. Now all States have established need-based student grant programs.

Because the program has clearly achieved its original purpose, the Department is once again proposing to eliminate funding for the SSIG program in 1999. Federal support is no longer needed to provide incentives to States to develop and maintain need-based grant programs. Despite decreases in Federal funding for the SSIG program over the last few years, States have increased expenditures for grants to nearly $2 billion. In 1997, States overmatched their Federal SSIG allocations by about 20 to 1.

Direct Loans and Federal Family Education Loans
(BA in millions)

The Department of Education operates two major student loan programs: the Federal Family Education Loan (FFEL) program and the William D. Ford Federal Direct Loan (Direct Loan) program. The Administration is committed to supporting two strong student loan delivery systems, allowing individual institutions to choose which best meets their needs and the needs of their students.

The FFEL program makes loan capital available to students and their families through some 4,800 participating private lenders. There are 36 active State and private nonprofit guaranty agencies which administer the Federal guarantee protecting FFEL lenders against losses related to borrower default. These agencies also collect on defaulted loans and provide other services to lenders.

In order to reduce complexity, improve efficiency for both borrowers and schools, and lower taxpayer costs, a simpler Direct Loan program was established by the Student Loan Reform Act (SLRA) of 1993. Under this program, the Federal Government uses Treasury funds to provide loan capital directly to schools, which then disburse loan funds to students--greatly streamlining loan delivery for students, parents, and schools.

The Direct Loan program began operation in academic year 1994-95 and has now grown to about 35 percent of student loan volume, a level it is projected to sustain over the next few years. As of the third year of operation (1996-97) approximately 1,300 schools--representing about 25 percent of all schools in the Department's student loan programs--were actively participating in the Direct Loan program.

Basic Loan Program Components

Both FFEL and Direct Loans feature four types of loans with similar fees and maximum borrowing amounts:

• Stafford Loans are subsidized, low-interest loans based on financial need. The Federal Government pays the interest while the student is in school and during certain grace and deferment periods. The interest rate varies annually and is capped at 8.25 percent.
• Unsubsidized Stafford Loans are offered at the same low rates as subsidized Stafford Loans, but the Federal Government does not pay interest for the student during in-school, grace, and deferment periods.
• PLUS Loans are available to parents of dependent undergraduate students at slightly higher rates than Stafford or Unsubsidized Stafford Loans, and the Federal Government does not pay interest during in-school, grace, and deferment periods. The interest rate varies annually and is capped at 9 percent.
• Consolidation Loans allow borrowers with multiple student loans who meet certain criteria to combine their obligations and extend their repayment schedules. Under the recently enacted Emergency Consolidation Act of 1997--which is effective through September 30, 1998--borrowers may consolidate under either FFEL or Direct Loans regardless of the underlying loans.

The 1999 Request

The Administration is proposing a series of statutory changes to reduce debt burden and to improve the effectiveness and efficiency of the student loan programs. This effort is part of the government-wide effort to make programs more results-driven, consistent with the Government Performance and Results Act (GPRA) of 1993. Proposed changes include reducing borrower fees, providing greater incentives for default reduction, creating greater comparability between FFEL and Direct Loan program benefits, and restructuring the guaranty agency system into a more performance-based operation.

Borrower-Related Proposals

The Administration proposes to reduce student borrowing costs and increase student benefits by:

• Reducing loan origination fees for all borrowers in 1999 and completely eliminating these fees as of July 1, 2003 for subsidized borrowers, thus increasing the loan dollars available to meet college costs. Under the President's policy, beginning July 1, 1999:
  -- Fees on all loans would be reduced from 4 to 3 percent;
  -- Fees on need-based Stafford loans would be further reduced to 2 percent as of July 1, 2001, 1 percent as of July 1, 2002, and would be eliminated completely as of July 1, 2003.
• Providing a federally-paid interest subsidy benefit for certain student borrowers who perform community service.
• Offering FFEL borrowers the additional flexible options of graduated and extended repayment available in the Direct Loan program under comparable terms.
• Clarifying that any Direct Loan balance remaining after 25 years, which is forgiven under income-contingent repayment, will not be treated as income for Federal tax purposes.
• Allowing borrowers who consolidate subsidized loans into a FFEL Consolidation Loan to maintain interest subsidy benefits associated with the subsidized portions of their Consolidation Loan, as currently provided in Direct Loan Consolidations.
• Reducing the frequency of interest capitalization (and thus the compounding of borrower interest) allowed in the FFEL program, thus standardizing the practice in the FFEL and Direct Loan programs.

Under current law, student loan interest rates will be reduced significantly on July 1, 1998. For the first time, interest rates will be tied to the Government's cost of borrowing, using a 10-year rate plus 1 percent. To date, loan rates have been tied to the 91-day Treasury bill. Many financial aid experts believe the change in rates will have an adverse impact on availability of loans. The Administration will work with Congress and various participants to consider the best means of coping with the scheduled change.

School-Related Proposals

The Administration proposes to reduce institutional burden and simplify program delivery by:

• Requiring a single loan proration formula instead of the multiple computations schools must now calculate. For some programs, proration requirements would be eliminated.
• Providing a multi-year promissory note in both FFEL and Direct Loans, helping to reduce school administrative burden and speed up loan processing time.

Lender and Guaranty Agency Proposals

The Administration is proposing a number of changes in the guaranty agency system to simplify the system. Currently, these State and private nonprofit entities use Federal funds they hold in reserve to pay a small portion of each lender default claim; the balance is funded through Federal payments. Recognizing that the Federal Government is already the ultimate insurer of FFEL loans, the Department is proposing to pay 100 percent of each eligible lender default claim.

With this change, guaranty agencies would no longer need to hold Federal funds in reserve. Therefore, the Administration proposes to recall $1.1 billion in unneeded Federal reserve funds held by guaranty agencies over the next five years--in addition to the $1 billion already subject to recall through the Balanced Budget Act of 1997. Other proposed changes include:

• In place of the current Federal supplemental pre-claims assistance payment to guaranty agencies to help lenders collect delinquent loans, the Department proposes a performance-based lender payment to guaranty agencies tied to agency success in bringing delinquent loans current.
• Requiring periodic recertification of guaranty agency agreements. Department agreements would require public disclosure of specific performance information, annual audits, and submission of timely, accurate, and consistent data to the Department's National Student Loan Data System.
• Replacing the current administrative cost allowance paid to guaranty agencies with a performance-based fee for service payment.
• Reducing the percentage of default collections that guaranty agencies may retain from 27 percent to 18.5 percent.

Loan Programs Management Improvement Proposals

The Department proposes to better manage student loans by:

• Prohibiting the discharge of student loans in bankruptcy. Currently, borrowers may have their loans discharged when they file for bankruptcy. Given the increased availability of repayment options such as income contingent and income-sensitive plans, and the availability of deferments and forbearances, the Department proposes to eliminate the bankruptcy discharge provisions for new loans.
• Requiring schools to pay loan costs incurred during unsuccessful cohort default rate appeals. Under current law, schools remain eligible to participate in FFEL without any additional liability during the cohort default rate appeals process. In order to discourage frivolous appeals and protect taxpayer interests, schools would provide a letter of credit to remain eligible during the appeals process and pay all loan costs associated with loans made during an unsuccessful appeal.

Postsecondary Education Program Management

The Department would spend almost $738 million in 1999 to administer the Federal postsecondary education programs and make payments for services to FFEL guaranty agencies, an increase of $82.1 million over the 1998 level. Of these funds, $568.6 million would support Department administrative activities, primarily for the student financial assistance programs, and $170 million would be paid to guaranty agencies. These funds, which make up more than 65 percent of the Department's overall administrative budget, are drawn from four sources: mandatory funding authorized under Section 458 of the Higher Education Act (83 percent of total funds available), the discretionary Program Administration account (11 percent), a discretionary appropriation covering a portion of administrative costs for the FFEL program (6 percent), and discretionary appropriations for administrative costs associated with facilities loan programs (less than 1 percent). For more details, see the section on Departmental Management.

Higher Education Tax Benefits

The Taxpayer Relief Act of 1997 included several important postsecondary education tax benefits that will save students and families billions of dollars in fiscal year 1999.

• Tax Credits. The HOPE Scholarship tax credit will reimburse families for up to $1,500 for each of the first two years of postsecondary education. An estimated 5.5 million students will receive $4.2 billion in HOPE tax credits in 1999. Lifetime Learning tax credits, worth up to $1,000 in 1999 and up to $2,000 in 2000 and later years, will make postsecondary education more affordable for students beyond their first two years of study, as well as for those taking class part-time to upgrade their job skills. An estimated 7.1 million students will receive $2.5 billion in Lifetime Learning tax credits in 1999. Eligibility for both new higher education tax credits phases out at incomes between $80,000 and $100,000 for joint filers, and at incomes between $40,000 and $50,000 for single filers.
• New Individual Retirement Account rules will promote savings for college by allowing families to withdraw funds from their IRA accounts without penalty and spend the earnings on postsecondary education costs on a tax-free basis.
• Student Loans interest deduction. A new Tax Code provision allows an "above the line" deduction (the taxpayer does not need to itemize in order to benefit) for interest paid in the first 60 months of repayment on private or Government-backed loans for postsecondary education. The maximum deduction will be $1,500 in 1999, $2,000 in 2000, and $2,500 in 2001 and beyond. Eligibility for this deduction is phased out at incomes between $60,000 and $75,000 for joint filers and between $40,000 and $55,000 for single filers.
• Employer-provided education benefits. Section 127 of the Tax Code, which allows workers to exclude from their taxable income up to $5,250 of employer-provided education benefits for undergraduate courses, was extended through June 1, 2000.

Higher Education Programs Overview

The 1999 President's budget for Higher Education Programs contributes directly to the Department of Education's mission of promoting equal access to education and educational excellence throughout the Nation. This is accomplished through outreach and support services aimed at helping disadvantaged students enter and complete a postsecondary education, assisting institutions that serve such students, targeting Federal funds to areas of national need, efforts to improve the quality of postsecondary education.

The Department is requesting a significant increase for the TRIO programs to expand outreach and support services for disadvantaged students and to support new projects in underserved areas, while at the same time proposing a new College-School Partnerships program to encourage low-income students to complete high school and pursue postsecondary education. A new Early Awareness Information program would help middle school students--especially low-income students--begin to think about college, provide information on the academic preparation required to enter college, and help them identify sources of financial aid to help pay for postsecondary education.

To support institutions that serve disadvantaged students, the Department is requesting significant funding increases for the Strengthening Historically Black Colleges and Universities, Hispanic-serving Institutions, Strengthening Institutions, and Minority Science Improvement programs. A new Strengthening Tribal Colleges and Universities program would support institutions that serve Native American students.

The Higher Education Programs also help develop a skilled workforce and provide support in areas of critical national need. New Teacher Recruitment and Preparation programs would help recruit new teachers for high poverty areas that have the most difficulty recruiting and retaining a qualified teaching force. A new National Need Graduate Fellowship program would combine the purposes of the previously funded Graduate Assistance in Areas of National Need, Patricia Roberts Harris Fellowship, and Jacob K. Javits Fellowship programs. Increased funding is also sought for the International Education and Foreign Language Studies programs.

Continued support is also sought for the Fund for the Improvement of Postsecondary Education, which makes awards for small institutional projects aimed at improving the overall quality of postsecondary education. A new program called Learning Anytime Anywhere Partnerships would support pilot projects using distance learning technology and other innovations to enhance the delivery of postsecondary education and lifelong learning opportunities. The new Access and Retention Innovations program would assess the impact of alternative methods of packaging student financial assistance.

Title III: Aid for Institutional Development
(BA in millions)

The 1999 request for Title III supports the Administration's strong commitment to high quality education for the Nation's minority and disadvantaged students. A $44 million or 20 percent overall increase in Title III funding would help provide equal educational opportunity and strong academic programs for such students and help achieve greater financial stability for the institutions that serve these students. The Department is requesting a $16 million or 13.5 percent increase for Historically Black Colleges and Universities (HBCUs) and, as part of the President's Hispanic Initiative, more than doubling support for Hispanic-serving Institutions. In addition, a new Strengthening Tribal Colleges and Universities program would provide $5 million to support institutions that serve Native Americans. Other institutions with limited resources enrolling a high percentage of needy students (Part A institutions) would receive an 8.2 percent increase over the 1998 level.

The request also provides a $2.2 million or 43 percent increase for the Minority Science Improvement Program (MSIP), which under the Administration's HEA reauthorization proposal would move from Title X to Title III. MSIP helps improve science and engineering programs at postsecondary institutions with predominantly minority enrollments. The reauthorization also would incorporate the Historically Black College and University Capital Financing Program, which issues Federal guarantees on private sector funding to facilitate low-cost construction financing for HBCUs, into Title III.

Fund for the Improvement of Postsecondary Education

The 1999 request for the Fund for the Improvement of Postsecondary Education (FIPSE) would provide continued support for innovative projects that enhance postsecondary education quality and cost effectiveness. The request would fund 236 new and continuing projects under the Comprehensive program in areas of postsecondary education access, retention and completion, workforce preparation, school-college partnerships, improvement of campus environments, curricula reform, and faculty development. In response to growing concern over the rising costs of higher education, the Department is proposing to increase FIPSE's support for restructuring projects that address issues of cost containment at postsecondary institutions. The request also would continue support for programs in areas of national need, including exchange programs with the European Community and the NAFTA countries, and for dissemination of FIPSE project results.

International Education and Foreign Language Studies

The 1999 request would provide continued support for Domestic and Overseas programs designed to strengthen the American education system in the area of foreign languages and international studies. These programs support comprehensive language and area study centers within the United States, research and curriculum development, and opportunities for American scholars to study abroad. In addition to promoting general understanding of the peoples of other countries, the Department's international programs also serve important economic, diplomatic, defense, and other security interests of the United States. The request would fund approximately 334 projects and 1,050 fellowships.

Institute for International Public Policy

The 1999 request maintains support for the Institute's efforts to encourage under-represented minorities to enter the Foreign Service of the United States and serve in private international voluntary organizations.

Minority Teacher Recruitment/Teacher Recruitment and Preparation
(BA in millions)

The Administration's proposal for the reauthorization of Title V of the Higher Education Act would replace numerous small, disconnected authorities with two programs focused on recruiting new teachers for the high-poverty urban and rural areas that have the most difficulty in recruiting and retaining a qualified teaching force, and preparing those teachers to teach all students to high standards. The request for these new programs in 1999 is $67 million--the same as the proposed authorization level--and $350 million over five years.

The Recruiting New Teachers for Underserved Areas program would award competitive grants to partnerships between institutions of higher education and schools districts that serve concentrations of children from low-income families. Collaboratively, the partners would conduct an analysis of the teaching needs in the districts and identify a pool of potential teachers who can be trained to fill those needs. The partners would then recruit individuals and prepare them to take teaching positions in the district.

The Lighthouse Partnerships program would provide competitive grants to partnerships among "lead" institutions that have an exemplary record in delivering high-quality preparation of teachers for urban and rural schools in poor areas and "partner" institutions that want to improve their teaching programs. The grants would support refinement and documentation of the lead institutions' programs, technical assistance by the lead institution on improvement of the partners' programs, implementation of improved practices by the partners, and joint activities with school districts participating in the partnership.

Both new authorities would permit the Department to reserve a small portion of the funding for national leadership activities and evaluation. In 1999 the Department would use $2 million for this purpose.

Urban Community Service

This program helps institutions of higher education serve as a resource for urban communities attempting to solve urban problems. The program is proposed for elimination since efforts to solve the social and economic problems of urban areas are more appropriately addressed under other Department programs and initiatives as well as programs and budgets of other Federal and State agencies.

Mary McLeod Bethune Memorial Fine Arts Center

No additional funds are requested for the Mary McLeod Bethune Memorial Fine Arts Center in 1999. In fiscal year 1998, the project received the remaining balance of funding allowed by the authorizing statute. Since 1988, a total of $21.9 million in Federal construction grants has been provided noncompetitively to Bethune-Cookman College for this project.

Federal TRIO Programs
(BA in millions)

The TRIO programs fund postsecondary education outreach and student support services that encourage individuals from disadvantaged backgrounds to enter and complete college. These services complement the Department's student financial aid programs by helping to ensure postsecondary education access for disadvantaged students and by providing them with the support they need to successfully complete postsecondary programs. Nearly 744,000 students would benefit from these programs under the 1999 request.

The Administration is proposing increased TRIO funding in part to support its Hispanic Initiative and, through its HEA reauthorization proposal, is recommending that priority points be added to applicants proposing projects in underserved geographic areas. This priority reflects changing national demographics and is expected to increase the number of Hispanic students served by the TRIO programs.

New awards will be made in both the Upward Bound and McNair programs, while continuation awards will be made in the remaining TRIO programs. Student Support Services, which research shows to have a positive effect on college grade point average and retention, would provide remediation and more intensive support services to an estimated 179,478 disadvantaged undergraduate students. Talent Search would identify and encourage an estimated 332,245 students from disadvantaged backgrounds to graduate from high school and enroll in college. Educational Opportunity Centers would provide assistance and information to an estimated 169,640 adults seeking to pursue a program of postsecondary education. Upward Bound, which has been shown to improve the academic preparation of participants while in high school, would provide intensive academic support services to an estimated 56,462 disadvantaged high school students to generate the skills and motivation needed to pursue a program of education beyond high school. The McNair program would support scholarly activities and other assistance to help prepare an estimated 2,725 disadvantaged undergraduates who want to pursue graduate or doctoral study. A set-aside for Innovative and Experimental projects, proposed as part of the reauthorization of the HEA, would fund 6 short-term grants to encourage grantees to pursue new educational approaches that would lead to program improvements.

College-School Partnerships

This proposed new program would encourage academic achievement and college enrollment among students in low-income schools.

National Early Intervention Scholarships and Partnerships

The Department requests no funding for the National Early Intervention Scholarship and Partnership program. This program is overly complex and would require a much greater Federal investment to have a national impact. Its purpose would be better served by the proposed College-School Partnership program.

Scholarships and Fellowships
(BA in millions)

Level funding for Byrd Honors Scholarships would continue awards at the $1,500 authorized level for four cohorts of undergraduate college students. Over 26,000 students would be served, including 6,500 new scholars.

Funding is not requested for new awards under the Graduate Assistance in Areas of National Need (GAANN) program. Continuing GAANN awards would be funded under the proposed National Need Graduate Fellowship program, which would incorporate the purposes of the GAANN program.

The Administration requests $37.5 million for the proposed National Need Graduate Fellowships program, which would reward excellence and support financial opportunity through fellowships to outstanding students studying in areas of critical national need. Participating graduate schools would be required to recruit students from under-represented groups. The 1999 request would support an estimated 195 fellows while also funding 354 continuing GAANN and Javits fellows.

State Grants for Incarcerated Youth Offenders

This program makes formula grants to State correctional agencies to assist and encourage incarcerated youths to acquire functional literacy skills and life and job skills. While in prison, participants will be provided an opportunity to pursue a postsecondary certificate or degree and to receive employment counseling. The Department is not requesting new funds for this program because incarcerated youths will be eligible to receive career preparation and literacy services under the pending vocational and adult education bills.

Early Awareness Information

This new program, initially authorized in 1992 but never funded, would provide information on preparation for college to over 10 million middle school students, with particular emphasis on students from high-poverty areas. Through pamphlets and videos, community events, and public service announcements, the program would educate students and their parents about the importance of higher education and the many steps necessary to attend college. It would inform families about the academic course work that is needed in middle school and high school to gain entrance into college and about the financial aid opportunities available to finance that education.

Learning Anytime Anywhere Partnerships

This new program would support pilot projects using distance learning technology and other innovations to enhance the delivery of postsecondary education and lifelong learning opportunities to students and adults. The program would encourage partnerships between educational institutions, community agencies, software and other technology developers, learning assessment specialists, and private industry employers.

Access and Retention Innovations

The Department requests $20 million for a new research program aimed at assessing the effects of alternative packages of Federal student aid--in combination with institutional aid and other resources--on the postsecondary education access and retention of low-income students and students from under-represented groups. Projects would be conducted in cooperation with postsecondary institutions, and funds would provide administrative support as well as additional student aid to selected students.

Academic Facilities
(BA in millions)

The academic facilities programs were created to provide financial assistance to institutions of higher education for the construction, reconstruction, or renovation of academic facilities. Funds are requested in 1999 solely to manage and service the existing portfolios of facilities loans and grants that were made in prior years.

Howard University
(BA in millions)

The 1999 request would maintain support for Howard's academic operations, research, endowment, construction, and the Hospital, while giving the University broad flexibility to allocate funds to best meet its needs. The request reflects the Administration's support for maintaining and improving the quality and financial strength of an institution that provides a major avenue of postsecondary access and opportunity for African Americans.

Historically Black College and University Capital Financing Program
(BA in millions)

The Historically Black College and University (HBCU) Capital Financing Program promotes diversity and equal opportunity in American higher education by providing a Federal guarantee for bond financing for the repair and construction of facilities at HBCUs. By statute, the total amount of loan principal guaranteed plus accrued unpaid interest may not exceed $375 million. Of the $375 million, $250 million is allocated for loans to public HBCUs and $125 million for loans to private HBCUs. Since the subsidy costs of the program are estimated to be zero, the 1999 request includes only $96,000--down from $104,000 in 1998--to cover the Federal administrative costs of the program and to maintain the HBCU Capital Financing Advisory Board, which is appointed by the Secretary and advises the Secretary on the most effective means of implementing a construction financing program to address the needs of the Nation's HBCUs.

[Vocational and Adult Education] [Educational Research and Improvement]

Direct any questions to Martha Jacobs, Budget Service