    [Budget Supplement]
    [Creating Opportunity and Encouraging Responsibility]
    [8. Investing in Education and Training]
    [From the U.S. Government Printing Office, www.gpo.gov]

      ----------------------------------------------------------------------

      We have worked on a simple strategy for education. We believe in high standards. We believe in high
    expectations. We believe in high levels of opportunity. We believe in high technology. And we believe the doors
    of college should be open to every single American citizen.

                                          President Clinton
                                          February 1996

      ----------------------------------------------------------------------
      Today's most successful workers are those with technical skills and a
    firm educational footing who continue to learn throughout their careers
    in order to compete successfully in this fast-changing economy.
      In recent years, education and wages have become increasingly
    intertwined. Generally, those with the best skills and education have
    made steady progress, enjoying higher living standards. Those without
    the requisite skills and education have fallen behind. Tomorrow's
    workers face an even greater challenge: As the very nature of work
    changes with technological innovation, employers will demand even more
    highly-skilled workers. The best-paying jobs increasingly will go only
    to those with education and training beyond high school.
      For the most part, our Nation places responsibility for education and
    training on State and local governments, families and individuals, and
    the private sector. Nevertheless, the Federal Government plays a
    crucial, if limited, role in providing education for a lifetime--from
    pre-school to adult career training.
      Federal resources help States improve the quality of education and
    training for the disadvantaged and people with disabilities; support
    State- and locally-designed elementary and secondary school reform; and
    help low- and middle-income families gain financial access to
    postsecondary education and skill training through loans and grants. To
    help States raise student achievement, the President has consistently
    worked to make schools safer, improve teacher quality, move technology
    into the classroom as quickly as possible, raise academic standards, and
    better prepare students for college and the new workplace.
      The budget reaffirms the President's longstanding commitment to
    education and training. It builds on previous legislative and management
    reforms, and continues support for policies that the President has
    articulated since assuming office in 1993.
      Over seven years, the budget proposes $311 billion for education and
    training, $61 billion more than the 1996 congressional budget resolution
    (see Chart 8-1). For selected programs, the budget proposes an increase
    of $5.9 billion, or 24 percent, over the 1993 level (see Table 8-1).
      The Education Department's programs play a key role in the Nation's
    efforts to improve the quality of elementary and secondary education for
    all children, and to help low- and middle-income families pay for
    postsecondary education and skill training. For 1997, the budget
    proposes $25.6 billion in discretionary funds for department programs.
      ----------------------------------------------------------------------

    Table 8-1.  THE BUDGET INCREASES SPENDING ON MAJOR EDUCATION AND TRAINING PROGRAMS BY $3.4 BILLION, OR 13 PERCENT, OVER 1995, AND BY $5.9 BILLION, OR 24
                                                                       PERCENT, SINCE 1993
                                                         (Budget authority, dollar amounts in millions)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Dollar   Percent   Dollar   Percent
                                                                                1993     1995       1996        1997     Change:  Change:   Change:  Change:
                                                                               Actual   Actual   Estimate\1\  Proposed   1995 to  1995 to   1993 to  1993 to
                                                                                                                          1997      1997     1997      1997
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Head Start..............................................................    2,776    3,534       3,631       3,981      +447     +13%    +1,205     +43%
    Goals 2000..............................................................  .......      372         486         491      +119     +32%      +491       NA
    Charter Schools.........................................................  .......        6          20          40       +34    +567%       +40       NA
    Title I--Ed for disadvantaged...........................................    6,709    7,228       7,328       7,679      +451      +6%      +970     +14%
    Education Technology....................................................  .......       56          74         357      +301    +538%      +357       NA
    Safe and Drug-Free Schools..............................................      582      466         500         540       +74     +16%       -42     -10%
    Special education.......................................................    2,966    3,253       3,342       3,553      +300      +9%      +587     +20%
    Eisenhower/Ch. 2 teacher training.......................................      682      599         599         610       +11      +2%       -72     -11%
    Summer jobs for youth...................................................      849      867         635         871        +4      +*%       +22      +3%
    Job Corps...............................................................      966    1,089       1,121       1,154       +65      +6%      +188     +19%
    Out-of-School Youth.....................................................  .......  .......  ............       250      +250       NA      +250       NA
    School-to-Work opportunities............................................  .......      245         372         400      +155     +63%      +400       NA
    Vocational and adult education..........................................    1,474    1,383       1,383       1,420       +37      +3%       -54      -4%
    Adult/dislocated worker training........................................    1,666    2,226       2,176       2,240       +14      +1%      +574     +34%
    Honors scholarships.....................................................  .......  .......  ............       130      +130       NA      +130       NA
    Pell grants\2\..........................................................    5,633    5,444       6,189       6,425      +981     +18%      +792     +14%
    College work-study......................................................      616      617         617         679       +62     +10%       +63     +10%
                                                                             -------------------------------------------------------------------------------
      Total.................................................................   24,919   27,385      28,473      30,820    +3,435     +13%    +5,901     +24%
    Student loans (dollar amount of loans, in millions):
      New loans:
        Direct loans........................................................  .......    5,200      10,400      13,200    +8,000    +154%   +13,200       NA
        Guaranteed loans....................................................   16,100   18,500      14,800      13,200    -5,300     -29%    -2,900     -18%
      Loan consolidations...................................................    1,500    3,400       4,900       6,100    +2,700     +79%    +4,600    +307%
                                                                             -------------------------------------------------------------------------------
      Total loan volume.....................................................   17,600   27,100      30,100      32,500    +5,400     +20%   +14,900     +85%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    NA = Not applicable.
    *Less than $500 thousand or 0.5 percent.
    \1\Includes Administration's proposed adjustments to 1996 continuing resolution levels.
    \2\To permit comparability, data are shown at the program level, not budget authority.

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    Preparing Children for School

      Head Start: A healthy, caring family environment is the best
    preparation for school. For over 30 years, Head Start has helped
    families create this environment by taking a comprehensive approach to
    child development--improving children's learning skills, health,
    nutrition, and social competency. Head Start involves parents in their
    children's learning,
    [[Page 76]]
    and links children and their families to a wide
    array of services in their communities.
      To ensure that all Head Start programs consistently deliver the high-
    quality services needed to produce good results for children, the
    President proposed, and Congress enacted, major quality improvements in
    1994. This budget builds on these important gains by continuing to
    support local efforts to improve the quality of instruction, attract and
    retain better workers, improve child-to-staff ratios, and upgrade
    facilities.
      The budget proposes $3.98 billion for Head Start, $447 million more
    than in 1995, which would enable another 46,000 children to participate.
    The budget proposes to enable a million children to participate by 2002
    (see Chart 8-2).

    Elementary and Secondary Education

      Education is a national priority and a State and local responsibility.
    Americans widely support State and local control of elementary and
    secondary education. At the same time, the Federal Government over the
    years has helped to improve areas of critical concern to all Americans,
    such as teacher education or schooling for low-income children or those
    with disabilities.
    [[Page 77]]
    [[Page 78]]
      This Administration has energized State and local efforts to raise the
    educational achievement of every child and to create safe learning
    environments. It also has worked with Congress to improve the largest
    Federal education programs for disadvantaged children, focusing them
    more on results and less on process.

      Goals 2000: This Administration initiative, enacted in 1994, supports
    State efforts to raise academic achievement for all students. Goals 2000
    helps States and communities focus on results. It builds on the National
    Education Goals, first articulated by the Nation's governors (led by
    then-Governor Bill Clinton) and President Bush in 1989, which provide
    clear targets but encourage States to develop their own means to achieve
    them.
      ----------------------------------------------------------------------

                                   HOW STATES USE GOALS 2000 TO ADVANCE THEIR REFORMS

      In Maryland, scores on tests designed to measure progress toward the State's standards are increasing year
    after year.

      In Michigan, 13 Upper Peninsula school districts are working with Bay Mills Community College and Lake
    Superior University to train teachers to use technology to improve math and science teaching and learning.

      In Harrison County, Kentucky, Goals 2000 is helping train parents as volunteer instructional aides and
    reaching out to parents through cable television programs and homework hotlines.

      ----------------------------------------------------------------------
      States and localities receive funds to set their own challenging
    academic standards for all children, then design their curriculum,
    teacher training, educational technology, instruction methods, and
    assessment tools around them. Goals 2000 also helps States and schools
    involve parents in the education of their children. Currently, nearly
    all States participate in the program.
      The budget proposes $491 million for the program, 32 percent more than
    in 1995. Under it, every State and over 12,000 schools could receive
    grants.

      Charter Schools: Charter schools are public schools that parents,
    teachers, and communities create, and that States free from most rules
    and regulations and hold accountable for raising student achievement.
    Begun as a grassroots movement in 1991, and supported by Federal start-
    up funds since 1995, public charter schools now number 250 nationwide,
    some of them already showing results in higher student test scores and
    lower drop-out rates. The budget proposes $40 million for public charter
    schools in 1997, and increases over the next five years to fund start-up
    costs for up to 3,000 such new schools.
      Title I--Education for the Disadvantaged: Title I provides funds to
    raise the educational achievement of disadvantaged children. In 1994,
    the President proposed and Congress adopted changes to: focus Title I
    resources better on areas with the largest concentrations of low-income
    children; set the same high standards for those children as for all
    others; and hold schools accountable for progress toward achieving those
    standards. Schools now have much more flexibility in using these funds.
    The budget includes $7.7 billion, six percent more than in 1995.
      Education Technology: Technology can expand learning opportunities for
    all students and help raise student achievement. Yet many school
    districts lack the necessary resources to integrate technology fully
    into their school curricula.
      The President has launched a national mission to ensure that all
    children are technologically literate by the dawn of the 21st Century,
    with communication, math, science, and critical thinking skills
    essential to succeed in the Information Age. Specifically, the President
    proposes a Technology Literacy Challenge Fund, with four goals: (1)
    helping States put enough computers in every classroom; (2) connecting
    these computers to the Information Superhighway; (3) giving teachers the
    training they need to integrate technology into teaching; and (4)
    fostering the development of high quality, widely available
    [[Page 79]]
    educational software. To be eligible for Federal funds, a State must meet three challenges:
      develop a strategy that enables every school in the State to
              meet the four goals by the dawn of the 21st Century, complete
              with benchmarks and timetables;
      demonstrate significant private sector participation and
              commitments that should at least match the amount of Federal
              support; and
      publicly report at the end of every school year on progress in
              achieving its benchmarks.
      The budget requests $250 million for the Challenge Fund in 1997, and
    $2 billion over five years.
      The budget also expands the successful Technology Learning Challenge
    program, which in 1995 began providing school-centered, public-private
    partnerships with matching Federal funds to support projects that
    integrate technology into the curriculum. In 1995, $10 million funded 19
    partnerships and leveraged over $70 million in other public- and
    private-sector resources. The budget provides $75 million for the
    program.

      Teacher Training: The Eisenhower Professional Development program
    helps States invest in training teachers and other educators so that
    they, in turn, can help all children reach the State's challenging
    academic standards. The President proposed, and Congress enacted, major
    improvements in 1994 to ensure that the training is of high enough
    quality and sufficient duration to pay off in the classroom. For this
    purpose, the budget combines funding for the Eisenhower program with
    general funds now in Title VI of the Elementary and Secondary Education
    Act; all told, it provides $610 million for these activities.
      Safe and Drug-Free Schools and Communities: Students can reach their
    full potential only if they can learn in safe and disciplined
    environments. This program helps 97 percent of the Nation's school
    districts implement anti-drug and anti-violence programs in our schools.
    It helps students resolve conflicts before they escalate into tragedy,
    teaches them the dangers of drug use, and helps schools increase
    security measures. The budget includes $540 million for this program, a
    $74 million increase over the 1995 level.
      Special Education: States have made considerable progress in providing
    children with disabilities ``free appropriate public education,'' as the
    Individuals with Disabilities Education Act (IDEA) calls for. The
    primary challenge now is to improve the quality of that education so
    that children with disabilities can, as much as possible, meet
    challenging standards that have been established for all children, and
    be prepared to lead productive, independent adult lives.
      To that end, the Administration proposed amendments to IDEA in 1995 to
    link individualized education programs to participation in the general
    curriculum; require that children with disabilities be included in
    State- and district-wide assessment programs; and give States and
    schools greater flexibility to use IDEA funds to meet children's needs
    in the regular classroom.
      The budget provides $3.6 billion for special education, nine percent
    more than in 1995.

    Postsecondary Education

      The Federal Government's primary roles in postsecondary education and
    skill training are to (1) help students finance their education; and (2)
    help ensure the availability of skill training and access to good jobs
    for youth and adults, including dislocated workers. (For information on
    skill training, see the section on the G.I. Bill for America's Workers.)
      Postsecondary costs continue to climb rapidly, outpacing the ability
    of many working families to meet them without sizable assistance. To
    that end, the budget proposes more aid to more individuals than ever
    before (see Chart 8-3). It also proposes a phased-in, $10,000 tax
    deduction to help families pay for education and career training beyond
    high school. (For more details on the tax deduction, see Chapter 12.)

      Student Loans: An estimated 5.7 million individuals will borrow over
    $32 billion through the Federal student loan programs in 1997. Families
    at any income level can receive loans, but needy students can get
    interest
    [[Page 80]]
    subsidies. The loans finance study toward undergraduate or
    graduate degrees, or short-term vocational training programs. The annual
    maximum loan amount varies from $2,625 for a first-year student
    financially dependent on his or her parents, to $18,500 for a graduate
    or professional program student.
      Eligible institutions of higher education may participate in either
    the Federal Direct Loan Program (FDLP) or the Federal Family Education
    Loan Program (FFELP). FDLP, enacted at the President's request in 1993,
    offers an efficient, streamlined, low-cost system for students, parents,
    and schools. It also offers flexible repayment options for students,
    including repayment based on income. The Education Department estimates
    that direct loans will make up half of total loan volume in academic
    year 1996-97 (see Chart 8-4).

      The FFELP, created in 1965, is a bank-based program, with over 7,000
    commercial and other lenders receiving Federal guarantees through 36
    non-profit and State intermediaries, 90 secondary markets eventually
    holding most loans, and dozens of servicing companies. Federal and
    school administrative burdens and complexities are much greater and
    costlier under FFELP.
      The budget proposes legislative changes to both programs to save money
    without increasing costs or curtailing benefits to borrowers.

      Pell Grants: Pell grants provide need-based grants to low- and middle-
    income undergraduates for associate and bachelors degree programs and
    vocational training. In the 1995-96 academic year, about 3.6 million
    students, a fifth of all college students, are receiving grants. Over 61
    percent of the recipients come from families with incomes under $15,000,
    and over 90 percent from families with incomes under $30,000.
    [[Page 81]]
      Pell grants help raise the participation and graduation rates of low-
    income students in postsecondary programs. Recipients from the poorest
    families are twice as likely to earn a bachelor's degree as are college
    students from similar families without grants.
      For 1997, the budget would raise the maximum Pell grant to $2,700, a
    $360 increase over 1995. It also would continue to raise the maximum
    award by three percent a year, providing a maximum award of $3,128 in
    2002.

      Presidential Honors Scholarships: The President proposes to create an
    achievement-based scholarship program, rewarding the best and the
    brightest of high school students. This program would grant $1,000
    honors awards to the top five percent of graduating students in every
    secondary school in the Nation, making clear the Government's commitment
    to excellence for all children. The budget requests $130 million for
    this program.
      College Work-Study: Work-study helps needy undergraduate and graduate
    students through part-time employment, rewarding their hard work and
    commitment to education. The President proposes a significant expansion
    over the next four years, enabling the program to serve a million
    students a year by 2000. The budget proposes $679 million, 10 percent
    more than in 1995.

    G.I. Bill for America's Workers

      Most people change jobs and get new skills by themselves or through
    employers. For others who need help, the Federal Government has
    supported State and private efforts over the last 30 years to provide
    it, but with mixed results.
      Last year, the President proposed to dramatically overhaul the
    complex, inefficient structure of Federal job training programs through
    the G.I. Bill for America's Workers. It would consolidate some 70
    programs into a single, integrated workforce development
    [[Page 82]]
    system. It would make the programs more effective by cutting bureaucracy,
    streamlining administration, and improving accountability by freeing
    States and localities to focus on results, not process.
      As of this writing, Congress was considering legislation based on the
    principles of the G.I. Bill. House- and Senate-passed bills differ, but
    final legislation should embody the President's vision of fostering
    individual opportunity by: giving workers the resources--i.e., Skill
    Grants--and information they need to make good training choices;
    providing access to employment services through customer-friendly,
    ``One-stop'' career centers; and designing youth programs based on the
    School-to-Work Opportunities Act. But, because the new law may not take
    full effect until 1998, the budget proposes funding for the separate
    programs that would remain in place until then.
      The budget provides sizeable new support for those with the biggest
    job problems--out-of-school youth in low-income areas--building on
    lessons of the past and relying on locally-tailored designs. It proposes
    to maintain support for programs that come under the G.I. Bill. To
    ensure that employers comply with Federal workplace laws, it maintains,
    and often substantially reforms, enforcement programs.

      Out-of-School Youth Opportunities Program: Recognizing the special
    problems of out-of-school youth, the budget proposes $250 million for
    new competitive grants to the lowest-income urban and rural areas with
    major youth unemployment problems. These communities would have to
    provide matching funds from State, local, or private sources. The Labor
    Department would award funds based on the quality of applications--that
    is, to those with the best chance of substantially increasing employment
    among youth in the area.
      In a related proposal, the Administration's plan to fund a second
    round of Empowerment Zones and Enterprise Communities for distressed
    communities includes $50 million for the Labor Department to support a
    ``Jobs for Residents'' component. (For more information on the
    Empowerment Zones and Enterprise Communities program, see Chapter 5.)

      School-to-Work: School-to-Work, which the Education and Labor
    Departments administer jointly, gives States and communities competitive
    grants to build comprehensive systems to help young people move from
    high school to careers or postsecondary training and education. Young
    people can prepare for high-skill, high-wage careers; receive top-
    quality academic and occupational training; and pursue more education or
    training. And businesses get the trained workers they need to stay
    globally competitive.
      By mid-1996, 27 States and 91 local partnerships will have received
    grants to implement their school-to-work systems. The budget proposes
    $400 million for the program, a 63 percent increase over 1995. With it,
    the Government could allocate implementation grants to nearly every
    State.

      Summer Youth: The Summer Youth Employment and Training Program (SYETP)
    gives many urban and rural disadvantaged students their first work
    experiences, and localities may include an academic component that
    reenforces the skills they have learned during the school year. Under
    the G.I. Bill, SYETP would continue to provide these services, but would
    be fully integrated into each local school-to-work system.
      For 1996, Congress sought to eliminate SYETP, but the President is
    committed to ensuring that it continues. The budget expands the program
    to provide 574,000 opportunities for the summer of 1997.

      Job Corps: The Job Corps provides intensive skill training, academic
    and social education, and support services to severely disadvantaged
    young people in a controlled residential setting. The budget provides
    $1.2 billion to fund opportunities for 68,000 young people.
      Dislocated Workers and Low-Income Adult Training: The budget proposes
    $2.2 billion for Job Training Partnership Act programs that provide
    training, job search assistance, and related services to laid-off
    workers and economically disadvantaged adults. When the new workforce
    development system begins operating in 1998, these funds would finance,
    among other things, Skill Grants with which adults pay for the training
    of their choice.