    [Appendix]
    [Detailed Budget Estimates by Agency]
    [Department of Education]
    [From the U.S. Government Printing Office, www.gpo.gov]

                         THE BUDGET FOR FISCAL YEAR 1998

    [[Page 415]]

                             DEPARTMENT OF EDUCATION

                  OFFICE OF ELEMENTARY AND SECONDARY EDUCATION

                                  Federal Funds

    General and special funds:

                                Education Reform

        For carrying out activities authorized by titles III and IV of the
    Goals 2000: Educate America Act, [and] the School-to-Work Opportunities
    Act, and section 3132 of the Elementary and Secondary Education Act of
    1965, [$691,000,000] $1,245,000,000, of which [$476,000,000]
    $603,500,000 for the Goals 2000[: Educate America] Act and $200,000,000
    for the School-to-Work Opportunities Act shall become available on July
    1, [1997] 1998, and remain available through September 30, [1998] 1999:
    Provided, That none of the funds appropriated under this heading shall
    be obligated or expended to carry out section 304(a)(2)(A) of the Goals
    2000[: Educate America] Act, except that no more than $1,500,000 may be
    used to carry out activities under section 314(a)(2) of that Act:
    Provided further, That section 315(a)(2) of the Goals 2000 Act shall not
    apply: Provided further, That up to one-half of one percent of the
    amount available under section 3132 shall be set aside for the outlying
    areas, to be distributed on the basis of their relative need as
    determined by the Secretary in accordance with the purposes of the
    program: Provided further, That if any State educational agency does not
    apply for a grant under section 3132, that State's allotment under
    section 3131 shall be reserved by the Secretary for grants to local
    educational agencies in that State that apply directly to the Secretary
    according to the terms and conditions published by the Secretary in the
    Federal Register. (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Goals 2000:

    00.01   State and local education
              systemic improvement..........         321         673         605
    00.02   Parental assistance.............          10          15          15
                                               ---------   ---------  ----------
    00.91     Total goals 2000..............         331         688         620
    01.01 School-to-work opportunities......         149         332         200
    02.01 Technology Literacy Challenge Fund                                 425
                                               ---------   ---------  ----------
    10.00   Total obligations...............         480       1,020       1,245
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         265         329
    22.00 New budget authority (gross)......         530         691       1,245
    22.21 Unobligated balance transferred to
            other accounts..................          -2
    22.22 Unobligated balance transferred
            from other accounts.............          16
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         809       1,020       1,245
    23.95 New obligations...................        -480      -1,020      -1,245
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         329
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         530         691       1,245
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         322         532         861
    73.10 New obligations...................         480       1,020       1,245
    73.20 Total outlays (gross).............        -271        -691        -730
    73.40 Adjustments in expired accounts...           1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         532         861       1,376
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           7          83         149
    86.93 Outlays from current balances.....         264         608         581
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         271         691         730
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         530         691       1,245
    90.00 Outlays...........................         271         691         730
    ---------------------------------------------------------------------------
        Note.--Includes $425 million in budget authority in 1998 for activities
    previously financed through the Department of Education, Office of
    Educational Research and Improvement, Education Research, Statistics, and
    Improvement account. The comparable amount for 1997 is $200 million and zero
    in 1996, since the program was first funded in 1997.

        Funds help States and localities undertake comprehensive education
    reform, create State and local systems of school-to-work transition for
    students, and implement educational technology plans.

        Goals 2000:
            State and local education systemic improvement.--State grants
        support State and local education improvement efforts to help all
        students reach challenging academic standards. At least 90 percent
        of the funds are provided to local educational agencies. Funds also
        support evaluation of educational reform efforts.
            Parental assistance.--Centers in 42 States would continue to
        help provide parents with knowledge and skills they need to
        participate effectively in their children's education.

        School-to-Work Opportunities.--School-to-work programs are jointly
    administered by the Departments of Education and Labor. An identical
    amount is provided for the Department of Labor to support these
    activities. Competitive, 5-year grants are awarded to States that have
    completed and are ready to implement their school-to-work plans. Thirty-
    seven States are currently in their first, second, or third year of
    these grants. Requested funds would enable all States to participate
    fully.

        Direct grants are also provided to local partnerships serving young
    people who live in urban and rural areas characterized by high-poverty,
    as well as partnerships that serve Indian youth. These funds also
    support a national evaluation, research, and development activities to
    provide national leadership and analysis of school-to-work opportunities
    initiatives.

        Technology Literacy Challenge Fund.--All States will receive the
    second year of 5-year grants as part of the President's plan to provide
    States and school districts with $2 billion over 5 years for computers,
    connections, training, and software, in order to achieve the President's
    four goals for fully integrating technology into schools.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           2           2           4
    25.2  Other services....................           3           6           6
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    41.0  Grants, subsidies, and
            contributions...................         474       1,011       1,234
                                               ---------   ---------  ----------
    99.9    Total obligations...............         480       1,020       1,245
    ---------------------------------------------------------------------------

                         Education for the Disadvantaged

        For carrying out title I of the Elementary and Secondary Education
    Act of 1965, and section 418A of the Higher Education Act,
    [$7,698,469,000] $8,077,266,000, of which [$6,380,114,000]
    $6,755,165,000 shall become available on July 1, [1997] 1998, and shall
    remain available through September 30, [1998] 1999, and of which
    $1,298,386,000 shall become available on October 1, [1997] 1998 and
    shall remain available through September 30, [1998] 1999, for academic
    year [1997-1998] 1998-1999: Provided, That

    [[Page 416]]

    [$6,194,850,000] $6,191,350,000 shall be available for basic grants
    under section 1124: Provided further, That up to [$3,500,000] $4,000,000
    of these funds shall be available to the Secretary on October 1, [1996]
    1997, to obtain updated local-educational-agency-level census poverty
    data from the Bureau of the Census: Provided further, That $999,249,000
    shall be available for concentration grants under section 1124(A),
    $350,000,000 shall be available for targeted grants under section 1125,
    [and $7,000,000] $10,000,000 shall be available for evaluations under
    section 1501, and not more than $7,500,000 shall be reserved for section
    1308, of which not more than $3,000,000 shall be reserved for section
    1308(d). (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Grants to local educational
                agencies:
    00.01     Basic grants..................       4,835       6,181       6,191
    00.02     Concentration grants..........         547         941         999
    00.03     Targeted grants...............                                 350
    00.04     Set-aside for BIA/outlying
                areas.......................           5          85
    00.05   Capital expenses................          44          41          41
    00.06   Even start......................         103         104         108
    00.07   State agency programs...........         346         349         360
    00.08   State school improvement........                                   8
    00.09   Evaluation......................           3           7          10
    00.10   Migrant education projects......           9           9          10
                                               ---------   ---------  ----------
    00.91     Total direct program..........       5,892       7,717       8,077
    01.01 Reimbursable program..............           1          14
                                               ---------   ---------  ----------
    10.00   Total obligations...............       5,893       7,731       8,077
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          17          41
    22.00 New budget authority (gross)......       5,911       7,690       8,077
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       5,935       7,731       8,077
    23.95 New obligations...................      -5,893      -7,731      -8,077
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          41
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       5,930       6,400       6,779
    41.00   Transferred to other accounts...         -34
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........       5,896       6,400       6,779
          Permanent:

    61.00   Transferred to other accounts...                      -8
    65.00   Advance appropriation (definite)                   1,298       1,298
    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).          15
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       5,911       7,690       8,077
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation       7,900       6,721       7,217
    73.10 New obligations...................       5,893       7,731       8,077
    73.20 Total outlays (gross).............      -7,034      -7,235      -7,476
    73.40 Adjustments in expired accounts...         -31
    73.45 Adjustments in unexpired accounts.          -7
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       6,721       7,217       7,818
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         330         768         813
    86.93 Outlays from current balances.....       6,695       5,421       5,390
    86.97 Outlays from new permanent
            authority.......................                   1,032       1,038
    86.98 Outlays from permanent balances...           9          14         235
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       7,034       7,235       7,476
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -15
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       5,896       7,690       8,077
    90.00 Outlays...........................       7,020       7,235       7,476
    ---------------------------------------------------------------------------

        Grants to local educational agencies.--Funds will be allocated
    through the Basic, Concentration, and Targeted grant formulas for local
    programs that stress the achievement of challenging State education
    standards, support schoolwide improvement, integrate Title I assessment
    and curriculum with State systemic reforms, and target funds to high-
    poverty schools. Up to $4.0 million in Basic Grant funds will be used to
    continue work needed to obtain updated poverty data at the local
    educational agency level from the Bureau of the Census, for use in
    allocating Title I funds beginning in 1999, as required by the statute.

        Capital expenses.--Funds are provided by formula to States to
    support capital costs incurred by local educational agencies that are
    associated with providing educational services to eligible children
    attending non-public schools.

        State agency migrant program.--Funds are provided by formula to
    States for educational services to children of migratory farmworkers and
    fishers. Funds and services are concentrated on children who have moved
    within the past 36 months.

        State agency neglected and delinquent program.--Funds are provided
    by formula to States for educational services to children and youth
    under age 21 in State neglected, delinquent, or adult correction
    facilities. Services help institutionalized youth achieve the same
    challenging standards established for students in local public schools.

        State school improvement.--Funds are provided by formula to States
    to be used for technical assistance, incentives, and other strategies to
    assist schools and districts to implement Title I programs that help
    children meet challenging State education standards.

        Evaluation.--Funds support national activities to evaluate Title I
    programs and ongoing longitudinal studies of the program's effectiveness
    in helping schools and children achieve to challenging State education
    standards.

        Migrant education projects.--Funds support grants to institutions of
    higher education and other non-profit agencies that assist migrant
    students to earn a high school equivalency certificate or to complete
    their first year of college.

        Reimbursable program.--Amounts in this activity consist of funds
    appropriated in other accounts for consolidated grants to the insular
    areas.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           6           8          11
    25.2    Other services..................           3           6           6
    41.0    Grants, subsidies, and
              contributions.................       5,883       7,703       8,060
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       5,892       7,717       8,077
    99.0  Reimbursable obligations..........           1          14
                                               ---------   ---------  ----------
    99.9    Total obligations...............       5,893       7,731       8,077
    ---------------------------------------------------------------------------

                                   Impact Aid

        For carrying out programs of financial assistance to federally
    affected schools authorized by title VIII of the Elementary and
    Secondary Education Act of 1965, [$730,000,000], $658,000,000, of which
    [$615,500,000] $584,000,000 shall be for basic support payments under
    section 8003(b), $40,000,000 shall be for payments for children with
    disabilities under section 8003(d), [$52,000,000] $20,000,000, to remain
    available until expended, shall be for payments under

    [[Page 417]]

    section 8003(f), [$5,000,000] $4,000,000 shall be for construction under
    section 8007, and $10,000,000, to remain available until expended, shall
    be for facilities maintenance activities under section 8008 [$17,500,000
    shall be for Federal property payments under section 8002]: Provided,
    That payments and eligibility under section 8003 shall be based only on
    federally connected children described in sections 8003(a)(1)(B) and
    8003(a)(1)(C): Provided further, That notwithstanding the provisions of
    section 8003(b)(1)(B), any local educational agency that received a
    payment based on federally connected children described in sections
    8003(a)(1)(B) and 8003(a)(1)(C) for fiscal year 1997 shall be eligible
    to receive a payment under sections 8003(b) and 8003(d) for fiscal year
    1998: Provided further, That notwithstanding the provisions of section
    8003(b)(1)(C), the maximum amount of the basic support payment shall be
    determined by multiplying each local educational agency's weighted
    student units for federally connected children described in sections
    8003(a)(1)(B) and 8003(a)(1)(C) by the factor described under section
    8003(b)(1)(C)(iv): Provided further, That notwithstanding the provisions
    of section 8003(b)(2), if funds provided are insufficient to pay each
    local educational agency the full amount of its payment calculated under
    section 8003(b)(1)(C), then payments shall be ratably reduced: Provided
    further, That none of the funds provided shall be used for payments
    under section 8003(e). (Department of Education Appropriations Act,
    1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0102-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Payments for federally connected children:

    00.01   Basic support payments..........         582         615         584
    00.02   Supplemental payments for
              children with disabilities....          40          40          40
    00.03   Payments for heavily impacted
              districts.....................          41         101          20
                                               ---------   ---------  ----------
    00.91   Subtotal, payments for federally
              connected children............         663         756         644
    01.01 Facilities maintenance............           6          12          10
    02.01 Construction......................          13          22           4
    03.01 Payments for Federal property.....          16          18
    04.01 Payments for section 3(d)(2)(B)...           3           4
    05.01 Disaster assistance...............           1          27
    06.01 Construction (P.L. 81-815)........           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............         703         839         658
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         105         109
    22.00 New budget authority (gross)......         693         730         658
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          14
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         812         839         658
    23.95 New obligations...................        -703        -839        -658
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         109
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         693         730         658
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         373         320         258
    73.10 New obligations...................         703         839         658
    73.20 Total outlays (gross).............        -952        -901        -701
    73.40 Adjustments in expired accounts...         210
    73.45 Adjustments in unexpired accounts.         -14
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         320         258         215
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         531         599         532
    86.93 Outlays from current balances.....         421         302         169
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         952         901         701
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         693         730         658
    90.00 Outlays...........................         952         901         701
    ---------------------------------------------------------------------------

        Funds help to pay the operating costs of local educational agencies
    that are affected by Federal activities. Payments would be made to local
    educational agencies that educate children living on Indian lands and
    military dependents living on Federal property.

        Basic support payments.--Payments would be made on behalf of
    approximately 330,000 federally connected children enrolled in nearly
    1,000 school districts across the country. The request would provide an
    average payment of $1,770 for each of these federally connected
    children.

        Supplemental payments for children with disabilities.--Payments
    would be made for additional assistance to school districts educating
    federally connected children with disabilities. Approximately 31,000
    such children are enrolled in school districts across the country. The
    request would provide approximately $1,300 in additional assistance for
    the education of each of these children.

        Payments for heavily impacted districts.--Increased payments would
    be provided for certain heavily impacted school districts, including
    school districts whose boundaries are the same as a military base, and
    school districts that enroll high proportions of federally connected
    children and meet certain fiscal requirements.

        Facilities maintenance.--Funds would be used to provide emergency
    repairs for school facilities that are owned by the Department of
    Education and to facilitate the transfer of the facilities to local
    educational agencies.

        Construction.--Formula-based payments for capital improvements would
    be made to school districts that meet the statutory eligibility
    criteria.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0102-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    32.0  Land and structures...............           6          12          10
    41.0  Grants, subsidies, and
            contributions...................         697         827         648
                                               ---------   ---------  ----------
    99.9    Total obligations...............         703         839         658
    ---------------------------------------------------------------------------

                               School Construction

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0010-4-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................                               5,000
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               5,000
    23.95 New obligations...................                              -5,000
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                               5,000
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                               5,000
    73.20 Total outlays (gross).............                              -1,250
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                               3,750
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                               1,250
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               5,000
    90.00 Outlays...........................                               1,250
    ---------------------------------------------------------------------------

        School construction.--Under legislation that the Administration is
    submitting to the Congress in 1997, funds would provide Federal interest
    subsidies, or similar assistance, to States and localities to stimulate
    public elementary and secondary school construction and renovation. The
    legislation would create a one-time mandatory appropriation of $5
    billion.

    [[Page 418]]

                           School Improvement Programs

        For carrying out school improvement activities authorized by titles
    II, IV[-A-1], V-A and B, [VI], IX, X and XIII of the Elementary and
    Secondary Education Act of 1965; the Stewart B. McKinney Homeless
    Assistance Act; and the Civil Rights Act of 1964; [$1,425,631,000]
    $1,299,222,000, of which [$1,202,478,000] $977,000,000 shall become
    available on July 1, [1997] 1998, and remain available through September
    30, [1998] 1999: Provided, That of the amount appropriated,
    [$310,000,000] $360,000,000 shall be for Eisenhower professional
    development State grants under title II-B of the Elementary and
    Secondary Education Act; $100,000,000 shall be for charter schools under
    title X, part C of such Act; and [$310,000,000 shall be for innovative
    education program strategies State grants under title VI-A.] $750,000
    shall be for an evaluation of comprehensive regional assistance centers
    under title XIII of such Act: Provided further, That funds under titles
    II-B and IV-A-1 shall be used only for programs that are consistent with
    principles of effectiveness to be published in the Federal Register by
    the Secretary of Education. (Department of Education Appropriations Act,
    1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Professional development and program
              innovation:

    00.01   Eisenhower professional
              development State grants......         273         311         360
    00.02   Innovative education program
              strategies State grants.......         275         310
          Safe and drug-free schools and communities:

    00.03   State grants....................         438         558         590
    00.04   National programs...............          25                      30
    00.05 Inexpensive book distribution.....          10          10          12
    00.06 Arts in education.................           9           9          10
    00.07 Magnet schools assistance.........          95          95          95
    00.08 Education for homeless children
            and youth.......................          23          25          27
    00.09 Women's educational equity........                       2           4
    00.10 Training and advisory services....           7           7          14
    00.11 Ellender fellowships..............           2           2
    00.12 Education for Native Hawaiians....          12          15          15
    00.13 Alaska Native education equity....                       8           8
    00.14 Foreign language assistance.......          10
    00.15 Charter schools...................          18          51         100
    00.16 Comprehensive regional assistance
            centers.........................          22          26          34
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,219       1,429       1,299
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           5           4
    22.00 New budget authority (gross)......       1,218       1,426       1,299
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,223       1,430       1,299
    23.95 New obligations...................      -1,219      -1,429      -1,299
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           4
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................       1,224       1,426       1,299
    41.00 Transferred to other accounts.....          -6
                                               ---------   ---------  ----------
    43.00   Appropriation (total)...........       1,218       1,426       1,299
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,218       1,426       1,299
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation       1,761       1,693       1,606
    73.10 New obligations...................       1,219       1,429       1,299
    73.20 Total outlays (gross).............      -1,246      -1,516      -1,396
    73.40 Adjustments in expired accounts...         -41
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       1,693       1,606       1,509
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          51         171         156
    86.93 Outlays from current balances.....       1,195       1,345       1,240
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,246       1,516       1,396
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,218       1,426       1,299
    90.00 Outlays...........................       1,246       1,516       1,396
    ---------------------------------------------------------------------------

        Eisenhower professional development State grants.--Formula grants
    are provided to States, local districts, and institutions of higher
    education to support intensive, high-quality professional development in
    the core academic subject areas.

        Safe and drug-free schools and communities.--

        State grants.--Formula grants are made to States and Outlying Areas
    to assist in combatting school violence and drug use by the Nation's
    children and youth.

        National programs.--Funds support activities to promote safe and
    disciplined academic environments and prevent the illegal use of drugs
    and violence among students at all educational levels. Such activities
    may include training, demonstrations, direct services to school
    districts with severe drug and violence problems, program evaluation,
    and development and dissemination of information and materials.

        Other programs.--

        Inexpensive book distribution.--Funds support reading motivation
    activities, including the distribution of free books to children.

        Arts in education.--Funds support Federal leadership activities in
    arts education as well as the education activities of the Kennedy Center
    and Very Special Arts.

        Magnet schools assistance.--Grants are made to local educational
    agencies to establish and operate magnet school programs that are part
    of approved desegregation plans.

        Education for homeless children and youth.--Funds are provided to
    States, Outlying Areas, and the Bureau of Indian Affairs to provide
    educational and support services that enable homeless children and youth
    to enroll in, attend, and achieve success in school.

        Women's educational equity.--Funds support implementation of gender-
    equity practices at schools and colleges, as well as the development and
    dissemination of educational materials that promote educational equity
    for women and girls.

        Training and advisory services.--Grants are made to regional
    desegregation assistance centers and State Educational Agencies that
    provide technical assistance to school districts in desegregating public
    schools and developing effective methods of coping with special
    educational problems associated with desegregation.

        Education for Native Hawaiians.--Grants provide supplemental
    education services to Native Hawaiians in the areas of family-based
    education, special education, gifted and talented education, higher
    education, curriculum development, teacher training and recruitment, and
    community-based learning.

        Alaska Native education equity.--Grants provide supplemental
    education services to Alaska Natives in the areas of educational
    planning, curriculum development, teacher training, teacher recruitment,
    student enrichment, and home-based instruction for pre-school children.

        Charter schools.--The President is proposing a significant increase
    in this program to support innovative education reform and public school
    choice. Grants are awarded to State educational agencies and charter
    schools to support the design and initial implementation of model
    charter schools. These schools are created by teachers, parents, and
    members of the community, and are exempt from certain local, State, and
    Federal regulations.

        Comprehensive regional assistance centers.--Funds are provided for
    15 comprehensive regional technical assistance centers that provide
    services to States, local educational agencies, schools, and other
    recipients of Federal education funds to improve elementary and
    secondary education programs.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    24.0  Printing and reproduction.........           1           1           1

    [[Page 419]]

    25.1  Advisory and assistance services..           2           2           2
    25.2  Other services....................          14          17          20
    25.5  Research and development contracts           1           1           1
    41.0  Grants, subsidies, and
            contributions...................       1,201       1,408       1,275
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,219       1,429       1,299
    ---------------------------------------------------------------------------

                             America Reads Challenge

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0011-4-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 America's Reading Corps...........                                 200
    00.02 Parents as first teachers grants..                                  60
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                 260
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 260
    23.95 New obligations...................                                -260
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 260
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 260
    73.20 Total outlays (gross).............                                 -31
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                 229
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                  31
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 260
    90.00 Outlays...........................                                  31
    ---------------------------------------------------------------------------

        America's Reading Corps.--The President has proposed a new
    initiative to work with families and communities in a national reading
    effort that will enlist a million trained and supervised reading tutors,
    most of whom will participate in after-school, weekend, and summer
    reading programs, to assist in teaching at least three million children
    to read independently and well by the end of the third grade. Department
    of Education funding for the America's Reading Corps will pay primarily
    for reading specialists and materials to train tutors while tutor
    recruitment efforts will be the focus of additional funds requested in
    the budget for the Corporation for National and Community Service.

        Parents as First Teachers grants.--Funds will be made available to
    national and regional groups, as well as local communities and
    organizations, to support effective, proven literacy efforts that help
    parents to help their children become successful readers by the end of
    third grade.

                          Chicago Litigation Settlement

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0220-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................           1           5           4
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          10           9           4
    23.95 New obligations...................          -1          -5          -4
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           9           4
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           2           1           3
    73.10 New obligations...................           1           5           4
    73.20 Total outlays (gross).............          -1          -4          -4
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           1           3           3
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           1           4           4
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           1           4           4
    ---------------------------------------------------------------------------

        Funds made available under this account were reappropriated by the
    Supplemental Appropriations Act, 1987 (Public Law 100-71) from funds
    enjoined in United States of America v. Board of Education of the City
    of Chicago. The funds were reappropriated for the specific purpose of
    settling this case. The funds are used by the Chicago Board of Education
    to implement Project CANAL (Creating A New Approach to Learning), the
    project approved by the court to support the Board's desegregation
    efforts.

        The Department of Education provides these funds to the Chicago
    Board of Education in annual increments upon receipt and approval of an
    annual plan for Project CANAL activities.

                                Indian Education

        For necessary expenses to carry out, to the extent not otherwise
    provided, title IX, part A of the Elementary and Secondary Education Act
    of 1965, as amended, and section 215 of the Department of Education
    Organization Act, [$61,000,000] $62,600,000. (Department of the Interior
    and Related Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to local educational
            agencies........................          50          58          60
    00.02 Fellowships.......................           1
    00.03 Federal Administration............           2           3           3
                                               ---------   ---------  ----------
    10.00   Total obligations...............          53          61          63
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           1
    22.00 New budget authority (gross)......          52          61          63
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          53          61          63
    23.95 New obligations...................         -53         -61         -63
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          52          61          63
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          93          66          60
    73.10 New obligations...................          53          61          63
    73.20 Total outlays (gross).............         -77         -67         -61
    73.40 Adjustments in expired accounts...          -3
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          66          60          62
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           2           9          10
    86.93 Outlays from current balances.....          75          58          51
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          77          67          61
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          52          61          63
    90.00 Outlays...........................          77          67          61
    ---------------------------------------------------------------------------

        The Indian Education program (Title IX, Part A of the Elementary and
    Secondary Education Act) supports the efforts of local educational
    agencies and tribal schools to im-

    [[Page 420]]

    prove teaching and learning for the Nation's American Indian and Alaska
    Native children.

        Grants to local educational agencies.--Formula grants support local
    educational agencies in their efforts to reform elementary and secondary
    school programs that serve Indian students, with the goal of ensuring
    that such programs are based on challenging State standards that are
    used for all students. In 1996, 1,219 formula grants were made to local
    educational agencies and certain tribal schools enrolling approximately
    422,500 Indian students.

        Federal administration.--Funds support the administrative expenses
    of the Office of Indian Education and the National Advisory Council on
    Indian Education.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................           2           2           2
    41.0  Grants, subsidies, and
            contributions...................          51          58          60
    99.5  Below reporting threshold.........                       1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          53          61          63
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          30          24          24
    ---------------------------------------------------------------------------

          OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS

                                  Federal Funds

    General and special funds:

                        Bilingual and Immigrant Education

        For carrying out, to the extent not otherwise provided, bilingual,
    foreign language and immigrant education activities authorized by parts
    A and C and section 7203 of title VII of the Elementary and Secondary
    Education Act, without regard to section 7103(b), [$261,700,000]
    $354,000,000, of which [$100,000,000] $150,000,000 shall be for
    immigrant education programs authorized by part C: Provided, That State
    educational agencies may use all, or any part of, their part C
    allocation for competitive grants to local educational agencies:
    Provided further, That the Department of Education should only support
    instructional programs which ensure that students completely master
    English in a timely fashion (a period of three to five years) while
    meeting rigorous achievement standards in the academic content areas.
    (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Instructional services............         117         157         160
    00.02 Support services..................          10                      14
    00.03 Training grants...................           1                      25
    00.04 Foreign Language Assistance.......                       5           5
    00.05 Immigrant education...............          50         100         150
                                               ---------   ---------  ----------
    10.00   Total obligations...............         178         262         354
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         178         262         354
    23.95 New obligations...................        -178        -262        -354
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         178         262         354
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         266         241         278
    73.10 New obligations...................         178         262         354
    73.20 Total outlays (gross).............        -185        -225        -276
    73.40 Adjustments in expired accounts...         -18
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         241         278         356
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           4          31          42
    86.93 Outlays from current balances.....         181         194         234
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         185         225         276
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         178         262         354
    90.00 Outlays...........................         185         225         276
    ---------------------------------------------------------------------------

        Bilingual education.--These programs provide assistance to local
    educational agencies and other entities to develop and enhance their
    capacity to provide high-quality instructional programs to children and
    youth of limited English proficiency. Programs are designed to teach
    English and to assist these students in achieving the same challenging
    State content and performance standards expected of all children and
    youth. Aid is also given to train educational personnel to serve limited
    English proficient children, to build State capacity to improve
    educational services for these children, and for information
    dissemination, studies, and evaluations.

        Foreign language assistance.--The foreign language assistance
    program provides competitive grants to State and local educational
    agencies to improve the quality of foreign language instruction for
    elementary and secondary school students.

        Immigrant education.--The immigrant education program provides
    grants to school districts to help finance educational services for
    immigrant students. Participation is limited to districts with 500
    immigrant students or districts in which immigrant children represent at
    least 3 percent of the enrollment. Awards are made to State educational
    agencies, which make subgrants to eligible local educational agencies.
    Appropriation language permits States to distribute these funds on
    either a formula or discretionary grant basis.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           2                       6
    41.0  Grants, subsidies, and
            contributions...................         176         262         348
                                               ---------   ---------  ----------
    99.9    Total obligations...............         178         262         354
    ---------------------------------------------------------------------------

             OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

                                  Federal Funds

    General and special funds:

                                Special Education

        [For carrying out parts B, C, D, E, F, G, and H and section
    610(j)(2)(C) of the Individuals with Disabilities Education Act,
    $4,036,000,000, of which $3,783,685,000 shall become available for
    obligation on July 1, 1997, and shall remain available through September
    30, 1998: Provided, That the Republic of the Marshall Islands, the
    Federated States of Micronesia, and the Republic of Palau shall continue
    to be eligible to receive funds under the Individuals with Disabilities
    Education Act consistent with the provisions of Public Law 104-134:
    Provided further, That the entities that received competitive awards for
    direct services to children under section 611 of the Individuals with
    Disabilities Education Act in accordance with the competition required
    in Public Law 104-134 shall continue to be funded, without competition,
    in the same amounts as under Public Law 104-134.] (Department of
    Education Appropriations Act, 1997.)

    [[Page 421]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          State grants:

    00.01   Grants to States................       2,349       3,119
    00.02   Preschool grants................         366         361
    00.03   Grants for infants and families.         429         505
                                               ---------   ---------  ----------
    00.91     Subtotal, State grants........       3,145       3,985
          Special purpose funds:

    01.01   Deaf-blindness..................          13          13
    01.02   Serious emotional disturbance...           4           4
    01.03   Severe disabilities.............          10          10
    01.04   Early childhood education.......          25          25
    01.05   Secondary and transitional
              services......................          24          24
    01.06   Postsecondary education.........           9           9
    01.07   Innovation and development......          14          16
    01.08   Media and captioning services...          19          20
    01.09   Technology applications.........          10          10
    01.10   Special studies.................           4           4
    01.11   Personnel development...........          91          93
    01.12   Parent training.................          14          16
    01.13   Clearinghouses..................           2           2
    01.14   Regional resource centers.......           7           7
    01.15   Architectural barriers removal..           1
                                               ---------   ---------  ----------
    01.91     Subtotal, Special purpose
                funds.......................         246         252
                                               ---------   ---------  ----------
    10.00   Total obligations...............       3,390       4,238
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         339         202
    22.00 New budget authority (gross)......       3,245       4,036
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           8
    22.30 Unobligated balance expiring......          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       3,592       4,238
    23.95 New obligations...................      -3,390      -4,238
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         202
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................       3,245       4,036
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation       3,952       4,055       4,867
    73.10 New obligations...................       3,390       4,238
    73.20 Total outlays (gross).............      -3,222      -3,426      -3,332
    73.40 Adjustments in expired accounts...         -57
    73.45 Adjustments in unexpired accounts.          -8
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       4,055       4,867       1,535
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         122         404
    86.93 Outlays from current balances.....       3,100       3,022       3,332
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       3,222       3,426       3,332
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,245       4,036
    90.00 Outlays...........................       3,222       3,426       3,332
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................       3,245       4,036
      Outlays...........................       3,222       3,426       3,332
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                               4,210
      Outlays...........................                                 421
                                        ------------------------------------
    Total:
      Budget Authority..................       3,245       4,036       4,210
      Outlays...........................       3,222       3,426       3,753
                                        ====================================

        The administration will propose legislation authorizing programs
    under the Individuals with Disabilities Education Act. When new
    authorizing legislation is enacted, resources will be requested for the
    Special Education account. See the ``Legislative proposal, not subject
    to PAYGO'' schedule for additional details.

        Program measures under the current program include:

                                             1995 actual 1996 actual   1997 est.
    Number of children served on December 1
        of fiscal year:
      Ages 3 through 21.....................   5,439,626   5,628,577   5,798,000
      Ages 3 through 5......................     524,458     549,154     577,000
      Birth through 2.......................     165,253     174,288     184,000

                                        1991-1992 ac1992-1993 actual  1993-1994
                                                                          actual
        Educational Environment
    Children ages 3 through 21 provided
        special education in:
      Regular classrooms with or without
        resource rooms......................   3,397,326   3,563,883   3,746,481
      Separate classes......................   1,160,943   1,219,867   1,232,312
      Separate schools......................     219,055     204,764     192,112
      Residential facilities................      40,893      40,466      37,299
        Status of Exiting Students
    Graduated with a diploma................     100,742     103,801     113,945
    Graduated through certification.........      30,839      34,732      23,948
    Reached maximum age.....................       4,337       5,096       4,594
    Dropped out of school...................      51,489          NA      76,608
    Status unknown..........................      41,961          NA      42,460
        NA--Not available due to changes in data collection form.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           8           8
    25.5  Research and development contracts           1           1
    41.0  Grants, subsidies, and
            contributions...................       3,381       4,229
                                               ---------   ---------  ----------
    99.9    Total obligations...............       3,390       4,238
    ---------------------------------------------------------------------------

                                Special Education

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-2-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          State grants:

    00.01   Grants to States................                               3,249
    00.02   Preschool grants................                                 375
    00.03   Grants for infants and families.                                 324
                                               ---------   ---------  ----------
    00.91     Subtotal, State grants........                               3,948
          Program support and improvement:

    01.01   Research to practice............                                 100
    01.02   State improvement...............                                  35
    01.03   Professional development........                                  82
    01.04   Parent training and information.                                  16
    01.05   Technology development and
              educational media services....                                  30
                                               ---------   ---------  ----------
    01.91     Subtotal, Program support and
                improvement.................                                 262
                                               ---------   ---------  ----------
    10.00   Total obligations...............                               4,210
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               4,210
    23.95 New obligations...................                              -4,210
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                               4,210
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                               4,210
    73.20 Total outlays (gross).............                                -421
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                               3,789
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 421
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               4,210
    90.00 Outlays...........................                                 421
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under proposed legislation to authorize programs under the Individuals
    with Disabilities Education Act.

    [[Page 422]]

        State grants.--
            Grants to States.--Formula grants are provided to States to
        assist them in providing special education and related services to
        children with disabilities ages 3 through 21. The 1998 estimate of
        these children is 5,906,000.
            Preschool Grants.--Formula grants provide additional funds to
        States to further assist them in providing special education and
        related services to children with disabilities ages 3 through 5
        served under the Grants to States program. The 1998 estimate of
        these children is 600,000.
            Grants for infants and families.--Formula grants are provided to
        assist States to continue to implement statewide systems of
        coordinated, comprehensive, multi-disciplinary interagency programs
        to provide early intervention services to children with
        disabilities, birth through age 2 years and their families.
            Program support and improvement.--These funds support a variety
        of research, demonstration, training, technical assistance, systems
        change, and other activities.

        The Department is in the process of developing performance
    indicators that will provide information on the impact of special
    education and early intervention on improving results for children with
    disabilities.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-2-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................                                   8
    25.5  Research and development contracts                                   1
    41.0  Grants, subsidies, and
            contributions...................                               4,201
                                               ---------   ---------  ----------
    99.9    Total obligations...............                               4,210
    ---------------------------------------------------------------------------

                 Rehabilitation Services and Disability Research

        For carrying out, to the extent not otherwise provided, [the
    Rehabilitation Act of 1973,] the Technology-Related Assistance for
    Individuals with Disabilities Act, [and the Helen Keller National Center
    Act, as amended, $2,509,447,000] $36,109,000. (Department of Education
    Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-0-1-506      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.01   Vocational rehabilitation State
              grants........................       2,114       2,176
    00.02   Client assistance State grants..          10          10
    00.03   Training........................          40          40
    00.04   Special demonstration programs..          26          20
    00.05   Migratory workers...............           1           2
    00.06   Recreational programs...........           3           3
    00.07   Protection and advocacy.........           7           8
    00.08   Projects with industry..........          22          22
    00.09   Supported employment State
              grants........................          38          38
    00.10   Independent living..............          73          75
    00.11   Program improvement.............           1           2
    00.12   Evaluation......................           2           2
    00.13   Helen Keller National Center....           7           7
    00.14   National Institute on Disability
              and Rehabilitation Research...          70          70
    00.15   Assistive technology............          36          36          36
    00.16   1996 Paralympics Games..........           7
                                               ---------   ---------  ----------
    00.91     Total direct program..........       2,457       2,511          36
    01.01 Reimbursable program..............           2
                                               ---------   ---------  ----------
    10.00   Total obligations...............       2,459       2,511          36
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           2           1
    22.00 New budget authority (gross)......       2,458       2,509          36
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,460       2,510          36
    23.95 New obligations...................      -2,459      -2,511         -36
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       2,456       2,509          36
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       2,458       2,509          36
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         922         951         760
    73.10 New obligations...................       2,459       2,511          36
    73.20 Total outlays (gross).............      -2,413      -2,702        -665
    73.40 Adjustments in expired accounts...         -18
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         951         760         131
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       1,617       1,932          28
    86.93 Outlays from current balances.....         794         770         637
    86.97 Outlays from new permanent
            authority.......................           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,413       2,702         665
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       2,456       2,509          36
    90.00 Outlays...........................       2,410       2,702         665
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................       2,456       2,509          36
      Outlays...........................       2,411       2,702         665
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                               2,547
      Outlays...........................                               1,961
                                        ------------------------------------
    Total:
      Budget Authority..................       2,456       2,509       2,583
      Outlays...........................       2,411       2,702       2,626
                                        ====================================

        The administration will propose legislation authorizing programs
    under the Rehabilitation Act and the Helen Keller National Center Act.
    When new legislation is enacted, resources for the affected programs
    will be requested. See the ``Legislative proposal, not subject to
    PAYGO'' schedule for additional details.

        Programs and activities under the current laws are described below.

        Vocational rehabilitation State grants.--The basic State grant
    program provides Federal matching funds to State vocational
    rehabilitation (VR) agencies to assist individuals with physical or
    mental impairments to become gainfully employed. Services provided
    include vocational evaluation, counseling, mental and physical
    restoration, education, vocational training, work adjustment, job
    placement, and post-employment services. Priority is given to serving
    those with the most severe disabilities.

        As a result of the 1992 amendments to the Rehabilitation Act, the
    eligibility rate (applicants determined eligible for the VR program as a
    percent of all eligibility determinations) rose from 56.5 percent in
    1992 to 76.5 percent in 1996. Half of the State VR agencies (41 of 82)
    could not serve all individuals determined to be eligible for the
    program. Of those individuals whose cases were closed in 1996 after
    receiving VR services, about 60 percent achieved an employment outcome
    and an estimated 86 percent of these individuals entered the competitive
    labor market or became self-employed.

    [[Page 423]]

        The table below presents national estimates of the number of
    eligible individuals in the VR system (individuals being served and
    eligible individuals awaiting service) and estimates of the number of
    individuals who achieved an employment outcome under the program.

        ESTIMATES OF ELIGIBLE INDIVIDUALS AND INDIVIDUALS REHABILITATED

                                                  1995           1996
                                                 actual       preliminary
    Eligible individuals in the VR system...     1,250,314       1,254,100
     Severe disabilities, percent...........          75.2            75.5
    Individuals achieving employment
     outcomes...............................       209,509         209,500
     Severe disabilities, percent...........          76.0            77.3

        Client assistance State grants.--Formula grants are made to States
    to provide assistance in informing and advising clients and applicants
    of benefits available under the Rehabilitation Act and, if requested, to
    pursue legal or administrative remedies to ensure the protection of the
    rights of individuals with disabilities.

        Training.--Grants are made to States and public or nonprofit
    agencies and organizations, including institutions of higher education,
    to increase the number of skilled personnel available for employment in
    the field of rehabilitation.

        Special demonstration programs.--Grants are made to develop
    innovative methods and comprehensive service programs to assist
    individuals with disabilities to achieve satisfactory vocational
    outcomes. Supported employment projects, which provide grants to expand
    or improve the provision of supported employment services to individuals
    with the most severe disabilities, are included under this activity.

        Migratory workers.--Grants are made to State VR agencies and other
    nonprofit or local agencies to provide comprehensive vocational
    rehabilitation services to migrant or seasonal farm workers with
    disabilities.

        Recreational programs.--Grants are made to provide individuals with
    disabilities with recreation and related activities to aid in their
    employment, mobility, independence, socialization, and community
    integration.

        Protection and advocacy of individual rights.--Formula grants are
    made to State protection and advocacy systems to protect the legal and
    human rights of individuals with disabilities.

        Projects with industry.--Grants are made to a variety of public and
    private organizations, including State VR agencies, community
    rehabilitation programs, and labor organizations to provide training in
    work settings to prepare individuals with disabilities for employment
    and career advancement in the competitive labor market.

        Supported employment State grants.--Formula grants are made to
    assist States in developing programs with public and nonprofit
    organizations to provide supported employment services for individuals
    with the most severe disabilities who require on-going support services
    to enter or retain competitive employment.

        Independent living.--Grants are awarded to States and nonprofit
    agencies for services designed to enable individuals with significant
    disabilities to live and function more independently.

        Program Improvement.--Funds are used to promote broad-based planning
    and coordination, improve accountability, and enhance the Department's
    ability to address critical areas of national significance in achieving
    the purposes of the Rehabilitation Act. Examples of program improvement
    activities include technical assistance activities of national scope,
    and the development of an effective data management and reporting
    system, including program performance measures.

        Evaluation.--Studies are conducted to evaluate the impact and
    effectiveness of various programs authorized under the Rehabilitation
    Act. The Department is conducting a multi-year national longitudinal
    study of the Vocational rehabilitation State grants program.

        Helen Keller National Center for Deaf-Blind Youths and Adults.--The
    Center provides services to deaf-blind youths and adults and provides
    training and technical assistance to professional and allied personnel
    at its national headquarters center and through its regional
    representatives and affiliate agencies.

        National Institute on Disability and Rehabilitation Research.--The
    Institute carries out a comprehensive and coordinated program of
    rehabilitation research and related activities. Through grants and
    contracts, it supports research and training centers, rehabilitation
    engineering centers, research and demonstration projects, information
    dissemination and utilization projects, and training activities.

        Assistive technology.--Grants are made to States to support systems
    change and advocacy activities designed to develop and implement
    consumer-responsive comprehensive statewide programs of technology-
    related assistance for individuals with disabilities.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-0-1-506      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           5           7           1
    25.2  Other services....................           2           2
    25.3  Purchases of goods and services
            from Government accounts........           1           1
    25.5  Research and development contracts           1           1
    41.0  Grants, subsidies, and
            contributions...................       2,448       2,500          35
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       2,457       2,511          36
                                               ---------   ---------  ----------
    99.9    Total obligations...............       2,459       2,511          36
    ---------------------------------------------------------------------------

                 Rehabilitation Services and Disability Research

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-2-1-506      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.01   Vocational rehabilitation State
              grants........................                               2,247
    00.02   Client assistance State grants..                                  11
    00.03   Training........................                                  40
    00.04   Special demonstration programs..                                  17
    00.05   Migratory workers...............                                   2
    00.06   Recreational programs...........                                   3
    00.07   Protection and advocacy.........                                   8
    00.08   Projects with industry..........                                  22
    00.09   Supported employment State
              grants........................                                  38
    00.10   Independent living..............                                  76
    00.11   Program improvement.............                                   4
    00.12   Evaluation......................                                   1
    00.13   Helen Keller National Center....                                   7
    00.14   National Institute on Disability
              and Rehabilitation Research...                                  71
                                               ---------   ---------  ----------
    10.00   Total obligations...............                               2,547
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               2,547
    23.95 New obligations...................                              -2,547
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                               2,547
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                               2,547
    73.20 Total outlays (gross).............                              -1,961
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                 587
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                               1,961
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               2,547
    90.00 Outlays...........................                               1,961
    ---------------------------------------------------------------------------

    [[Page 424]]

        The administration is currently preparing a legislative proposal to
    reauthorize the expiring Rehabilitation Act and the Helen Keller
    National Center Act. The resources in this schedule are distributed
    under current law for illustrative purposes. The distribution of
    resources is subject to change pending the enactment of new authorizing
    legislation.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-2-1-506      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..                                   6
    25.2  Other services....................                                   2
    25.3  Purchases of goods and services
            from Government accounts........                                   1
    25.5  Research and development contracts                                   1
    41.0  Grants, subsidies, and
            contributions...................                               2,537
                                               ---------   ---------  ----------
    99.9    Total obligations...............                               2,547
    ---------------------------------------------------------------------------

               Special Institutions for Persons With Disabilities

                      american printing house for the blind

        For carrying out the Act of March 3, 1879, as amended (20 U.S.C. 101
    et seq.), $6,680,000. (Department of Education Appropriations Act,
    1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0600-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................           7           7           7
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           7           7           7
    23.95 New obligations...................          -7          -7          -7
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................           7           7           7
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           1           2
    73.10 New obligations...................           7           7           7
    73.20 Total outlays (gross).............          -5          -9          -7
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           4           7           7
    86.93 Outlays from current balances.....           1           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           5           9           7
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           7           7           7
    90.00 Outlays...........................           5           9           7
    ---------------------------------------------------------------------------

        The Federal appropriation supports the production of free
    educational materials for students below the college level who are
    blind, research related to developing and improving products, and
    advisory services to consumer organizations on the availability and use
    of materials. In 1996, the portion of the Federal appropriation
    allocated to educational materials represented approximately 40 percent
    of the Printing House's total sales. The full appropriation represented
    approximately 34 percent of the Printing House's total budget.

                    national technical institute for the deaf

        For the National Technical Institute for the Deaf under titles I and
    II of the Education of the Deaf Act of 1986 (20 U.S.C. 4301 et seq.),
    $43,041,000: Provided, That from the amount available, the Institute may
    at its discretion use funds for the endowment program as authorized
    under section 207. (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0601-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................          42          43          43
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          42          43          43
    23.95 New obligations...................         -42         -43         -43
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          42          43          43
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation                                   3
    73.10 New obligations...................          42          43          43
    73.20 Total outlays (gross).............         -42         -40         -43
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                       3           2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          42          40          40
    86.93 Outlays from current balances.....                                   3
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          42          40          43
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          42          43          43
    90.00 Outlays...........................          42          40          43
    ---------------------------------------------------------------------------

        This residential center provides postsecondary technical and
    professional education for people who are deaf to prepare them for
    employment, provides training, and conducts applied research into
    employment related aspects of deafness. In 1996, Federal appropriations
    represented 81.8 percent of the Institute's operating budget. The
    Institute may also use appropriated funds for the Endowment Grant
    program.

                              gallaudet university

        For the Kendall Demonstration Elementary School, the Model Secondary
    School for the Deaf, and the partial support of Gallaudet University
    under titles I and II of the Education of the Deaf Act of 1986 (20
    U.S.C. 4301 et seq.), $79,182,000: Provided, That from the amount
    available, the University may at its discretion use funds for the
    endowment program as authorized under section 207. (Department of
    Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0602-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.01 University programs...............          53
    02.01 Pre-college programs..............          24
    03.01 Endowment grant...................           1
    04.01 Consolidated Account..............                      79          79
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................          78          79          79
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          78          79          79
    23.95 New obligations...................         -78         -79         -79
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          78          79          79
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           3           2           5
    73.10 New obligations...................          78          79          79
    73.20 Total outlays (gross).............         -79         -76         -79
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           2           5           5
    ----------------------------------------------------------------------------

    [[Page 425]]

        Outlays (gross), detail:
    86.90 Outlays from new current authority          77          74          74
    86.93 Outlays from current balances.....           2           2           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          79          76          79
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          78          79          79
    90.00 Outlays...........................          79          76          79
    ---------------------------------------------------------------------------

        This institution provides undergraduate and continuing education
    programs for persons who are deaf, and graduate programs related to
    deafness for students who are deaf and students who are hearing. The
    University also conducts basic and applied research and provides public
    service programs for persons who are deaf and persons who work with
    them.

        Gallaudet operates two elementary and secondary education programs
    on the main campus of the University. The Kendall Demonstration
    Elementary School serves students who are deaf from infancy through age
    15, and the Model Secondary School for the Deaf serves students who are
    deaf of high school age. Both schools also develop and disseminate
    information on effective educational techniques and strategies for
    teachers and professionals working with students who are deaf or hard of
    hearing.

        In 1996, the Federal appropriation represented 63.6 percent of the
    University's operating budget, excluding Federal financial aid,
    vocational rehabilitation, and competitive grants, and 96.9 percent of
    the operating budgets of the related elementary and secondary schools.
    The University may also use appropriated funds for the Endowment Grant
    program.

                    OFFICE OF VOCATIONAL AND ADULT EDUCATION

                                  Federal Funds

    General and special funds:

                         Vocational and Adult Education

        For carrying out, to the extent not otherwise provided, the Carl D.
    Perkins Vocational and Applied Technology Education Act[,] and the Adult
    Education Act[, and the National Literacy Act of 1991], [$1,486,531,000,
    of which $4,500,000 shall be for the National Institute for Literacy;
    and] $1,565,966,000, of which [$1,483,612,000] $1,563,047,000 shall
    become available on July 1, [1997] 1998 and shall remain available
    through September 30, [1998] 1999; and of which $6,000,000 from amounts
    available under the Adult Education Act shall be for the National
    Institute for Literacy under section 384(c): Provided, That, of the
    amounts made available for title II of the Carl D. Perkins Vocational
    and Applied Technology Education Act, [$4,500,000] $20,497,000 shall be
    used by the Secretary for national programs under title IV, without
    regard to section 451: [Provided further, That, in addition, the
    Secretary may reserve up to $9,000,000 under section 101(a)(1)(A) of the
    Carl D. Perkins Vocational and Applied Technology Education Act, without
    regard to section 451:] Provided further, That the Secretary may reserve
    up to [$5,000,000] $6,000,000 under section 313(d) of the Adult
    Education Act for activities carried out under section 383 of that Act:
    Provided further, That no funds shall be awarded to a State Council
    under section 112(f) of the Carl D. Perkins Vocational and Applied
    Technology Education Act, and no State shall be required to operate such
    a Council. (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Vocational education:

            Annual appropriations:
              Basic grants:
    00.01       Basic State grants..........         956         998       1,026
    00.02       Indian and Hawaiian natives
                  set-aside.................          15          30          16
    00.03       Territorial set-aside.......           2           2           2
                                               ---------   ---------  ----------
    00.91         Subtotal, basic grants....         973       1,030       1,044
    01.01     Tech-prep education...........         100         100         105
    01.02     Tribally controlled
                postsecondary vocational
                institutions................           3           3           3
              National programs:
    01.03       Research....................           7          18          20
    01.04       National Occupational
                  Information Coordinating
                  Committee.................           4
                                               ---------   ---------  ----------
    02.00       Total, annual appropriation.       1,087       1,151       1,172
    03.01     Permanent appropriation.......           7           7           7
                                               ---------   ---------  ----------
    04.00       Total, vocational education.       1,094       1,158       1,179
            Adult education:
    05.01     State programs................         246         344         382
    05.02     Evaluation and technical
                assistance..................           3           8           6
    05.03     National Institute for
                Literacy....................           5           9           6
    05.04     Workplace literacy
                partnerships................          13
    05.05     Literacy programs for
                prisoners...................           5           9
                                               ---------   ---------  ----------
    05.91     Total, adult education........         272         370         394
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,366       1,528       1,573
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          53          34
    22.00 New budget authority (gross)......       1,347       1,494       1,573
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,400       1,528       1,573
    23.95 New obligations...................      -1,366      -1,528      -1,573
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          34
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       1,340       1,487       1,566
          Permanent:

    60.00   Appropriation...................           7           7           7
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,347       1,494       1,573
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation       1,639       1,654       1,584
    73.10 New obligations...................       1,366       1,528       1,573
    73.20 Total outlays (gross).............      -1,348      -1,598      -1,494
    73.40 Adjustments in expired accounts...          -3
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       1,654       1,584       1,663
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          67         179         189
    86.93 Outlays from current balances.....       1,274       1,410       1,298
    86.97 Outlays from new permanent
            authority.......................                       1           1
    86.98 Outlays from permanent balances...           7           8           6
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,348       1,598       1,494
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,347       1,494       1,573
    90.00 Outlays...........................       1,348       1,598       1,494
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................       1,347       1,494       1,573
      Outlays...........................       1,348       1,598       1,494
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                  -7
      Outlays...........................                                  -1
                                        ------------------------------------
    Total:
      Budget Authority..................       1,347       1,494       1,566
      Outlays...........................       1,348       1,598       1,493
                                        ====================================

        Budget authority for vocational and adult education includes the
    following amounts:

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    1. Vocational education:
        a. Basic grants.................         973       1,016       1,044
        b. Tech-prep education..........         100         100         105
        c. Tribally controlled
          postsecondary vocational
          institutions..................           3           3           3

    [[Page 426]]

        d. National programs............           5          13          20
        e. Permanent appropriation......           7           7           0
    2. Adult education:
        a. State programs...............         247         340         382
        b. Evaluation and technical
          assistance....................           3           5           6
        c. National Institute for
          Literacy......................           5           4           6
        d. Literacy programs for
          prisoners.....................           5           5
                                        ------------------------------------
              Total.....................       1,348       1,494       1,566
                                        ====================================

        Vocational and adult education.--In fiscal year 1996, the
    Administration proposed to restructure Federal workforce-related
    education and training programs, including those under the Carl D.
    Perkins Vocational and Applied Technology Education Act, the Adult
    Education Act, and the National Literacy Act. During the 104th Congress,
    both the House and Senate passed bills that streamlined the Federal
    investment in Vocational and Adult Education. However, the 104th
    Congress adjourned without reconciling differences between the House and
    Senate bills. Absent new authorizing legislation, Congress extended the
    authority of the Perkins Act, the Adult Education Act, and the National
    Literacy Act through the 1997 appropriations act. The fiscal year 1998
    budget estimate reflects funding under current law; however, the
    Administration will propose new legislation for Vocational and Adult
    Education early in the 105th Congress. Consistent with the earlier
    proposals, State formula grant programs for vocational education and for
    adult education would be streamlined and consolidated. In addition,
    national activities for both vocational and adult education would
    support State efforts through research, development, technical
    assistance, and evaluation.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................           1           1           1
    25.1  Advisory and assistance services..           2           2           2
    25.2  Other services....................           2           2           2
    25.5  Research and development contracts           1           2           2
    41.0  Grants, subsidies, and
            contributions...................       1,359       1,520       1,565
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       1,365       1,527       1,572
    99.5  Below reporting threshold.........           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,366       1,528       1,573
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          13          10          10
    ---------------------------------------------------------------------------

                         Vocational and Adult Education

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-4-1-501      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    03.01 Permanent appropriation...........                                  -7
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                  -7
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  -7
    23.95 New obligations...................                                   7
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.00 Appropriation.....................                                  -7
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation
    73.10 New obligations...................                                  -7
    73.20 Total outlays (gross).............                                   1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                  -6
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                  -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                  -7
    90.00 Outlays...........................                                  -1
    ---------------------------------------------------------------------------

        The Smith-Hughes Act authorizes a permanent appropriation for four
    vocational education activities: Basic Grants, the Indian and Hawaiian
    Natives set-aside, the Territorial set-aside, and National Programs. The
    permanent appropriation is proposed for repeal, and an equivalent level
    of funding will be included in the Administration's proposal to
    reauthorize and restructure the Carl D. Perkins Vocational and Applied
    Technology Education Act.

                        OFFICE OF POSTSECONDARY EDUCATION

                                  Federal Funds

    General and special funds:

                          Student Financial Assistance

        For carrying out subparts 1[, 3, and 4] and 3, of part A, part C and
    part E of title IV of the Higher Education Act of 1965, as amended,
    [$7,560,407,000] $9,263,407,000, which shall remain available through
    September 30, [1998] 1999.
        The maximum Pell Grant for which a student shall be eligible during
    award year [1997-1998] 1998-1999 shall be [$2,700] $3,000: Provided,
    That notwithstanding section 401(g) of the Act, if the Secretary
    determines, prior to publication of the payment schedule for such award
    year, that the amount included within this appropriation for Pell Grant
    awards in such award year, and any funds available from the fiscal year
    [1996] 1997 appropriation for Pell Grant awards, are insufficient to
    satisfy fully all such awards for which students are eligible, as
    calculated under section 401(b) of the Act, the amount paid for each
    such award shall be reduced by either a fixed or variable percentage, or
    by a fixed dollar amount, as determined in accordance with a schedule of
    reductions established by the Secretary for this purpose: Provided
    further, That notwithstanding section 476(b)(1)(A)(iv) of the Act, the
    income protection allowance for independent students without dependents
    other than a spouse shall be determined using the table appearing in
    section 477(b)(4) (or a successor table prescribed by the Secretary
    under section 478(b)), except that the income protection allowance for
    single students shall be equal to the amount specified in that table for
    a family size of two with one family member in college, minus the amount
    in the table for each additional family member. (Department of Education
    Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Pell grants:

    01.01   Current academic year program...       2,522       3,670       4,284
    01.02   Prior academic year program.....       2,404       3,611       2,249
    01.03   Independent Student Formula
              Modification..................                                 450
                                               ---------   ---------  ----------
    01.91     Subtotal, Pell grants.........       4,926       7,281       6,983
          Campus-based aid:

    02.01   Supplemental educational
              opportunity grants (SEOG).....         587         587         583
    02.02   Work-study......................         619         832         857
    02.03   Perkins loans: Federal capital
              contributions.................          95         159         158
    02.04   Perkins loans: Teacher
              cancellations.................          23          20          30
                                               ---------   ---------  ----------
    02.91     Subtotal, Campus-based
                activities..................       1,324       1,597       1,628
          Campus-based aid:

    03.01   State Student Incentive Grants..          32          50
                                               ---------   ---------  ----------

    [[Page 427]]

    10.00   Total obligations (object class
              41.0).........................       6,282       8,928       8,611
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................       3,561       3,617       2,249
    22.00 New budget authority (gross)......       6,258       7,560       9,263
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          87
    22.30 Unobligated balance expiring......          -8
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       9,898      11,177      11,512
    23.95 New obligations...................      -6,282      -8,928      -8,611
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....       3,617       2,249       2,901
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................       6,258       7,560       9,263
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation       3,363       2,665       3,994
    73.10 New obligations...................       6,282       8,928       8,611
    73.20 Total outlays (gross).............      -6,862      -7,599      -8,165
    73.40 Adjustments in expired accounts...         -31
    73.45 Adjustments in unexpired accounts.         -87
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       2,665       3,994       4,440
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         886       1,458       2,084
    86.93 Outlays from current balances.....       5,973       6,141       6,081
    86.98 Outlays from permanent balances...           3
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       6,862       7,599       8,165
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       6,258       7,560       9,263
    90.00 Outlays...........................       6,862       7,599       8,165
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         187         207         223
    1251  Repayments: Repayments and
            prepayments.....................         -31         -31         -31
          Write-offs for default:

    1263    Direct loans....................          -5          -8          -8
    1264    Other adjustments, net..........          56          56          56
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         207         223         240
    ---------------------------------------------------------------------------
        \1\ Includes in all years institutional matching share of defaulted
    notes assigned from institutions to the Education Department.

        Federal Pell Grants.--Undergraduate students establish eligibility
    for these grants under award and need determination rules set out in the
    authorizing statute and the annual appropriation act. The maximum award
    for FY 1998 would be $3,000. The Department plans to transmit a
    legislative proposal later to modify the student aid need analysis
    provisions of the Higher Education Act of 1965 in order to increase the
    income protection allowance for single independent students and
    independent students without dependents other than a spouse. With this
    change, the law will provide income protection for these students at the
    same level as for independent students with dependents and parents of
    dependent students. This change will increase the eligibility of such
    students for Pell Grants and other need-based student aid.

        Federal Work-Study.--Federal grants are awarded by formula to
    qualifying institutions, which develop and provide part-time jobs for
    eligible undergraduate and graduate students with demonstrated need.
    Federal grants in most cases pay 75 percent of a student's hourly
    earnings, with the remainder paid by the employer. Hourly earnings must
    not be less than the Federal minimum wage.

        The President proposes to continue the policy of annual increases in
    Work-Study funding so that by FY 2000 one million students a year will
    be able to work their way through college under the program. FY 1998 is
    the second year of this policy.

        Institutions are currently required to spend at least 5 percent of
    their Work-Study allocation to pay students working in community service
    jobs. The President has encouraged participating institutions to use at
    least one-half of their Work-Study funding increases (over the FY 1996
    Work-Study allocation level) for community service activities.

        As part of the America Reads Challenge, the President has also
    called upon Work-Study recipients to earn their awards by working as
    reading tutors for kindergarten and elementary school students. The
    Department recently amended its regulations to waive the required 25
    percent employer funding match for students working as reading tutors.

        Federal Supplemental Educational Opportunity Grants.--Federal funds
    are awarded by formula to qualifying institutions, which use these funds
    at their discretion to award grants to undergraduate students, with
    priority for Pell Grant recipients and others with exceptional need. The
    Federal share of such grants may not exceed 75 percent of the total
    grant.

        Perkins Loan Program.--Schools award loans from revolving funds,
    composed of Federal Capital Contributions, collections on prior year
    loans, and Federal payments for loan cancellations granted in exchange
    for specified types of teaching, military or public service.

        Perkins Loans--Cancellations.--Under the Perkins Loan (formerly
    national direct student loan (NDSL)) cancellation program, institutional
    revolving funds are reimbursed for indebtedness cancelled as a result of
    a borrower engaging in certain public service occupations.

        The Higher Education Amendments of 1992 broadened statutory
    cancellations in the Perkins Loan program. This has resulted in a
    progressive increase in the usage of cancellations provisions by Perkins
    Loan borrowers in recent years.

        Reauthorization of the Higher Education Act.--The Department is
    currently developing proposals for reauthorization of the Higher
    Education Act. The Department's proposal will build on the
    accomplishments of the past four years and incorporate the following
    principles: (1) improve access to postsecondary education; (2) support
    effective education through high standards and high student achievement;
    (3) simplify program delivery and ensure accountability for taxpayer
    funds; and (4) improve outreach to potential students and linkages to
    employment and elementary/secondary education programs.

        Gatekeeping in Student Financial Assistance Programs.--The Federal
    student aid programs will make available more than $47 billion in grant,
    loan, and work-study assistance to about 8.1 million students in the
    academic year 1998-99. The Department of Education, together with States
    and accrediting agencies, works to ensure that institutions of higher
    education participating in the Federal student aid programs meet a basic
    standard of quality in the education and training of their students, and
    that these institutions are administratively capable and financially
    responsible.

        Since 1993, the Department has terminated the participation of more
    than 381 institutions that have violated the Federal regulations. During
    1997, it will complete its recertification of all institutions currently
    eligible to participate in the student financial assistance programs.

        The Department has also developed a risk analysis system that better
    enables it to identify institutions with potentially serious problems,
    and is currently pilot-testing the system for nationwide implementation.

        Furthermore, the Department has provided regulatory relief to
    institutions that have demonstrated outstanding administration of
    federal programs and strong financial responsibility. This relief will
    result in less frequent recertification, less fre-

    [[Page 428]]

    quent submission of compliance audits, and exemption from certain
    regulatory requirements.

        The Department helps students make better decisions by requiring
    schools to provide important information about their education programs.
    It enforces long-standing statutory requirements for institutions to
    inform prospective students of educational programs, college costs, and
    financial aid.

        The following tables display student aid funds available, the number
    of aid awards, average awards, and the unduplicated count of students
    receiving awards, based on current law and legislation proposed for
    later transmittal. The tables include aid under the Federal Family
    Education Loan (FFEL) program, formerly the Guaranteed Student Loan
    (GSL) program, the William D. Ford Direct Loan (DL) Program, as well as
    under programs in this account. The tables include the effects of
    matching funds wherever applicable. Perkins loan amounts also reflect
    available capital in institutional revolving funds, including loan
    collection and loan cancellation receipts. FFEL and DL amounts reflect
    the capital actually loaned, not the Federal costs of those loans.

          AID FUNDS AVAILABLE FOR POSTSECONDARY EDUCATION AND TRAINING

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Pell grants.........................       5,642       6,209       7,786
    Student loans:
      Guaranteed student loans:
        Stafford loans..................       9,792       9,880       9,642
        Unsubsidized Stafford loans.....       5,489       5,540       5,531
        PLUS............................       1,430       1,545       1,600
      Direct student loans:
        Stafford loans..................       5,028       5,830       6,958
        Unsubsidized Stafford loans.....       2,529       3,083       3,765
        PLUS............................         799       1,025       1,314
      Consolidation:
        FFEL............................       4,266       4,214       4,389
        Direct Loans....................         803       2,589       3,340
                                        ------------------------------------
            Student loans, subtotal.....      30,136      33,706      36,540
    Work-study..........................         760       1,007       1,036
    Supplemental educational opportunity
    grants..............................         738         738         738
    Perkins loans.......................         943       1,058       1,087
    State student incentive grants......          63         100           0
                                        ------------------------------------
            Total aid available.........      38,282      42,818      47,186
                                        ====================================

                              NUMBER OF AID AWARDS

                                 [In thousands]

                                         1996 actual  1997 est.   1998 est.
    Pell grants.........................       3,601       3,661       4,009
    Student loans:
      Guaranteed student loans:
        Stafford loans..................       2,871       2,693       2,524
        Unsubsidized Stafford loans.....       1,525       1,450       1,380
        PLUS............................         247         240         232
      Direct student loans:
        Stafford loans..................       1,551       1,823       2,150
        Unsubsidized Stafford loans.....         775         951       1,137
        PLUS............................         142         185         230
      Consolidation:
        FFEL............................         281         305         308
        Direct Loans....................          83         215         290
                                        ------------------------------------
            Student loans, subtotal.....       7,476       7,862       8,250
      Work-study........................         713         945         973
      Supplemental educational
        opportunity grants..............         991         991         991
      Perkins loans.....................         703         788         810
      State student incentive grants....         105         167           0
                                        ------------------------------------
            Total awards................      13,588      14,414      15,034
                                        ====================================

                               AVERAGE AID AWARDS

                               [In whole dollars]

                                         1996 actual  1997 est.   1998 est.
    Pell grants.........................       1,567       1,696       1,942
    Student loans:
      Guaranteed student loans:
        Stafford loans..................       3,411       3,669       3,820
        Unsubsidized Stafford loans.....       3,598       3,821       4,009
        PLUS............................       5,788       6,437       6,909
      Direct student loans:
        Stafford loans..................       3,242       3,198       3,236
        Unsubsidized Stafford loans.....       3,262       3,242       3,312
        PLUS............................       5,623       5,534       5,726
      Consolidation:
        FFEL............................      15,160      13,816      14,250
        Direct Loans....................       9,716      12,042      11,517
    Work-study..........................       1,065       1,065       1,065
    Supplemental educational opportunity
    grants..............................         745         745         745
    Perkins loans.......................       1,342       1,342       1,342
    State student incentive grants......         600         600         600

                            NUMBER OF STUDENTS AIDED

                                 [In thousands]

                                         1996 actual  1997 est.   1998 est.
    Unduplicated student count..........       7,238       7,607       8,057

        The following table displays institutional administrative costs paid
    from program funds.

                     ADMINISTRATIVE PAYMENTS TO INSTITUTIONS

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Pell grants.........................          18          18          20
    Work-study..........................          47          64          66
    Supplemental educational opportunity
    grants..............................          30          30          30
    Perkins loans.......................          38          42          43
    Direct student loans................           8           0           0

        The following table displays the status of defaulted Perkins loans
    held by the Department and by institutions.

                             DEFAULTED PERKINS LOANS

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Outstanding defaulted loans,
        beginning of year:
      Assigned defaulted loans \1\......         187         207         223
      Unassigned defaulted loans \2\....         760         776         793
    New defaulted loans.................         172         175         177
    Collections on assigned loans.......         -31         -31         -31
    Collections on unassigned loans.....         -87         -90         -92
    Write-offs for assigned loans.......          -5          -8          -8
    Write-offs for unassigned loans.....         -13         -13         -13
                                        ------------------------------------
    Outstanding defaulted loans, end of
    year................................         983       1,016       1,049
                                        ====================================
        \1\ Permanently assigned to the Federal Government for collection.
    Does not include the following amounts in loans made to institutions to
    establish Perkins revolving funds: $94 thousand in 1996, $94 thousand in
    1997, and $94 thousand in 1998. These amounts are recorded as
    outstanding loans in the ``Status of Direct Loans'' schedule.
        \2\ Unassigned loans at institutions.

                                Higher Education

        For carrying out, to the extent not otherwise provided, [parts A and
    B of] title III, without regard to section 360(a)(1)(B)(ii), titles IV,
    V, VI, VII, and IX, and part A and subpart 1 of part B of title X[, and
    title XI] of the Higher Education Act of 1965, as amended, part G of
    title XV of Public Law [102-423] 102-325 and the Mutual Educational and
    Cultural Exchange Act of 1961; [$879,054,000] $903,292,000, of which
    [$15,673,000] $13,700,000 for interest subsidies under title VII of the
    Higher Education Act[, as amended,] shall remain available until
    expended: Provided, That funds available for part D of title IX of the
    Higher Education Act shall be available to fund noncompeting
    continuation awards for academic year [1997-1998] 1998-1999 for
    fellowships awarded originally under part [B] C of title IX of said Act,
    under the terms and conditions of part [B: Provided further, That
    $5,931,000 of the funds available for part D of title IX of the Higher
    Education Act shall be available to fund new and noncompeting
    continuation awards for academic year 1997-1998 for fellowships awarded
    under part C of title IX of said Act, under the terms and conditions of
    part C: Provided further, That notwithstanding sections 419D, 419E, and
    419H of the Higher Education Act, as amended, scholarships made under
    title IV, part A, subpart 6 shall be prorated to maintain the same
    number of new scholarships in fiscal year 1997 as in fiscal year 1996:
    Provided further, That $3,000,000, to remain available until expended,
    shall be for the George H.W. Bush fellowship program,

    [[Page 429]]

    if authorized by April 1, 1997: Provided further, That $3,000,000, to
    remain available until expended, shall be for the Edmund S. Muskie
    Foundation to establish an endowment fund to provide income to support
    such foundation on a continuing basis, if authorized by April 1, 1997:
    Provided further, That $3,000,000, to remain available until expended,
    shall be for the Claiborne Pell Institute for International Relations
    and Public Policy at Salve Regina University in Newport, Rhode Island,
    if authorized by April 1, 1997: Provided further, That $1,000,000, to
    remain available until expended, shall be for the Calvin Coolidge
    Memorial Foundation, if authorized by April 1, 1997: Provided further,
    That, of the amounts made available under title X, part A of the Higher
    Education Act, $2,000,000 shall be awarded to the Pennsylvania
    Educational Telecommunications Exchange Network.] C: Provided further,
    That funds available for part C of title III of the Higher Education Act
    shall be available only for awards to recipients that are title III,
    part B institutions, as defined in section 322(2) of said Act.
    (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Aid for institutional development:

    00.01   Strengthening historically Black
              colleges and universities.....         129         129         133
    00.02   Strengthening institutions......          55          55          55
    00.03   Strengthening Hispanic serving
              institutions..................          11          11          12
    00.04   Endowment challenge grants......           7           8           2
                                               ---------   ---------  ----------
    00.91     Subtotal, aid for
                institutional development...         202         203         202
          Other aid for institutions:

    01.01   Program development.............          93          94          87
    01.02   Interest subsidy grants.........          17          20          14
    01.03   Special grants..................           8           8
                                               ---------   ---------  ----------
    01.91     Subtotal, other aid for
                institutions................         118         122         101
          Aid for students:

    02.01   Federal TRIO programs...........         463         500         525
    02.02   Advanced placement fees.........                                   6
    02.03   Scholarships....................          32          33          39
    02.04   Graduate fellowships............          31          33          30
                                               ---------   ---------  ----------
    02.91     Subtotal, aid for students....         526         566         600
                                               ---------   ---------  ----------
    10.00   Total obligations...............         846         891         903
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          20          12
    22.00 New budget authority (gross)......         837         879         903
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           2
    22.30 Unobligated balance expiring......          -2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         857         891         903
    23.95 New obligations...................        -846        -891        -903
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          12
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         837         879         903
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         974         942         953
    73.10 New obligations...................         846         891         903
    73.20 Total outlays (gross).............        -846        -880        -881
    73.40 Adjustments in expired accounts...         -29
    73.45 Adjustments in unexpired accounts.          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         942         953         975
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          76         123         119
    86.93 Outlays from current balances.....         770         757         762
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         846         880         881
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         837         879         903
    90.00 Outlays...........................         847         880         881
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................         837         879         903
      Outlays...........................         846         880         881
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 132
      Outlays...........................                                  16
                                        ------------------------------------
    Total:
      Budget Authority..................         837         879       1,035
      Outlays...........................         846         880         897
                                        ====================================

        Aid for institutional development.--
            Strengthening historically Black colleges and universities.--
        Funds support grants to help historically Black undergraduate and
        graduate institutions equalize educational opportunity and
        strengthen their management and fiscal operations so that they may
        eventually become self-sufficient.
            Strengthening institutions.--Funds support planning and
        development grants for improving academic programs and financial
        management at schools that enroll high proportions of disadvantaged
        students and have low per-student expenditures.
            Strengthening Hispanic-serving institutions.--Funds support
        Hispanic-serving institutions to enable them to improve and expand
        their capacity to serve Hispanic and low-income students.
            Endowment challenge grants.--Funds support endowment challenge
        grants for historically Black colleges and universities to enable
        such institutions to establish or increase institutional endowment
        funds.

        Other aid for institutions.--
            Program development.--Funds support: the Fund for the
        Improvement of Postsecondary Education (FIPSE), to address problems
        and encourage improvements in postsecondary education; the minority
        science improvement program, to improve science education at
        predominantly minority institutions; international education and
        foreign language study programs, to help strengthen American
        education in foreign languages and area and international studies
        and to provide research and study opportunities in foreign countries
        for American graduate students, faculty members, and teachers of
        foreign languages; and minority teacher recruitment, to encourage
        minorities to enter teaching careers.
            Interest subsidy grants.--Funds meet mandatory interest subsidy
        costs of construction loan commitments made prior to 1974.

        Aid for students.--
            Federal TRIO programs.--Funds support: academic, counseling and
        outreach services to help individuals from disadvantaged backgrounds
        enter and complete college; the student support services program to
        assist postsecondary students from disadvantaged backgrounds who
        need academic support to complete successfully their education; the
        McNair postbaccalaureate program, to provide support to
        disadvantaged groups underrepresented in graduate education; and
        staff training, to provide training opportunities for staff employed
        in or preparing for employment in TRIO programs. Funds also support
        the continuation of an evaluation of the TRIO programs.
            Advanced placement fees.--Funds support State efforts to pay for
        the Advanced Placement test fees of low-income students to help
        students obtain college credit for high school courses.
            Scholarships.--Funds support: Byrd honors scholarships for
        outstanding students who show promise of continued excellence.
            Graduate fellowships.--Funds support graduate assistance to
        provide fellowships to financially needy graduate students who are
        studying in areas of national need, and

    [[Page 430]]

        to students of superior ability completing graduate-level education.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           1           1           1
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    25.7  Operation and maintenance of
            equipment.......................           1           1           1
    41.0  Grants, subsidies, and
            contributions...................         842         887         899
    99.5  Below reporting threshold.........           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............         846         891         903
    ---------------------------------------------------------------------------

                                Higher Education

             (Proposed for later transmittal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-2-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................                                 132
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 132
    23.95 New obligations...................                                -132
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 132
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 132
    73.20 Total outlays (gross).............                                 -16
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                 116
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                  16
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 132
    90.00 Outlays...........................                                  16
    ---------------------------------------------------------------------------

        Presidential Honors Scholarships.--The President is proposing a new
    program to reward the best and brightest of our nation's high school
    students. The program would provide $1,000 merit-based scholarship
    awards to the top 5 percent of graduating students from every secondary
    school in the country. Awards would be used by students to offset the
    cost of attending any postsecondary education institution. This program
    would encourage and reward individual academic excellence and
    achievement in high school, and promote college attendance by graduating
    seniors.

                                Howard University

        For partial support of Howard University (20 U.S.C. 121 et seq.),
    $196,000,000[: Provided, That from the amount available, the University
    may at its discretion use funds for the endowment program as authorized
    under], of which not less than $3,530,000, of which $3,530,000 shall
    remain available until expended, shall be for a matching endowment grant
    pursuant to the Howard University Endowment Act (Public Law 98-480).
    (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0603-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Academic program..................         152
    00.02 Endowment program.................           4
    00.03 Research..........................           1
    00.04 Howard University Hospital........          29          29          29
    00.05 Construction......................           1
    00.06 Undistributed.....................                     167         167
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................         187         196         196
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           4
    22.00 New budget authority (gross)......         182         196         196
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         187         196         196
    23.95 New obligations...................        -187        -196        -196
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         182         196         196
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          14           9          13
    73.10 New obligations...................         187         196         196
    73.20 Total outlays (gross).............        -194        -192        -196
    73.40 Adjustments in expired accounts...           3
    73.45 Adjustments in unexpired accounts.          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           9          13          13
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         179         184         184
    86.93 Outlays from current balances.....          15           8          12
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         194         192         196
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         182         196         196
    90.00 Outlays...........................         194         192         196
    ---------------------------------------------------------------------------

        Howard University is a private, nonprofit educational institution
    consisting of 16 schools and colleges. Federal funds are used to provide
    partial support for university programs as well as for the teaching
    hospital facilities. In 1996, direct Federal appropriations for the
    academic and research programs represented 65 percent of the
    university's educational and general expenditures.

    Credit accounts:

                   Federal Direct Student Loan Program Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    02.01 Direct loan subsidy...............         237         413         645
    02.02 Reestimates of subsidy............           3
                                               ---------   ---------  ----------
    02.91   Subtotal, subsidy cost..........         240         413         645
    07.09 Student loan administrative
            expenses........................         435         491         750
                                               ---------   ---------  ----------
    10.00   Total obligations...............         675         904       1,395
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         680         904       1,395
    22.40 Capital transfer to general fund..          -5
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         675         904       1,395
    23.95 New obligations...................        -675        -904      -1,395
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.00 Appropriation.....................         436         491         750
    60.05 Appropriation (indefinite)........         244         109         645
                                               ---------   ---------  ----------
    63.00   Appropriation (total)...........         680         600       1,395
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............                     304
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         680         904       1,395
    ----------------------------------------------------------------------------

    [[Page 431]]

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         465         220         408
    73.10 New obligations...................         675         904       1,395
    73.20 Total outlays (gross).............        -595        -716      -1,126
    73.40 Adjustments in expired accounts...        -326
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         220         408         677
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         472         549         813
    86.98 Outlays from permanent balances...         123         167         313
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         595         716       1,126
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                    -304
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         680         600       1,395
    90.00 Outlays...........................         595         412       1,126
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................         680         600       1,395
      Outlays...........................         595         412       1,126
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                -112
      Outlays...........................                                 -56
                                        ------------------------------------
    Total:
      Budget Authority..................         680         600       1,283
      Outlays...........................         595         412       1,070
                                        ====================================

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Stafford..........................       5,587       6,427       7,671
    1150  Unsubsidized Stafford.............       2,869       3,475       4,246
    1150  PLUS..............................         972       1,265       1,626
    1150  Consolidated......................         869       2,622       3,386
                                               ---------   ---------  ----------
    1159    Total direct loan levels........      10,297      13,789      16,929
        Direct loan subsidy (in percent):
    1320  Stafford..........................       12.51       13.39       13.65
    1320  Unsubsidized Stafford.............      -12.97       -9.77       -6.93
    1320  PLUS..............................       -8.09       -6.62       -6.34
    1320  Consolidated......................       -0.83       -0.94       -0.14
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...        2.34        2.99        3.81
        Direct loan subsidy budget authority:
    1330  Stafford..........................         699         860       1,047
    1330  Unsubsidized Stafford.............        -372        -339        -294
    1330  PLUS..............................         -79         -84        -103
    1330  Consolidated......................          -7         -25          -5
    1330  Downward reestimate...............           3        -304
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..         244         108         645
        Direct loan subsidy outlays:
    1340  Stafford..........................         570         661         881
    1340  Unsubsidized Stafford.............        -313        -274        -276
    1340  PLUS..............................         -45         -60         -76
    1340  Consolidated......................         -15         -24          -5
    1340  Downward reestimate...............           3        -304
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........         200          -1         524
    ----------------------------------------------------------------------------

        Student loan administrative expense data:
    3510  Budget authority..................         436         491         750
    3590  Outlays...........................         395         413         602
    ---------------------------------------------------------------------------

        The Federal Government operates two major student loan programs: the
    Federal Family Education Loan (FFEL) program--formerly the Guaranteed
    Student Loan (GSL) program--and the William D. Ford Federal Direct Loan
    (Direct Loan) program. The President is committed to allowing individual
    institutions to choose which of these two programs best meets their
    needs and the needs of their students.

        This summary section outlines the structure of these two programs,
    highlights their differences and similarities, and provides text tables
    displaying program cost data; loan volume, subsidy, default, and
    interest rates; and other descriptive information. As part of his fiscal
    year 1998 budget, the President is proposing a number of changes for the
    Direct Loan and FFEL programs. These changes are discussed as part of
    this program description.

        From its inception in 1965 through 1996, the FFEL program has
    provided over $217 billion in loans to postsecondary students and their
    parents. Since beginning on July 1, 1994, the Direct Loan program has
    provided over $15 billion in loans to students and parents. Taken
    together, the FFEL and Direct Loan programs will make over $32 billion
    available in FY 1997. Because funding for these two programs is provided
    on a permanent indefinite basis, for budget purposes they are considered
    separately from other Federal student financial assistance programs. The
    FFEL and Direct Loan programs should be viewed in combination with these
    other programs, however, and with Perkins Loans in particular, as part
    of the overall Federal effort to ensure access to higher education.

        Loan capital in the FFEL program is provided by private lenders.
    State and private nonprofit guaranty agencies act as agents of the
    Federal government, providing a variety of services including payment of
    default claims, collection of some defaulted loans, default avoidance
    activities, and counseling to schools and students. These agencies also
    provide various other services to lenders. The Government provides
    substantial payments to these guaranty agencies. The Government also
    pays interest subsidies to lenders for certain borrowers, as well as
    most costs associated with loan defaults and other write-offs.

        The Direct Loan program was created by the Student Loan Reform Act
    (SLRA) of 1993. Under this program, the Federal Government provides loan
    funds to postsecondary institutions directly or through an alternative
    originator. Direct Loans offer a streamlined system that is simpler for
    student and parent borrowers, less prone to waste and abuse, and less
    expensive for the Federal taxpayer than the FFEL program. The program
    also offers flexible repayment options that allow borrowers to consider
    lower-paying careers, such as public service, without fear of default.

        The Direct Loan program began operation in academic year 1994-1995
    with 7 percent of overall loan volume. The program grew to 32 percent of
    overall volume in academic year 1995-1996, and is expected to account
    for 36 percent in academic year 1996-1997. All eligible institutions are
    free to participate in either the Direct Loan or FFEL program.

        The Direct Loan and FFEL programs share many basic elements. Each
    program offers four types of loans: Stafford, Unsubsidized Stafford,
    PLUS for parents, and Consolidation. Evidence of financial need is
    required for a student to receive a subsidized Stafford loan. The other
    three loan programs are available to borrowers at all income levels.
    Loans can be used only to meet qualified educational expenses.

        For new Stafford Loans, the interest rate equals the 91-day Treasury
    bill rate plus 2.5 percent during in-school, grace, and deferment
    periods, and the 91-day Treasury bill plus 3.1 percent at all other
    times, with a cap of 8.25 percent. These rates are adjusted annually.
    Interest payments for these loans are fully subsidized by the Government
    while a student is in school and during grace and deferment periods.
    Unsubsidized Stafford loans carry the same interest rate as Stafford
    loans, but have no interest subsidy. For PLUS loans, the interest rate
    equals the 52-week Treasury bill rate plus 3.1 percent, with a cap of 9
    percent and no interest subsidy.

        Beginning July 1, 1998, the interest rate for new Stafford and
    Unsubsidized Stafford loans will equal the Department's

    [[Page 432]]

    borrowing rate--currently the 10-20-year bond rate--plus 1 percentage
    point, with a cap of 8.25 percent. This rate, adjusted annually, will
    apply throughout the life of the loan. In order to standardize interest
    subsidy payments across the FFEL and Direct Loan programs and reduce
    interest paid by students on unsubsidized loans, the President is
    proposing that, beginning on October 1, 1998, the interest subsidy rate
    for new Stafford and interest rate for new Unsubsidized Stafford loans
    equal the Department's borrowing rate during in-school, grace, and
    deferment periods.

        Consolidation loans allow borrowers to combine loans made under
    Title IV of the Higher Education Act--FFEL, Direct Loans, and Perkins
    Loans--as well as some loans made under the Public Health Service Act.
    Under FFEL, the interest rate for loans made on or after July 1, 1994,
    equals the weighted average of the interest rate on the loans
    consolidated, rounded upward to the nearest whole percent. Lenders may
    choose to offer a lower rate.

        Direct Consolidation loans made up of underlying Stafford and
    Unsubsidized Stafford loans carry the variable Stafford interest rate;
    Direct Consolidation loan made up of underlying PLUS loans carry the
    variable PLUS interest rate. The President is proposing that interest
    rates for new FFEL Consolidation loans be calculated in the same way as
    is currently done for Direct Consolidation loans. The President is also
    proposing to allow borrowers whose FFEL Consolidation Loans include
    underlying Stafford Loans to maintain interest subsidy benefits
    associated with the Stafford portions of their loans. Direct
    Consolidation Loan borrowers already retain these benefits.

        Origination/insurance fees for each loan type are essentially the
    same across the two programs. Direct Loan borrowers are charged an
    origination fee equal to 4 percent of principal, which partially offsets
    Federal program operation costs. FFEL borrowers pay an origination fee
    to the Government equal to 3 percent of principal, and are also liable
    for a guaranty agency insurance premium of up to 1 percent of principal.

        Guaranty agencies have the option of waiving this premium. In
    addition, FFEL lenders have the option of paying some or all of a
    borrower's original fee for Stafford Loan borrowers. The President is
    proposing to eliminate the 1 percent guaranty agency insurance premium,
    reduce the Direct Loan origination fee from 4 percent to 3 percent, and
    further reduce fees for Stafford borrowers in both programs to 2
    percent. The President is also proposing that FFEL lenders be required
    to offer any benefits involving the partial or complete payment of
    borrower origination fees to all eligible borrowers.

        Loan limits are also identical across the two programs. The
    President has proposed a $15,000 annual limit on borrowing for an
    individual student under the PLUS loan program. (There is currently no
    limit on borrowing under this program.)

        In addition to these common elements, the Direct Loan and FFEL
    programs each have a number of unique provisions.

        Borrowers under Direct Loans may choose from among five repayment
    plans including income-contingent repayment (``pay-as-you-can''), under
    which annual repayment amounts vary based on the income of the borrower
    and the amount borrowed and payments can be made over 25 years.
    Borrowers may switch between repayment plans at any time. (Income-
    contingent repayment is not available to Direct PLUS borrowers).

        The President is proposing to require FFEL lenders to offer four of
    these plans--standard, graduated, extended, and alternative--under the
    same terms and conditions available under Direct Loans. The President
    has determined that income-contingent repayment as offered through
    Direct Loans--under which the Department has access to income data
    provided by the Internal Revenue Service--would not be feasible for
    private lenders to administer. In addition, the President is proposing
    to clarify current law that loan amounts forgiven after 25 years under
    the income-contingent repayment plan are not treated as income for tax
    purposes.

        In the FFEL program, lenders may receive a quarterly interest
    subsidy, called a special allowance, from the Government to ensure a
    guaranteed rate of return on their loans. Special allowance payments
    vary by loan type, are determined quarterly, and are based on current
    borrower interest rates and market-yield formulas. For recent Stafford
    and Unsubsidized Stafford loans, for example, the Federal Government
    must pay lenders a special allowance if the average 91-day Treasury bill
    rate for a given quarter plus 3.1 percent--or 2.5 percent during in-
    school, grace, or deferment periods--is higher than the current interest
    rate charged borrowers.

        The President is proposing to reset the interest rate for special
    allowance payments on new loans on an annual basis, as is done with
    borrower interest rates, rather than quarterly as is done under current
    law.

        The President is proposing a number of changes to address serious
    structural problems with the FFEL default prevention system. Under the
    current system, lenders are insured by the government against default
    loss on 98 percent of the principle and accrued interest on all FFEL
    loans. The President proposes increasing this 2-percent risk-sharing to
    5 percent. Supplemental pre-claims assistance payments to guaranty
    agencies, which have proven ineffective in achieving their intended goal
    of enhancing agency default prevention activities, would be eliminated.
    As a more effective means of accomplishing this goal, the President is
    proposing that lenders make payments to guaranty agencies only on
    delinquent loans that have been brought current as a result of guaranty
    agency efforts.

        Guaranty agencies currently retain 27 percent of all collections on
    defaulted loans, a portion of which covers agency collection costs. In
    order to standardize payments for default collection activities across
    the student loan programs, the President is proposing to reduce guaranty
    agency default retention to 18.5 percent of the amount collected, the
    amount paid on loans collected by the Department of Education.

        The President is proposing a number of changes in the guaranty
    agency system. The U.S. General Accounting Office and Federal courts
    have acknowledged that the Federal government is the actual guarantor of
    the loans. The State and non-profit intermediaries in the FFEL program
    act as agents of the Federal government; there are no non-Federal funds
    at risk. Guaranty agencies are not independent guarantors, but are in
    fact administrators of the Federal guarantee. The Administration
    proposes to end a system in which the guaranty agencies hold Federal
    funds from which they pay default claims. Instead, direct Federal
    payments will cover default claims. Guaranty agencies therefore no
    longer need to hold Federal funds in reserve, making possible the return
    of $2.5 billion in reserve funds over five years. In addition, the
    President is proposing to periodically recertify guaranty agency
    agreements, which will be revised to include specific, publicly released
    performance indicators. Among other things, these revised agreements
    will require that agencies be audited annually using a methodology that
    samples loans held in agency systems, and that guaranty agencies submit
    timely, accurate, and consistent data to the Department, including data
    for the National Student Loan Data System. The Secretary of Education
    will have the authority to terminate agreements based on agency
    performance, and to award contracts for services currently performed by
    guaranty agencies.

        In order to ensure the uninterrupted availability of aid funds for
    students and parents, Congress provided permanent

    [[Page 433]]

    funding to support student aid administration and expenses. These funds
    support Department personnel and contractors for Direct Loan origination
    and servicing, payments to guaranty agencies, as well as certain costs
    associated with activities common to Direct Loans, FFEL and other
    student assistance programs, such as application printing and
    processing. The President believes that the current services level of
    this permanent appropriation could be reduced. Discretionary funds
    requested for the FFEL program support additional Department personnel
    and administrative activities associated with operating the program.

        Performance indicators are being developed on a broad spectrum of
    policy objectives in both the Direct Loan and FFEL programs. These
    indicators will measure program efficiency, Federal costs, and financial
    management, as well as borrower and institutional satisfaction.

        The following tables display performance indicators and program
    data; including projected overall Direct Loan and FFEL costs; loan
    volume, number of loans, and average loan amount; descriptive data, and
    program activity under the President's budget and legislative request.

                      Funding Levels (In thousands of dollars)

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    Budget Authority:
    FFEL:
      Liquidating \1\.......................   1,152,916    (14,544)   (493,553)
      Program \2\...........................   2,937,780   2,631,163   2,068,274
      Reestimate of Prior Year Cost \2\.....     595,000 (2,530,592)
                                               ---------   ---------  ----------
        Subtotal, FFEL \2\..................   4,685,696      86,027   1,574,721
    Direct Loans:
      Program \2\...........................     248,230     437,338     756,105
      Reestimate of Prior Year Cost \2\.....       2,698   (303,653)
                                               ---------   ---------  ----------
        Subtotal, Direct Loans \2\..........     250,928     133,685     756,105
    Consolidation Loans:
      FFEL..................................      13,305      29,950       9,667
      Direct Loans..........................     (7,208)    (24,692)     (4,760)
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......       6,097       5,258       4,907
    Administration:
      FFEL \3\..............................      29,977      46,482      47,688
      Student Aid \4\.......................     435,652     491,000     532,000
                                               ---------   ---------  ----------
        Subtotal, Administration............     465,629     537,482     579,688
      Total, FFEL and Direct Loans..........   5,408,350     762,452   2,915,421
    Outlays:
    FFEL:
      Liquidating \1\.......................     615,609       7,266   (413,615)
      Program \2\...........................   2,398,610   2,483,035   2,078,153
      Reestimate of Prior Year Costs \2\....     595,000 (2,530,592)
                                               ---------   ---------  ----------
        Subtotal, FFEL \2\..................   3,609,219    (40,291)   1,664,538
    Direct Loans:
      Program \2\...........................     212,165     326,939     586,154
      Reestimate of Prior Year Costs \2\....       2,698   (303,653)
                                               ---------   ---------  ----------
        Subtotal, Direct Loans \2\..........     214,863      23,286     586,154
    Consolidation Loans:
      FFEL..................................      13,207      29,613       9,560
      Direct Loans..........................    (14,771)    (23,839)     (4,696)
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......     (1,564)       5,774       4,864
    Administration:
      FFEL \3\..............................      41,530      41,264      45,812
      Student Aid \4\.......................     394,669     413,650     489,096
                                               ---------   ---------  ----------
        Subtotal, Administration............     436,199     454,922     534,908
      Total, FFEL and Direct Loans..........   4,258,717     443,691   2,790,464
    ---------------------------------------------------------------------------
        \1\ Liquidating account reflects loans made prior to 1992. FY 1997 and
    1998 estimates reflect net transfers to the general account.
        \2\ Because these figures do not include totals for consolidation loans,
    they do not correspond with totals shown in account-specific schedules.
        \3\ Reflects annual discretionary appropriation.
        \4\ Supports administrative expense allowance payments to FFEL guaranty
    agencies, as well as a range of administrative activities, such as
    application printing, mailing, and processing, that are common to all
    Federal student financial assistance programs.

       Summary of Loans Available (net commitments in millions of dollars) \1\

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       9,792       9,880       9,642
      Unsubsidized Stafford.................       5,489       5,540       5,531
      PLUS..................................       1,430       1,545       1,600
                                               ---------   ---------  ----------
          Total, FFEL.......................      16,711      16,965      16,774
    Direct Loans:
      Stafford..............................       5,028       5,830       6,958
      Unsubsidized Stafford.................       2,529       3,083       3,765
      PLUS..................................         799       1,025       1,314
                                               ---------   ---------  ----------
        Total, Direct Loans.................       8,357       9,938      12,037
    Consolidation Loans:
      FFEL..................................       4,266       4,214       4,389
      Direct Loans..........................         803       2,589       3,340
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......       5,069       6,803       7,729
        Total, All Loans....................      30,137      33,706      36,540
    ---------------------------------------------------------------------------
        \1\ Net commitments equal gross commitments minus loan cancellations.

                           Number of Loans (In thousands)

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       2,871       2,693       2,524
      Unsubsidized Stafford.................       1,525       1,450       1,380
      PLUS..................................         247         240         232
                                               ---------   ---------  ----------
        Total, FFEL.........................       4,643       4,383       4,136
    Direct Loans:
      Stafford..............................       1,551       1,823       2,150
      Unsubsidized Stafford.................         775         951       1,137
      PLUS..................................         142         185         230
                                               ---------   ---------  ----------
        Total, Direct Loans.................       2,468       2,959       3,516
    Consolidation Loans:
      FFEL..................................         281         305         308
      Direct Loans..........................          83         215         290
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......         364         520         598
        Total, All Loans....................       7,476       7,862       8,250
    ---------------------------------------------------------------------------

                        Average Loan Size (in whole dollars)

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       3,411       3,669       3,820
      Unsubsidized Stafford.................       3,598       3,821       4,009
      PLUS..................................       5,788       6,437       6,909
                                               ---------   ---------  ----------
          Weighted Average, FFEL............       3,599       3,871       4,056
    Direct Loans:
      Stafford..............................       3,242       3,198       3,236
      Unsubsidized Stafford.................       3,262       3,242       3,312
      PLUS..................................       5,823       5,534       5,726
                                               ---------   ---------  ----------
          Weighted Average, Direct Loans....       3,388       3,359       3,423
    Consolidation Loans:
      FFEL..................................      15,180      13,816      14,250
      Direct Loans..........................       9,716      12,042      11,517
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......      13,923      13,083      12,925
          Weighted Average, All Loans.......       4,031       4,287       4,429
    ---------------------------------------------------------------------------

                         Composition of Consolidation Loans

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    Net commitments (in millions of
        dollars):
    FFEL:
      Standard consolidations...............       3,815       3,784       3,940
      Consolidations from Default...........         451         430         449
                                               ---------   ---------  ----------
          Subtotal, FFEL....................       4,266       4,214       4,389
    Direct Loans:
      Standard consolidations...............         513       2,270       2,989
      Consolidations from Default...........         290         319         351
                                               ---------   ---------  ----------
          Subtotal, Direct Loans............         803       2,589       3,340
    Total:
      Standard consolidations...............       4,328       6,054       6,929

    [[Page 434]]

      Consolidations from Default...........         741         749         806
                                               ---------   ---------  ----------
          Total, Consolidated Loans.........       5,069       6,803       7,729
    ---------------------------------------------------------------------------

     Summary of Subsidy Rates, Default Rates, Interest Rates, and Discount Rates

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    Subsidy Rates (in percent) \1\
    FFEL:
      Stafford..............................       19.55       19.38       15.10
      Unsubsidized Stafford.................        7.56        7.47        6.63
      PLUS..................................        3.83        3.70        3.32
                                               ---------   ---------  ----------
        Weighted Average, FFEL..............       14.22       14.01       11.15
    Direct Loans:
      Stafford..............................       14.25       13.39       14.65
      Unsubsidized Stafford.................       -8.98       -9.77       -6.43
      PLUS..................................       -6.53       -6.62       -5.84
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans......        5.00        3.92        5.58
    Consolidation Loans:
      FFEL..................................        0.78        0.70        0.22
      Direct Loans..........................        0.27       -0.94       -0.14
                                               ---------   ---------  ----------
        Weighted Average, Consolidation
          Loans.............................        0.70        0.08        0.06
    Default Rates (in percent) \2\..........
    FFEL:
      Stafford..............................       18.00       17.70       17.67
      Unsubsidized Stafford.................       17.55       17.22       17.19
      PLUS..................................        9.56        9.28        9.16
                                               ---------   ---------  ----------
        Weighted Average, FFEL..............       17.13       16.78       16.70
    Direct Loans:
      Stafford..............................       17.22       17.46       17.32
      Unsubsidized Stafford.................       16.76       17.06       17.02
      PLUS..................................        8.51        8.69        8.68
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans......       16.25       16.43       16.28
    Consolidation Loans:
      FFEL..................................       10.50       10.50       10.50
      Direct Loans..........................       10.50       10.50       10.50
                                               ---------   ---------  ----------
        Weighted Average, Consolidation
          Loans.............................       10.50       10.50       10.50
    Borrower Interest Rates (in percent)....
    FFEL:
      Stafford\3\...........................        8.25        8.21        7.11
      Unsubsidized Stafford\3\..............        8.25        8.21        7.11
      PLUS\3\...............................        8.60        8.62        8.21
    Direct Loans
      Stafford\3\...........................        8.25        8.21        7.11
      Unsubsidized Stafford\3\..............        8.25        8.21        7.11
      PLUS\3\...............................        8.60        8.62        8.21
    Consolidation Loans:
      FFEL\4\...............................
      Direct Loans \4\......................
    Federal Borrowing Rate for Direct Loans
        (in percent)........................        6.64        6.35        6.11
    ---------------------------------------------------------------------------
        \1\ Subsidy rates represent the Federal portion of non-administrative
    costs--principally interest subsidies and defaults--associated with each
    borrowed dollar. For example, a $1,000 loan with Federal subsidy costs of
    $100 would have a subsidy rate of 10 percent.
        \2\ Default rates displayed in this table, which reflect projected
    defaults over the life of a loan cohort, are used in developing program cost
    estimates. The Department uses other rates based on defaults occurring in
    the first two years of repayment to determine institutional eligibility to
    participate in Federal loan programs. These three-year rates tend to be
    lower than those included in this table.
        \3\ Rates shown for FY 1998 are those in effect beginning July 1, 1998.
        \4\ Under current law, interest rates under the FFEL Consolidation Loan
    program reflect a weighted average of the rates of the loans consolidated,
    rounded upward to the nearest whole percentage. For the Direct Loan
    Consolidation program, loans consolidated from the Stafford and Unsubsidized
    Stafford Loan program are charged the Stafford Loan interest rate. Loans
    consolidated from the PLUS Loan program are charged the PLUS interest rate.

            Composition of Default Collections (In thousands of dollars)

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    FFEL:
      Collections by Guaranty Agencies \1\.. (1,291,999) (1,027,653) (1,078,173)
      Collections by Department of Education   (808,253)   (642,883)   (674,487)
      Internal Revenue Service Tax Refund
        Offsets.............................   (513,785)   (408,663)   (428,753)
                                               ---------   ---------  ----------
          Total, FFEL\2\.................... (2,614,036) (2,079,199) (2,181,414)
    Direct Loans:
      Collections by Department of Education          28       2,190       7,292
      Internal Revenue Service Tax Refund
        Offsets.............................
                                               ---------   ---------  ----------
          Total, Direct Loans \2\...........          28       2,190       7,292
                                               ---------   ---------  ----------
    Total, FFEL and Direct Loans............ (2,614,008) (2,077,009) (2,174,122)
    ---------------------------------------------------------------------------
        \1\ These figures show total collections by guaranty agencies. Actual
    Federal revenues resulting from these collections are lower than the amount
    shown because agencies retain 27 percent of the amount collected.
        \2\ These figures include collections on Consolidations Loans, which
    have very low default rates. For FY 1996, Consolidation Loan-related
    collections totaled $26,555,135 for FFEL and $4,437 for Direct Loans.

      Projected Participation in Repayment Plans \1\ (in thousands of dollars)

    ----------------------------------------------------------------------------
                                             1996 cohort 1997 cohort 1998 cohort
    ----------------------------------------------------------------------------
        FFEL:\1\
          Standard:

            Percent of Loan Volume:\2\
              Stafford......................      100.00      100.00       64.88
              Unsubsidized Stafford.........      100.00      100.00       64.88
              PLUS..........................      100.00      100.00       80.68
              Consolidation.................      100.00      100.00       69.59
            Subsidy Rate (in percent):\3\
              Stafford......................       19.55       19.38       15.33
              Unsubsidized Stafford.........        7.56        7.47        7.04
              PLUS..........................        3.83        3.70        3.54
              Consolidation.................        0.78        0.70        0.30
          Graduated:\3\

            Percent of Loan Volume:\2\
              Stafford......................                               28.73
              Unsubsidized Stafford.........                               28.73
              PLUS..........................                               14.00
              Consolidation.................                               17.38
            Subsidy Rate (in percent):\3\
              Stafford......................                               14.66
              Unsubsidized Stafford.........                                5.85
              PLUS..........................                                2.38
              Consolidation.................                                0.04
          Extended:\3\

            Percent of Loan Volume:\2\
              Stafford......................                                6.39
              Unsubsidized Stafford.........                                6.39
              PLUS..........................                                5.32
              Consolidation.................                               13.03
            Subsidy Rate (in percent):\3\
              Stafford......................                               14.70
              Unsubsidized Stafford.........                                6.01
              PLUS..........................                                2.41
              Consolidation.................                                0.06
        Direct Loan:\3\
          Standard:

            Percent of Loan Volume:\2\
              Stafford......................       57.79       57.79       57.79
              Unsubsidized Stafford.........       57.79       57.79       57.79
              PLUS..........................       80.68       80.68       80.68
              Consolidation.................       18.62       18.62       18.62
            Subsidy Rate (in percent):\3\
              Stafford......................       15.37       14.92       16.30
              Unsubsidized Stafford.........       -9.45       -9.90       -6.32
              PLUS..........................       -5.79       -5.77       -4.97
              Consilidation.................        2.10        1.79        4.57
          Graduated:\3\

            Percent of Loan Volume:\2\
              Stafford......................       28.73       28.73       28.73
              Unsubsidized Stafford.........       28.73       28.73       28.73
              PLUS..........................       14.00       14.00       14.00
              Consolidation.................       17.38       17.38       17.38
            Subsidy Rate (in percent):\3\
              Stafford......................       13.12       11.86       13.47
              Unsubsidized Stafford.........      -12.21      -13.22       -9.20
              PLUS..........................       -9.92      -10.52       -9.79
              Consolidation.................       -0.35       -1.09        2.99
          Extended:\3\

            Percent of Loan Volume:\3\
              Stafford......................        6.39        6.39        6.39
              Unsubsidized Stafford.........        6.39        6.39        6.39
              PLUS..........................        5.32        5.32        5.32
              Consolidation.................       13.03       13.03       13.03
            Subsidy Rate (in percent):\3\
              Stafford......................       13.57       12.41       14.03
              Unsubsidized Stafford.........      -11.54      -12.40       -8.55
              PLUS..........................       -8.86       -9.30       -8.55
              Consolidation.................        0.33       -0.28        3.31
          Income-Contingent:

            Percent of Loan Volume:\2\
              Stafford......................        7.09        7.09        7.09
              Unsubsidized Stafford.........        7.09        7.09        7.09
              Consolidation.................       50.97       50.97       50.97
            Subsidy Rate (in percent):\3\
              Stafford......................       10.26        7.96        6.62

    [[Page 435]]

              Unsubsidized Stafford.........       10.18        7.71        5.80
              Consolidation.................       -0.21       -2.06       -3.81
    ---------------------------------------------------------------------------
        \1\ No data is included for the Alternative repayment plan under either
    FFEL or Direct Loans. Borrowers are not expected to participate in this plan
    due to the flexibility available under the other options. For FFEL, no data
    is included for income-sensitive repayment. This option, which has been
    available for a number of years, has never made up more than a tiny portion
    of overall loan volume. For Direct Loans, income-contingent repayment is not
    available for PLUS borrowers.
        \2\ Percent of Loan Volume represents aggregate data. Individual
    borrowers may move between plans over time.
        \3\ Maximum terms under the Extended and Graduated repayment plans
    reflect the following ``classes'' based on borrowers debt levels.
                        Debt Level      Maximum Term
                                         (in years)  Percent of
                                                       Volume
                                                       Within
                                                      Affected
                                                        Plans
                   Below $10,000........          12       57.57
                   $10,000-$20,000......          15       24.28
                   $20,000-$40,000......          20       14.56
                   $40,000-$60,000......          25        2.22
                   Above $60,000........          30        1.37

        Subsidy costs for the FFEL and Direct Loan programs are estimated in
    accordance with procedures set out in the Credit Reform Act of 1990.
    Subsidy costs for each loan type are estimated separately and, because
    costs can vary widely within a program depending on the characteristics
    of the individual borrower, cost estimates are aggregated from data for
    homogeneous groups within risk categories.

        Risk categories for Stafford and Unsubsidized Stafford Loans are
    based on the type of school attended by the borrower. Since PLUS loan
    borrowers are all parents, they are assumed to share similar risk
    profiles and are grouped together in a single category. For
    Consolidation Loans, risk categories distinguish between standard
    Consolidation Loans--in which borrowers in repayment consolidate a
    number of outstanding loans--and loans consolidated out of default.

        Default rates are a major cause of differences in subsidy between
    risk categories. The default rates in the following tables reflect
    estimates of the percent of borrowers who will default over the lifetime
    of the loans. These estimates are revised annually based on an analysis
    of default trends prepared each year by an independent auditor. Within
    each risk group, it is assumed that borrowers choosing similar repayment
    plans will have similar default rates, regardless of whether they borrow
    under the FFEL or Direct Loan program.

        The risk group data below also reflect proposed policy changes and
    interest rate projections in the President's 1998 Budget. These factors
    substantially decrease subsidy rates across years in the FFEL program.
    Subsidy rates in the Direct Loan program increase over the same period,
    primarily due to proposals to reduce borrower origination fees.

                      FFEL RISK CATEGORIES: STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       25.68       25.25       20.39
      Category 2: 4 year college, 3rd
        and 4th year students...........       16.17       15.77       13.08
      Category 3: 2 year college, all
        students........................        22.9       22.51       20.36
      Category 4: Proprietary school,
        all students....................       21.25       21.01       20.12
      Category 5: Graduate students.....        16.9       16.53       12.94

                        Gross Default Rates (in percent)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       21.49       21.14        21.1
      Category 2: 4 year college, 3rd
        and 4th year students...........       15.23       15.24       15.35
      Category 3: 2 year college, all
        students........................       31.18       31.11       31.12
      Category 4: Proprietary school,
        all students....................       37.75       37.72       37.67
      Category 5: Graduate students.....       10.37       10.38       10.39

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       10.29       10.09        9.93
      Category 2: 4 year college, 3rd
        and 4th year students...........        6.73        6.69        6.66
      Category 3: 2 year college, all
        students........................        15.6       15.46       15.35
      Category 4: Proprietary school,
        all students....................       18.59        18.5        18.3
      Category 5: Graduate students.....        2.86         2.8        2.81

                        Gross Default Rates (in percent)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       21.87       21.41       21.44
      Category 2: 4 year college, 3rd
        and 4th year students...........       15.37       15.36       15.47
      Category 3: 2 year college, all
        students........................       30.96       30.85       30.87
      Category 4: Proprietary school,
        all students....................        37.5       37.48       37.45
      Category 5: Graduate students.....       10.31       10.29       10.31

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1996 actual  1997 est.   1998 est.
      All PLUS Loans....................        3.83         3.7        3.32

                        Gross Default Rates (in percent)

      All PLUS Loans....................        9.56        9.28        9.16

                   DIRECT LOAN RISK CATEGORIES: STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       20.51       19.27       21.06
      Category 2: 4 year college, 3rd
        and 4th year students...........       11.33       10.33       12.63
      Category 3: 2 year college, all
        students........................       18.91       18.16       20.39
      Category 4: Proprietary school,
        all students....................       18.24       17.62       20.05
      Category 5: Graduate students.....       11.63       10.52       12.63

                        Gross Default Rates (in percent)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       22.47       22.49        22.2
      Category 2: 4 year college, 3rd
        and 4th year students...........       15.12       15.18        15.1
      Category 3: 2 year college, all
        students........................       31.59       31.62       31.55
      Category 4: Proprietary school,
        all students....................       37.66       37.76        37.8
      Category 5: Graduate students.....       10.37       10.36       10.32

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........        -6.8       -7.82       -4.01
      Category 2: 4 year college, 3rd
        and 4th year students...........       -8.86        -9.7       -6.05
      Category 3: 2 year college, all
        students........................       -0.98       -1.49        2.03
      Category 4: Proprietary school,
        all students....................         2.9        2.35         5.6
      Category 5: Graduate students.....      -12.77      -13.76       -9.92

                        Gross Default Rates (in percent)

                                         1996 actual  1997 est.   1998 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       22.44       22.58       22.43
      Category 2: 4 year college, 3rd
        and 4th year students...........        15.2        15.3       15.23
      Category 3: 2 year college, all
        students........................       31.17       31.37       31.32
      Category 4: Proprietary school,
        all students....................       37.45       37.52       37.58
      Category 5: Graduate students.....       10.23       10.29       10.26

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1996 actual  1997 est.   1998 est.
      All PLUS Loans....................       -6.53       -6.62       -5.84

                        Gross Default Rates (in percent)

      All PLUS Loans....................        8.51        8.69        8.68

           Summary of Program Costs and Offsets (In thousands of dollars)

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    Interest subsidy costs:
      FFEL:
        Interest benefits...................   2,522,360   1,974,346   1,710,834
        Special allowance...................     380,186     101,295      47,609
                                               ---------   ---------  ----------
          Total FFEL........................   2,902,546   2,075,641   1,758,443
        Direct Loans \1\....................     396,626     641,753     918,899
    Default costs and offsets:
      Default costs:\2\
        FFEL................................   2,573,669   2,874,541   3,006,268

    [[Page 436]]

        Direct Loans........................       4,743      23,254      74,230
      Gross default collections:
        FFEL................................  -2,614,037  -2,079,199  -2,181,415
        Direct Loans........................        (28)     (2,190)     (7,292)
      Default collection costs:
        FFEL:
          Contract collection costs.........     145,148     104,021     101,499
          Guaranty agency retention.........     348,840     277,466     291,107
                                               ---------   ---------  ----------
            Total, FFEL collect costs.......     493,988     381,487     392,606
        Direct Loans:
          Collection costs \3\..............           0          91         302
      Net default costs:\4\
        FFEL................................     453,620   1,176,829   1,217,459
        Direct Loans........................       4,715      21,155      67,240
    Death, disability, and bankruptcy costs:
        FFEL................................     222,890     261,603     260,072
        Direct Loans........................       2,679      18,798      39,337
    Other write-offs 5,6...............      28,841      50,037        n.a.
    Administrative Costs:
      Federal administration:
        FFEL................................      30,066      46,482      47,688
          Student Aid \7\...................     436,000     491,000     532,000
      Guaranty agency administrative
          payments:
        Student Aid Management \8\..........     167,040     152,752     152,143
      Supplemental preclaims assistance \5\.      43,002      22,501       7,165
      Payments for origination services \9\.      14,501       7,052       9,539
    Fees:
      Borrower origination fees:
        FFEL................................    -583,428    -502,018    -505,558
        Direct Loans........................    -317,550    -375,543    -447,727
        Lender origination fee \5\..........   (105,366)   (104,740)   (106,205)
        Sallie Mae offset fee \5\...........    (53,043)    (27,900)    (41,292)
        Consolidated loan holder fees \5\...    (64,301)   (129,130)   (162,128)
    ---------------------------------------------------------------------------
        \1\ This represents net interest costs associated with Direct Loans.
        \2\ Default costs under FFEL reflect claims paid to guaranty agencies.
    Default costs under Direct Loans reflect non-repayment of defaulted loans.
        \3\ In the budget schedules, Direct Loan collections are displayed net
    of collection costs.
        \4\ Net default costs equal default claims minus net collections (gross
    collections minus contract collection costs and guaranty agency retention).
        \5\ Applies to FFEL program only.
        \6\ Includes repayment of agency advances, elimination of excess agency
    reserves, through direct payments to the Government and reduced reinsurance
    payments to the agencies, and purchase of rehabilitated loans by the
    agencies.
        \7\ Supports a number of expenses related to the management of the
    student assistance programs. The largest of these, administrative expense
    allowances to guaranty agencies, is shown as a separate line.
        \8\ Administrative Expense Allowances paid from Student Loan
    administrative funds.
        \9\ Applies to Direct Loans only. These payments are made to Department
    contractors that provide alternative organization services. They are not
    made to institutions participating in the Direct Loan program.

                              Guaranty Agency Reserve Fund Levels (in millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
        1991          1992          1993         1994         1995       1996 \1\      1997 \2\      1998 \1\, \2\
    ----------------------------------------------------------------------------------------------------------------
    526.........         904        1,110        1,413        1,767         1,900         2,100           1,660
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimated.
    \2\ Assumes $731 million returned to the Federal government.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          23          26          26
    11.3    Other than full-time permanent..           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          24          27          27
    12.1  Civilian personnel benefits.......           5           6           7
    21.0  Travel and transportation of
            persons.........................           2           3           6
    23.1  Rental payments to GSA............           5           5           9
    23.3  Communications, utilities, and
            miscellaneous charges...........          14          14          29
    24.0  Printing and reproduction.........           7           7          16
    25.1  Advisory and assistance services..           4           2           4
    25.2  Other services....................           3          10          18
    25.3  Purchases of goods and services
            from Government accounts........           5           5           8
    25.7  Operation and maintenance of
            equipment.......................         184         257         478
    26.0  Supplies and materials............                       1           1
    31.0  Equipment.........................           1           1           2
    32.0  Land and structures...............           1           1
    41.0  Grants, subsidies, and
            contributions...................         420         565         790
                                               ---------   ---------  ----------
    99.9    Total obligations...............         675         904       1,395
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         481         520         520
    ---------------------------------------------------------------------------

                   Federal Direct Student Loan Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    02.01 Direct loan subsidy...............                                 106
    07.09 Student loan administrative
            expenses........................                                -218
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                -112
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                -112
    23.95 New obligations...................                                 112
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.00 Appropriation.....................                                -218
    60.05 Appropriation (indefinite)........                                 106
                                               ---------   ---------  ----------
    63.00   Appropriation (total)...........                                -112
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................                                -112
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation
    73.10 New obligations...................                                -112
    73.20 Total outlays (gross).............                                  56
    73.40 Adjustments in expired accounts...
    73.45 Adjustments in unexpired accounts.
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                 -56
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                 -56
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                -112
    90.00 Outlays...........................                                 -56
    ---------------------------------------------------------------------------

        A description of the Administration's proposed legislation to modify
    the Direct Loan program is included under the Federal Direct Loan
    program account.

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct loan subsidy (in percent):
    1320  Stafford..........................                                1.00
    1320  Unsubsidized Stafford.............                                0.50
    1320  PLUS..............................                                0.50
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...                                0.63
        Direct loan subsidy budget authority:
    1330  Stafford..........................                                  77
    1330  Unsubsidized Stafford.............                                  21
    1330  PLUS..............................                                   8
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..                                 106
        Direct loan subsidy outlays:
    1340  Stafford..........................                                  41
    1340  Unsubsidized Stafford.............                                  12
    1340  PLUS..............................                                   4
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........                                  57
    ----------------------------------------------------------------------------

        Student loan administrative expense data:
    3510  Budget authority..................                                -218
    3590  Outlays...........................                                -113
    ---------------------------------------------------------------------------

    [[Page 437]]

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................                                  -3
    23.1  Rental payments to GSA............                                  -4
    23.3  Communications, utilities, and
            miscellaneous charges...........                                 -13
    24.0  Printing and reproduction.........                                  -8
    25.1  Advisory and assistance services..                                  -2
    25.2  Other services....................                                  -8
    25.3  Purchases of goods and services
            from Government accounts........                                  -3
    25.7  Operation and maintenance of
            equipment.......................                                -175
    26.0  Supplies and materials............                                  -1
    31.0  Equipment.........................                                  -1
    41.0  Grants, subsidies, and
            contributions...................                                 106
                                               ---------   ---------  ----------
    99.9    Total obligations...............                                -112
    ---------------------------------------------------------------------------

             Federal Direct Student Loan Program, Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct loans:

    01.01   Stafford........................       5,101       5,830       6,958
    01.02   Unsubsidized Stafford...........       2,557       3,083       3,765
    01.03   PLUS............................         771       1,025       1,314
    01.04   Consolidated....................         832       2,589       3,340
                                               ---------   ---------  ----------
    01.91     Subtotal, direct loans
                obligations.................       9,261      12,527      15,377
          Payment of origination services:

    02.01   Stafford........................           7           1           1
    02.02   Unsubsidized Stafford...........           4
    02.03   PLUS............................           1
    02.04   Consolidated....................           3           6           9
                                               ---------   ---------  ----------
    02.91   Subtotal, Payment of origination
              services......................          15           7          10
    04.01 Interest payment to Treasury......         750       1,035       1,717
    05.01 Payment of downward reestimate to
            program account.................                     304
                                               ---------   ---------  ----------
    10.00   Total obligations...............      10,026      13,873      17,104
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................                      24          24
    22.00 New financing authority (gross)...       9,507      13,570      17,104
    22.10 Resources available from
            recoveries of prior year
            obligations.....................       1,825         304
    22.70 Balance of authority to borrow
            withdrawn.......................      -1,282
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      10,050      13,898      17,128
    23.95 New obligations...................     -10,026     -13,873     -17,104
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          24          24          24
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..       9,024      12,140      14,775
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...       1,286       1,667       2,989
    68.47   Portion applied to debt
              reduction.....................        -803        -237        -660
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................         483       1,430       2,329
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................       9,507      13,570      17,104
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Unpaid
            obligations.....................       4,545       2,921       3,890
    73.10 New obligations...................      10,026      13,873      17,104
    73.20 Total financing disbursements
            (gross).........................      -9,824     -12,600     -16,260
    73.45 Adjustments in unexpired accounts.      -1,825        -304
    74.90 Unpaid obligations, end of year:
            Obligated balance: Unpaid
            obligations.....................       2,921       3,890       4,734
    87.00 Total financing disbursements
            (gross).........................       9,824      12,600      16,260
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
                Payments from subsidy
                  account:

    88.00         Stafford..................        -638        -780        -950
    88.00         Unsubsidized Stafford.....         332         301         261
    88.00         PLUS......................          62          68          83
    88.00         Consolidated..............           7          24           5
    88.00         Volume Reestimate.........          -3
    88.25     Interest on uninvested funds..        -402
              Non-Federal sources:
                Stafford loans:

    88.40         Repayment of principal,
                    Stafford................         -84        -109        -256
    88.40         Interest received on
                    loans, Stafford.........          -9        -158        -367
    88.40         Fees, Stafford............        -188        -221        -259
    88.40         Recoveries of defaults,
                    Stafford................                      -1          -4
                Unsubsidized Stafford loans:

    88.40         Repayment of principal,
                    Unsubsidized Stafford...         -51         -57        -146
    88.40         Interest received on
                    loans, Unsubsidized
                    Stafford................         -32         -83        -206
    88.40         Fees, Unsubsidized
                    Stafford................         -94        -116        -140
    88.40         Recoveries of defaults,
                    Unsubsidized Stafford...                      -1          -2
                PLUS loans:

    88.40         Repayment of principal,
                    PLUS....................         -57        -123        -214
    88.40         Interest received on
                    loans, PLUS.............         -45        -137        -218
    88.40         Fees, PLUS................         -35         -38         -48
    88.40         Recoveries of defaults,
                    PLUS....................                                  -1
                Consolidated:

    88.40         Payment of Principal,
                    Consolidated............         -22         -82        -194
    88.40         Interest received on
                    loans, Consolidated.....         -27        -154        -332
    88.40         Recoveries of defaults,
                    Consolidated............                                  -1
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,286      -1,667      -2,989
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............       8,221      11,903      14,115
    90.00 Financing disbursements...........       8,538      10,933      13,271
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       5,101       5,830       6,958
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       5,101       5,830       6,958
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       1,515       6,317      11,753
    1231  Disbursements: Direct loan
            disbursements...................       4,901       5,549       6,500
    1251  Repayments: Repayments and
            prepayments.....................         -84        -109        -261
    1261  Adjustments: Capitalized interest.           2
          Write-offs for default:

    1263    Direct loans....................
    1264    Other adjustments, net..........         -17          -4         -10
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       6,317      11,753      17,982
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       2,558       3,083       3,765
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       2,558       3,083       3,765
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         666       3,063       5,900
    1231  Disbursements: Direct loan
            disbursements...................       2,459       2,897       3,496
    1251  Repayments: Repayments and
            prepayments.....................         -51         -57        -147
    1261  Adjustments: Capitalized interest.          14
          Write-offs for default:

    1263    Direct loans....................
    1264    Other adjustments, net..........         -25          -3          -8
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       3,063       5,900       9,241
    ----------------------------------------------------------------------------

              PLUS
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................         771       1,025       1,314
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...         771       1,025       1,314
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         216         865       1,676
    1231  Disbursements: Direct loan
            disbursements...................         707         943       1,197
    1251  Repayments: Repayments and
            prepayments.....................         -57        -124        -215

    [[Page 438]]

          Write-offs for default:

    1263    Direct loans....................
    1264    Other adjustments, net..........          -1          -8         -14
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         865       1,676       2,644
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................         832       2,589       3,340
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...         832       2,589       3,340
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         296       1,320       3,824
    1231  Disbursements: Direct loan
            disbursements...................       1,033       2,589       3,340
    1251  Repayments: Repayments and
            prepayments.....................         -22         -82        -194
    1261  Adjustments: Capitalized interest.          13
          Write-offs for default:

    1263    Direct loans....................
    1264    Other adjustments, net..........                      -3          -8
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       1,320       3,824       6,962
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-0-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       4,913          2,921         3,890          4,733
          Net value of assets related to
              post-1991 direct loans
              receivable:

            Direct loans receivable, gross:
    1401      Stafford......................       1,558          6,310        11,725         17,882
    1401      Unsubsidized Stafford.........         708          3,044         5,885          9,192
    1401      PLUS..........................         225            861         1,662          2,607
    1401      Consolidated..................         310          1,304         3,817          6,945
            Interest receivable:
    1402      Interest receivable, Stafford.                          5             6              7
    1402      Interest receivable, Unsub
                Stafford....................                        114           138            167
    1402      Interest receivable, PLUS.....                          8            10             14
    1402      Interest receivable,
                Consolidated................                         25            73             94
    1405    Allowance for subsidy cost (-)..        -553           -655          -764         -1,404
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....       2,248         11,016        22,552         35,504
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       7,161         13,937        26,442         40,237
        LIABILITIES:
    2103  Federal liabilities: Debt.........       6,793         12,220        24,413         38,457
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       6,793         12,220        24,413         38,457
        NET POSITION:
    3100  Appropriated capital..............         368          1,717         2,029          1,780
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............         368          1,717         2,029          1,780
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       7,161         13,937        26,442         40,237
    -----------------------------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from Direct Loans. The amounts in this account are a means of
    financing and are not included in the budget totals.

              Federal Direct Student Loan Program Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-4-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    04.01 Interest payment to Treasury......                                  -3
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                  -3
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                                  -3
    23.95 New obligations...................                                   3
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..                                 -95
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...                                  95
    68.47   Portion applied to debt
              reduction.....................                                  -3
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................                                  92
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................                                  -3
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                  -3
    73.20 Total financing disbursements
            (gross).........................                                   3
    87.00 Total financing disbursements
            (gross).........................                                  -3
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
                Payments from subsidy
                  account:

    88.00         Stafford..................                                 -70
    88.00         Unsubsidized Stafford.....                                 -19
    88.00         PLUS......................                                  -6
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                 -95
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                                 -98
    90.00 Financing disbursements...........                                 -98
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-4-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1405    Allowance for subsidy cost (-)..                                                     -95
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....                                                     -95
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                                     -95
        LIABILITIES:
    2103  Federal liabilities: Debt.........                                                     -98
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                                                     -98
        NET POSITION:
    3100  Appropriated capital..............                                                       3
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                                       3
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                                     -95
    -----------------------------------------------------------------------------------------------

                  Federal Family Education Loan Program Account

        For Federal administrative expenses to carry out guaranteed student
    loans authorized by title IV, part B, of the Higher Education Act, as
    amended, [$46,572,000] $47,988,000. (Department of Education
    Appropriations Act, 1997.)
        Note.--The following tables display the program account which
    includes the subsidy costs and administrative expenses associated with
    guaranteed student loan commitments beginning in 1992.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Guaranteed loan subsidy:

    02.01   Stafford........................       2,244       2,106       1,992
    02.02   Unsubsidized Stafford...........         391         461         448
    02.03   PLUS............................          44          64          66
    02.05   Consolidated....................          13          30          33
    02.07   Upward reestimate (92 cohort)...         971         521
    02.08   Interest on reestimate..........          72          43
                                               ---------   ---------  ----------
    02.91     Subtotal, subsidy cost........       3,735       3,225       2,539

    [[Page 439]]

          Administrative expenses:

    07.01   Administrative expenses due to
              limitations...................          30          46          48
                                               ---------   ---------  ----------
    10.00   Total obligations...............       3,765       3,271       2,587
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       4,024       3,271       2,587
    22.10 Resources available from
            recoveries of prior year
            obligations.....................         206
    22.40 Capital transfer to general fund..        -465
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       3,765       3,271       2,587
    23.95 New obligations...................      -3,765      -3,271      -2,587
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation (Federal
              Administration)...............          30          46          48
          Permanent:

    60.05   Appropriation (indefinite)......       3,546         471       2,539
    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).         448       2,754
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       4,024       3,271       2,587
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation       1,002       1,065       1,219
    73.10 New obligations...................       3,765       3,271       2,587
    73.20 Total outlays (gross).............      -3,496      -3,117      -2,395
    73.45 Adjustments in unexpired accounts.        -206
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       1,065       1,219       1,411
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          25          31          34
    86.93 Outlays from current balances.....          16          10          10
    86.97 Outlays from new permanent
            authority.......................       2,694       2,754       1,407
    86.98 Outlays from permanent balances...         761         322         944
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       3,496       3,117       2,395
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -448      -2,754
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,576         517       2,587
    90.00 Outlays...........................       3,048         363       2,395
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................       3,576         517       2,587
      Outlays...........................       3,048         363       2,395
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                    -340        -461
      Outlays...........................                    -340        -263
                                        ------------------------------------
    Total:
      Budget Authority..................       3,576         177       2,126
      Outlays...........................       3,048          23       2,132
                                        ====================================

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Guaranteed loan levels supportable by subsidy
                    budget authority:
    2150  Stafford..........................      10,557      10,863      10,596
    2150  Unsubsidized Stafford.............       6,103       6,176       6,162
    2150  PLUS..............................       1,591       1,737       1,799
    2150  Consolidated......................       4,061       4,262       4,438
                                               ---------   ---------  ----------
    2159    Total loan guarantee levels.....      22,312      23,038      22,995
        Guaranteed loan subsidy (in percent):
    2320  Stafford..........................       23.26       19.38       18.80
    2320  Unsubsidized Stafford.............        7.09        7.47        7.27
    2320  PLUS..............................        3.14        3.70        3.65
    2320  Consolidated......................        0.33        0.70        0.75
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...       13.23       11.55       11.04
        Guaranteed loan subsidy budget authority:
    2330  Stafford..........................       2,455       2,106       1,992
    2330  Unsubsidized Stafford.............         433         461         448
    2330  PLUS..............................          50          64          66
    2330  Consolidated......................          13          30          33
    2330  Upward reestimate.................       1,043         564
    2330  Downward reestimate...............        -448      -2,754
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..       3,546         471       2,539
        Guaranteed loan subsidy outlays:
    2340  Stafford..........................       2,055       2,030       1,853
    2340  Unsubsidized Stafford.............         311         401         407
    2340  PLUS..............................          33          51          58
    2340  Consolidated......................          13          30          33
    2340  Upward reestimate.................       1,043         564
    2340  Downward reestimate...............        -448      -2,754
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........       3,007         322       2,351
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................          30          46          48
    3590  Outlays...........................          41          41          44
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this program
    account records for this program the subsidy costs associated with
    Federal Family Education Loans (FFEL), formerly guaranteed student loans
    (GSL), committed in 1992 and beyond, as well as certain administrative
    expenses of the program. Administrative expenses include discretionary
    expenses for salaries, expenses and overhead of employees working
    directly on the program. Beginning with the 1993 cohort, mandatory
    administrative costs, specifically contract collection costs and
    supplemental pre-claims assistance, are included in the FFEL subsidy
    estimates of each year's cohort. The subsidy amounts are estimated on a
    net present value basis.

        A description of the FFEL program and accompanying tables are
    included under the Federal Direct Student Loan program account.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          15          18          19
    11.3    Other than full-time permanent..           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          16          18          19
    12.1  Civilian personnel benefits.......           3           4           4
    21.0  Travel and transportation of
            persons.........................           1           1           1
    23.1  Rental payments to GSA............           2           2           2
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           5           1
    24.0  Printing and reproduction.........           1           1           2
    25.1  Advisory and assistance services..           1
    25.2  Other services....................                                   1
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    25.7  Operation and maintenance of
            equipment.......................           4          14          17
    41.0  Grants, subsidies, and
            contributions...................       3,735       3,225       2,539
                                               ---------   ---------  ----------
    99.9    Total obligations...............       3,765       3,271       2,587
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         330         368         368
    ---------------------------------------------------------------------------

                  Federal Family Education Loan Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-4-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Guaranteed loan subsidy:

    02.01   Stafford........................                                -393
    02.02   Unsubsidized Stafford...........                                 -39
    02.03   PLUS............................                                  -6
    02.05   Consolidated....................                                 -23
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                -461
    ----------------------------------------------------------------------------

    [[Page 440]]

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                -461
    23.95 New obligations...................                                 461
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.05 Appropriation (indefinite)........                    -340        -461
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............                     340
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................                                -461
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation
    73.10 New obligations...................                                -461
    73.20 Total outlays (gross).............                                 263
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                -198
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                     324        -263
    86.98 Outlays from permanent balances...                    -324
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........                                -263
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                    -340
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                    -340        -461
    90.00 Outlays...........................                    -340        -263
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-4-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Guaranteed loan subsidy (in percent):
    2320  Stafford..........................                    0.00       -3.71
    2320  Unsubsidized Stafford.............                    0.00       -0.64
    2320  PLUS..............................                    0.00       -0.33
    2320  Consolidated......................                    0.00       -0.53
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...                    0.00       -2.01
        Guaranteed loan subsidy budget authority:
    2330  Stafford..........................                                -393
    2330  Unsubsidized Stafford.............                                 -39
    2330  PLUS..............................                                  -6
    2330  Consolidated......................                                 -23
    2330  Downward reestimate...............                    -340
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..                    -340        -461
        Guaranteed loan subsidy outlays:
    2340  Stafford..........................                                -216
    2340  Unsubsidized Stafford.............                                 -21
    2340  PLUS..............................                                  -3
    2340  Consolidated......................                                 -23
    2340  Downward reestimate...............                    -340
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........                    -340        -263
    ---------------------------------------------------------------------------

        A description of the administration's proposed legislation to modify
    the Federal Family Education Loan program is included under the Federal
    Direct Student Loan program account.

            Federal Family Education Loan Program, Financing Account

        Note.--The financing account includes all cash flows to and from the
    government from guaranteed student loans committed after 1991.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits...............       2,262       1,846       1,698
    01.02   Special allowance...............         121
    01.03   Default claims..................         889       1,256       1,406
    01.04   Death, disability, and
              bankruptcy claims.............          77          67          83
    01.06   Supplemental preclaims
              assistance....................           9           5           6
    01.07   Contract collection costs.......           1           5           8
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......       3,359       3,179       3,201
          Unsubsidized Stafford loans:

    02.02   Special allowance...............           3
    02.03   Default claims..................         105         343         519
    02.04   Death, disability, and
              bankruptcy claims.............           7          26          42
    02.06   Supplemental preclaims
              assistance....................           1           1           2
    02.07   Contract collection costs.......                       1           2
                                               ---------   ---------  ----------
    02.91     Subtotal, Unsubsidized
                Stafford loans..............         116         371         565
          PLUS loans:

    03.02   Special Allowance...............           1
    03.03   Default claims..................          80         110         121
    03.04   Death, disability, and
              bankruptcy claims.............          19          38          41
    03.05   Supplemental preclaims
              assistance....................           1                       1
    03.06   Contract Collection Costs.......                       1           1
                                               ---------   ---------  ----------
    03.91     Subtotal, PLUS loans..........         101         149         164
          SLS loans:

    04.03   Default claims..................         239         199         165
    04.04   Death, disability and bankruptcy
              claims........................           2          14          14
    04.06   Supplemental preclaims
              assistance....................           2           1           1
    04.07   Contract collection costs.......           2           1           2
                                               ---------   ---------  ----------
    04.91     Subtotal, SLS loans...........         245         215         182
          Consolidations loans:

    05.01   Interest benefits...............           1
    05.03   Default claims..................         115         172         241
    05.04   Death, disability, and
              bankruptcy claims.............           6          35          45
    05.06   Supplemental preclaims
              assistance....................           1           1           1
    05.07   Contract Collection Costs.......                                   1
                                               ---------   ---------  ----------
    05.91     Subtotal, Consolidations loans         123         208         288
    07.01 Interest paid to Treasury.........          83          50          26
    08.01 Payment of downard reestimate to
            Program account.................         448       2,340
    09.01 Interest on downward reestimate...                     414
                                               ---------   ---------  ----------
    10.00   Total obligations...............       4,475       6,926       4,426
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....       7,559       9,146       6,669
    22.00 New financing authority (gross)...       5,807       4,449       3,880
    22.10 Resources available from
            recoveries of prior year
            obligations.....................         256
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      13,622      13,595      10,549
    23.95 New obligations...................      -4,475      -6,926      -4,426
    24.90 Unobligated balance available, end
            of year: Fund balance...........       9,146       6,669       6,123
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...       6,261       4,775       4,117
    68.47   Portion applied to debt
              reduction.....................        -454        -326        -237
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................       5,807       4,449       3,880
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................       5,807       4,449       3,880
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Obligated
            balance.........................          21        -886       1,039
    73.10 New obligations...................       4,475       6,926       4,426
    73.20 Total financing disbursements
            (gross).........................      -5,126      -5,000      -4,800
    73.45 Adjustments in unexpired accounts.        -256
    74.90 Unpaid obligations, end of year:
            Obligated balance: Obligated
            balance.........................        -886       1,039         664
    87.00 Total financing disbursements
            (gross).........................       5,126       5,000       4,800
    ----------------------------------------------------------------------------

    [[Page 441]]

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
                Payment from subsidy
                  account:

    88.00         Stafford loans............      -2,244      -1,915      -1,813
    88.00         Unsubsidized Stafford.....        -390        -414        -402
    88.00         PLUS loans................         -44         -57         -58
    88.00         Consolidated loans........         -13         -30         -33
    88.00         Upward reestimate.........      -1,043        -564
    88.00         Scheduled payments from
                    Liquidating account for
                    noncontractual
                    modifications...........        -538        -376        -263
    88.25     Interest on uninvested funds:
                Stafford loans..............        -514        -462        -438
              Non-Federal sources:
                Stafford loans:

    88.40         Recoveries on defaults....        -425        -123        -190
    88.40         Origination fees..........        -420        -342        -341
    88.40         Sallie Mae offset fees....         -53         -28         -29
    88.40         Other Fees................         -15
    88.40         Recoveries on defaults....         -76         -16         -35
                Unsubsidized Stafford:

    88.40         Origination fees..........        -208        -191        -194
    88.40         Other Fees................          -4
    88.40         Recoveries on defaults....         -40         -15         -22
                PLUS:

    88.40         Origination fees..........         -52         -52         -55
    88.40         Other Fees................          -1
    88.40         Recoveries on defaults....         -79         -29         -39
                SLS:

    88.40         Other Fees................          -1
    88.40         Recoveries on defaults....         -27         -11         -21
    88.40         Origination fees..........          -8         -21         -22
                Consolidated:

    88.40         Consolidated Loan Holders
                    Fee.....................         -66        -129        -162
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -6,261      -4,775      -4,117
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............        -454        -326        -237
    90.00 Financing disbursements...........      -1,134         225         683
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        STAFFORD
          Position with respect to appropriations act
              limitation on commitments:

    2131  Guaranteed loan commitments exempt
            from limitation.................      10,557      10,863      10,596
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      10,557      10,863      10,596
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      37,830      44,316      49,598
    2231  Disbursements of new guaranteed
            loans...........................       9,752       9,779       9,738
    2251  Repayments and prepayments........      -2,076      -3,188      -4,359
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....      -1,113      -1,242      -1,431
    2263    Terminations for default that
              result in claim payments......         -77         -67         -83
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      44,316      49,598      53,463
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      44,316      49,598      53,463
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......         955       1,643       2,747
    2331    Disbursements for guaranteed
              loan claims...................       1,113       1,242       1,431
    2351    Repayments of loans receivable..        -425        -123        -190
    2361    Write-offs of loans receivable..                     -15         -23
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       1,643       2,747       3,965
    ----------------------------------------------------------------------------

        UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       6,102       6,176       6,162
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       6,102       6,176       6,162
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       7,210      11,180      15,643
    2231  Disbursements of new guaranteed
            loans...........................       4,374       5,469       5,536
    2251  Repayments and prepayments........        -273        -662      -1,183
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -124        -318        -510
    2263    Terminations for default that
              result in claim payments......          -7         -26         -42
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      11,180      15,643      19,444
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      11,180      15,643      19,444
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......          45          93         393
    2331    Disbursements for guaranteed
              loan claims...................         124         318         510
    2351    Repayments of loans receivable..         -76         -16         -35
    2361    Write-offs of loans receivable..                      -2          -4
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......          93         393         864
    ----------------------------------------------------------------------------

        PLUS
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       1,591       1,737       1,799
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       1,591       1,737       1,799
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       3,629       4,261       4,837
    2231  Disbursements of new guaranteed
            loans...........................       1,337       1,486       1,578
    2251  Repayments and prepayments........        -579        -763        -962
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -107        -109        -123
    2263    Terminations for default that
              result in claim payments......         -19         -38         -41
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       4,261       4,837       5,289
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       4,261       4,837       5,289
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......         174         241         333
    2331    Disbursements for guaranteed
              loan claims...................         107         109         123
    2351    Repayments of loans receivable..         -40         -15         -21
    2361    Write-offs of loans receivable..                      -2          -3
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         241         333         432
    ----------------------------------------------------------------------------

        SLS
        Position with respect to appropriations act
                    limitation on commitments:
    2111  Limitation on guaranteed loans
            made by private lenders.........
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       6,061       5,290       4,504
    2251  Repayments and prepayments........        -454        -560        -641
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -316        -212        -176
    2263    Terminations for default that
              result in claim payments......          -1         -14         -14
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       5,290       4,504       3,673
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       5,290       4,504       3,673
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......         479         715         895
    2331    Disbursements for guaranteed
              loan claims...................         316         212         176

    [[Page 442]]

    2351    Repayments of loans receivable..         -79         -29         -39
    2361    Write-offs of loans receivable..          -1          -3          -5
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         715         895       1,027
    ----------------------------------------------------------------------------

        CONSOLIDATED
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       4,061       4,262       4,438
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       4,061       4,262       4,438
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       2,827       6,501       9,635
    2231  Disbursements of new guaranteed
            loans...........................       4,353       4,214       4,389
    2251  Repayments and prepayments........        -543        -876      -1,246
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -129        -169        -239
    2263    Terminations for default that
              result in claim payments......          -7         -35         -45
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       6,501       9,635      12,494
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       6,501       9,635      12,494
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......          23         125         282
    2331    Disbursements for guaranteed
              loan claims...................         129         169         239
    2351    Repayments of loans receivable..         -27         -11         -21
    2361    Write-offs of loans receivable..                      -1          -3
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         125         282         497
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-0-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       7,559          9,146         6,303          5,746
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1501    Defaulted guaranteed loans
              receivable, gross.............       1,676          2,817         4,650          6,785
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............       1,676          2,817         4,650          6,785
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1701    Defaulted guaranteed loans,
              gross.........................      -3,507         12,151        11,236          9,448
    1704    Defaulted guaranteed loans and
              interest receivable, net......      -3,507         12,151        11,236          9,448
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       5,728         24,114        22,189         21,979
        LIABILITIES:
    2103  Federal liabilities: Debt.........       1,605          1,134           680            354
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,605          1,134           680            354
        NET POSITION:
    3100  Appropriated capital..............       4,123         22,980        21,509         21,626
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       4,123         22,980        21,509         21,626
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       5,728         24,114        22,189         21,980
    -----------------------------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this
    nonbudgetary account records all cash flows to and from the Government
    resulting from guaranteed student loans committed in 1992 and beyond.
    The amounts in this account are a means of financing and are not
    included in the budget totals.

                 Federal Family Education Loan Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-4-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits...............                                 -51
    01.06   Supplemental preclaims
              assistance....................                                  -6
    01.07   Contract collection costs.......                                   1
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......                                 -56
          Unsubsidized Stafford loans:

    02.06   Supplemental preclaims
              assistance....................                                  -2
          PLUS loans:

    03.03   Default claims..................                                  -1
    03.04   Death, disability, and
              bankruptcy claims.............                                  -1
                                               ---------   ---------  ----------
    03.91     Subtotal, PLUS loans..........                                  -2
          SLS loans:

    04.06   Supplemental preclaims
              assistance....................                                  -1
          Consolidations loans:

    05.04   Death, disability, and
              bankruptcy claims.............                                  -1
    05.06   Supplemental preclaims
              assistance....................                                  -1
                                               ---------   ---------  ----------
    05.91     Subtotal, Consolidations loans                                  -2
    08.01 Payment of downard reestimate to
            Program account.................                     342
                                               ---------   ---------  ----------
    10.00   Total obligations...............                     342         -63
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....                                -369
    22.00 New financing authority (gross)...                     -27        -446
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......                     -27        -815
    23.95 New obligations...................                    -342          63
    24.90 Unobligated balance available, end
            of year: Fund balance...........                    -369        -752
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                     -27        -446
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Obligated
            balance.........................                                  52
    73.10 New obligations...................                     342         -63
    73.20 Total financing disbursements
            (gross).........................                    -290           2
    74.90 Unpaid obligations, end of year:
            Obligated balance: Obligated
            balance.........................                      52          -9
    87.00 Total financing disbursements
            (gross).........................                     290          -2
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
                Payment from subsidy
                  account:

    88.00         Stafford loans............                                 357
    88.00         Unsubsidized Stafford.....                                  35
    88.00         PLUS loans................                                   5
    88.00         Consolidated loans........                                  23
    88.25     Interest on uninvested funds:
                Stafford loans..............                      27          68
              Non-Federal sources:
                Stafford loans:

    88.40         Recoveries on defaults....                                 -20
    88.40         Sallie Mae offset fees....                                 -13
    88.40         Recoveries on defaults....                                  -3
    88.40         Recoveries on defaults....                                  -2
    88.40         Recoveries on defaults....                                  -4
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                      27         446
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........                     317         444
    ---------------------------------------------------------------------------

    [[Page 443]]

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-4-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........
    2251  Repayments and prepayments........                                   3
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........                                   3
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..                                   3
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......
    2351    Repayments of loans receivable..                                 -20
    2361    Write-offs of loans receivable..                                  -2
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......                                 -22
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........
    2251  Repayments and prepayments........                                   2
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........                                   2
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..                                   2
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......
    2351    Repayments of loans receivable..                                  -3
    2361    Write-offs of loans receivable..                                  -1
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......                                  -4
    ----------------------------------------------------------------------------

              PLUS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........
    2251  Repayments and prepayments........                                  10
    2263  Adjustments: Terminations for
            default that result in claim
            payments........................                                   1
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........                                  11
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..                                  11
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......
    2351    Repayments of loans receivable..                                  -1
    2361    Write-offs of loans receivable..                                  -2
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......                                  -3
    ----------------------------------------------------------------------------

              SLS
        Position with respect to appropriations act
                    limitation on commitments:
    2111  Limitation on guaranteed loans
            made by private lenders.........
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........
    2251  Repayments and prepayments........                                 152
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........                                 152
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..                                 152
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......
    2351    Repayments of loans receivable..                                  -4
    2361    Write-offs of loans receivable..                                  -1
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......                                  -5
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........
    2251  Repayments and prepayments........                                  33
    2263  Adjustments: Terminations for
            default that result in claim
            payments........................                                   1
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........                                  34
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..                                  34
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-4-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                                     -369           -752
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1501    Defaulted guaranteed loans
              receivable, gross.............                                                     -34
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............                                                     -34
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                     -369           -786
        NET POSITION:
    3100  Appropriated capital..............                                     -369           -786
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                     -369           -786
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                     -369           -786
    -----------------------------------------------------------------------------------------------

                Federal Family Education Loan Liquidating Account

        Note.--The following tables display the liquidating account, which
    includes all cash flows to and from the Government from guaranteed
    student loan commitments prior to 1992.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits, net of
              origination fees..............         260         128          64
    01.02   Special allowance net of
              origination fees..............         254         101          48
    01.03   Default claims..................       1,091         767         539
    01.04   Death, disability, and
              bankruptcy claims.............         106          74          32
    01.06   Supplemental preclaims
              assistance....................          28          14           7
    01.07   Contract collection costs.......         136          78          68
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......       1,875       1,162         758
          PLUS/SLS loans:

    02.01   Default claims..................          56          30          16
    02.02   Death, disability, and
              bankruptcy claims.............           5           7           4
    02.04   Supplemental preclaims
              assistance....................           1           1
    02.05   Contract collection costs.......           7          18          20
                                               ---------   ---------  ----------
    02.91     Subtotal, PLUS/SLS loans......          69          56          40
          Miscellaneous costs:

    03.01   Scheduled payments to finance
              account for non-contractual
              modifications.................         538         376         263
                                               ---------   ---------  ----------
    10.00   Total obligations...............       2,482       1,594       1,061
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       2,772       1,608       1,554
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          34
    22.40 Capital transfer to general fund..        -324         -14        -493
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,482       1,594       1,061

    [[Page 444]]

    23.95 New obligations...................      -2,482      -1,594      -1,061
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.05 Appropriation (indefinite)........       1,153
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............       1,619       1,608       1,554
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       2,772       1,608       1,554
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          48         261         239
    73.10 New obligations...................       2,482       1,594       1,061
    73.20 Total outlays (gross).............      -2,234      -1,614      -1,140
    73.45 Adjustments in unexpired accounts.         -34
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         261         239         159
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................       2,186       1,353         901
    86.98 Outlays from permanent balances...          48         261         239
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,234       1,614       1,140
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
                Stafford loans:

    88.40         Federal collections on
                    defaulted loans.........        -475        -472        -456
    88.40         Federal collections on
                    bankruptcies............         -23         -23         -23
    88.40         Offsets against Federal
                    tax refunds.............        -317        -315        -304
                Other collections:

    88.40         Reimbursements from
                    guaranty agencies.......        -583        -577        -559
    88.40         Federal collections on
                    defaulted loans.........         -75         -75         -72
    88.40         Federal collections on
                    bankruptcies............          -4          -4          -3
    88.40         Offsets against Federal
                    tax refunds.............         -50         -50         -48
    88.40         Reimbursements from
                    guaranty agencies.......         -92         -92         -89
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,619      -1,608      -1,554
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,153
    90.00 Outlays...........................         616           6        -414
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
              STAFFORD LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      26,846      26,412      20,540
    2251  Repayments and prepayments........      -9,110      -5,002      -4,536
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....      -1,076        -810        -569
    2263    Terminations for default that
              result in claim payments......        -106         -60         -30
    2264    Other adjustments, net..........       9,858
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      26,412      20,540      15,405
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      26,412      20,540      15,405
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......      10,013       9,868       9,185
    2331    Disbursements for guaranteed
              loan claims...................       1,365         810         569
    2351    Repayments of loans receivable..      -1,395      -1,398      -1,359
    2361    Write-offs of loans receivable..         -11         -11         -11
    2364    Other adjustments, net..........        -104         -84         -65
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       9,868       9,185       8,319
    ----------------------------------------------------------------------------

              PLUS/SLS LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       2,727       3,914       3,043
    2251  Repayments and prepayments........        -964        -831      -1,691
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -56         -33         -18
    2263    Terminations for default that
              result in claim payments......          -5          -7          -3
    2264    Other adjustments, net..........       2,212
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       3,914       3,043       1,331
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       3,914       3,043       1,331
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......       3,166       2,991       2,611
    2331    Disbursements for guaranteed
              loan claims...................          68          33          18
    2351    Repayments of loans receivable..        -222        -208        -193
    2361    Write-offs of loans receivable..          -3        -190        -187
    2364    Other adjustments, net..........         -18         -15         -12
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       2,991       2,611       2,237
    ---------------------------------------------------------------------------
        \1\ Excludes interest and premium collections on insured loans.

        As required by the Federal Credit Reform Act of 1990, this
    liquidating account records, for this program, all cash flows to and
    from the Government resulting from guaranteed student loans committed
    prior to 1992. This account is shown on a cash basis. All new loan
    activity in this program in 1992 and beyond is recorded in corresponding
    program and financing accounts.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................         142          96          88
    33.0  Investments and loans.............       1,147         796         555
    41.0  Grants, subsidies, and
            contributions...................       1,081         620         382
    42.0  Insurance claims and indemnities..         112          82          36
                                               ---------   ---------  ----------
    99.9    Total obligations...............       2,482       1,594       1,061
    ---------------------------------------------------------------------------

              College Housing and Academic Facilities Loans Program

        [For administrative expenses to carry out the existing direct loan
    program of college housing and academic facilities loans entered into
    pursuant to title VII, part C, of the Higher Education Act, as amended,
    $698,000.]
        For Federal administrative expenses to carry out activities related
    to facility loans entered into under title VII, part C and section 702
    of the Higher Education Act, as amended, $1,069,000. (Department of
    Education Appropriations Act, 1997.)

      Historically Black College and University Capital Financing Program
                                     Account

        The total amount of bonds insured pursuant to section 724 of title
    VII, part B of the Higher Education Act shall not exceed $357,000,000,
    and the cost, as defined in section 502 of the Congressional Budget Act
    of 1974, of such bonds shall not exceed zero.
        For administrative expenses to carry out the Historically Black
    College and University Capital Financing Program entered into pursuant
    to title VII, part B of the Higher Education Act, as amended, $104,000.
    (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Federal administration............           1           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............           1           1           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           1           1           1

    [[Page 445]]

    22.10 Resources available from
            recoveries of prior year
            obligations.....................           2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           3           1           1
    23.95 New obligations...................          -1          -1          -1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation (Federal
            administration).................           1           1           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.           8           5           4
    73.10 New obligations...................           1           1           1
    73.20 Total outlays (gross).............          -2          -2          -2
    73.45 Adjustments in unexpired accounts.          -2
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.           5           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           1           1           1
    86.93 Outlays from current balances.....           1           1           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           2           2           2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           1           1           1
    90.00 Outlays...........................           2           2           2
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct loan subsidy outlays:
    1340  Subsidy outlays...................           1           1
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................           1           1           1
    3590  Outlays from new authority........           1           1           1
    ---------------------------------------------------------------------------

        The College Housing and Academic Facilities Loan (CHAFL) Program
    account and the Historically Black College and University (HBCU) Capital
    Financing Program account are consolidated for presentation purposes.
    The College Housing and Academic Facilities Loans and Historically Black
    College and University Capital Financing programs will continue to be
    administered separately.

        The College Housing and Academic Facilities Loans Program.--The
    Department began issuing CHAFL facility loans in 1987 and made its last
    awards in 1993. Prior to 1987, loans were made under two separate loan
    programs: Higher Education and Facilities Loans (HEFL) and College
    Housing Loans (CHL). The loans support financing for the reconstruction,
    renovation, and construction of academic facilities, housing and other
    postsecondary education facilities for students and faculty. Although
    the Department no longer makes new loans, the Department continues to be
    responsible for conducting architectural and engineering reviews before
    disbursing payments to institutions and servicing the outstanding loans
    under an agreement with the Federal Reserve Bank.

        In prior years, funding for CHAFL administration was in this
    account, and funding for CHL and HEFL administration was split between
    the Department's Program Administration account and the liquidating
    accounts for these two programs. In fiscal year 1998, the Department
    plans to consolidate funding for administrative activities for CHAFL,
    HEFL and CHL under a single account. The FY 1998 request includes
    funding for personnel, loan servicing, and architectural and engineering
    services.

        Historically Black College and University Capital Financing
    Program.--The Historically Black College and University (HBCU) Capital
    Financing Program provides HBCUs with private capital for capital
    projects such as repairs, renovation and construction of classrooms,
    libraries, laboratories, dormitories, instructional equipment, and
    research instrumentation. The 1994 appropriation granted the Department
    authority to enter into insurance agreements with a private for-profit
    Designated Bonding Authority to guarantee no more than $357,000,000 loan
    principal plus accrued unpaid interest for taxable bonds. The bonding
    authority issues the bonds and maintains an escrow account in which 10
    percent of each institution's principal is deposited. This amount is
    estimated to be sufficient to cover all potential delinquencies and
    defaults.

        The first loan was issued in 1996 for $3.5 million, and additional
    loans are expected in 1997 and 1998. No subsidy appropriations are
    required. The 1998 budget requests funds for continuing Federal
    administrative activities only.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.3  Direct obligations: Purchases of
            goods and services from
            Government accounts.............                                   1
    99.5  Below reporting threshold.........           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............           1           1           1
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......           8           7           9
    ---------------------------------------------------------------------------

         College Housing and Academic Facilities Loans Financing Account

        Note.--The financing account includes all cash flows to and from the
    Government from college housing and academic facilities loans committed
    after 1991.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4252-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Interest paid to Treasury.........           1           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............           1           1           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...           1                       1
    23.95 New obligations...................          -1          -1          -1
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...           2           1           1
    68.10   Change in orders on hand from
              Federal sources...............          -4          -1
    68.15   Adjustment to orders on hand
              from Federal sources..........           2
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................                                   1
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................                                   1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.90   Obligated balance: Authority to
              Borrow........................          38          22          16
    72.95   Obligate balance: Subsidy.......           8           4           3
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............          46          26          19
    73.10 New obligations...................           1           1           1
    73.20 Total financing disbursements
            (gross).........................          -9          -8          -4
    73.40 Adjustments in expired accounts...         -12
          Unpaid obligations, end of year:

    74.90   Obligated balance: Obligated
              balance.......................          22          16          14
    74.95   Receivables from program account           4           3           3
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................          26          19          17
    87.00 Total financing disbursements
            (gross).........................           9           8           4
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Principal repayments..........          -1
    88.25     Interest on uninvested funds..          -1

    [[Page 446]]

    88.40     Interest repayments...........                      -1          -1
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -2          -1          -1
    88.95 Change in receivables from program
            accounts........................           4           1
    88.96 Adjustment to orders on hand from
            Federal sources.................          -2
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............           1
    90.00 Financing disbursements...........           7           7           3
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4252-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           6          13          19
    1231  Disbursements: Direct loan
            disbursements...................           7           6           3
    1251  Repayments: Repayments and
            prepayments.....................
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          13          19          22
    ---------------------------------------------------------------------------

        The reestimate of the subsidy from prior year obligations may
    require the Department to exercise its permanent indefinite authority to
    borrow funds to cover outstanding Treasury interest expenses due on
    September 30, 1998.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4252-0-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1106    Federal assets: Receivables, net           9              8             4              3
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..           5             11            19             22
    1402    Interest receivable.............                                        1              1
    1405    Allowance for subsidy cost (-)..          -2             -4            -1
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....           3              7            19             23
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          12             15            23             26
        LIABILITIES:
          Federal liabilities:

    2102    Interest payable................           1              1             1              1
    2103    Debt............................           5             11            20             27
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           6             12            21             28
        NET POSITION:
    3100  Appropriated capital..............           6              3             2             -2
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           6              3             2             -2
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          12             15            23             26
    -----------------------------------------------------------------------------------------------

        College Housing and Academic Facilities Loans Liquidating Account

                       [Higher Education Facilities Loans]

        [The Secretary is hereby authorized to make such expenditures,
    within the limits of funds available under this heading and in accord
    with law, and to make such contracts and commitments without regard to
    fiscal year limitation, as provided by section 104 of the Government
    Corporation Control Act (31 U.S.C. 9104), as may be necessary in
    carrying out the program for the current fiscal year.] (Department of
    Education Appropriations Act, 1997.)

                             [College Housing Loans]

        [Pursuant to title VII, part C of the Higher Education Act, as
    amended, for necessary expenses of the college housing loans program,
    the Secretary shall make expenditures and enter into contracts without
    regard to fiscal year limitation using loan repayments and other
    resources available to this account. Any unobligated balances becoming
    available from fixed fees paid into this account pursuant to 12 U.S.C.
    1749d, relating to payment of costs for inspections and site visits,
    shall be available for the operating expenses of this account.]
    (Department of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            43.0)...........................          33          25          24
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          41          41          50
    22.00 New budget authority (gross)......          36          29          27
    22.10 Resources available from
            recoveries of prior year
            obligations.....................                      10
    22.60 Redemption of debt................          -3          -5          -3
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          74          75          74
    23.95 New obligations...................         -33         -25         -24
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          41          50          51
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.05 Appropriation (indefinite)........           6           3           3
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...          76          59          59
    68.27   Capital transfer to general fund          -4          -3          -3
    68.47   Portion applied to debt
              reduction.....................         -42         -30         -32
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................          30          26          24
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          36          29          27
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          43          46          31
    73.10 New obligations...................          33          25          24
    73.20 Total outlays (gross).............         -30         -30         -27
    73.45 Adjustments in unexpired accounts.                     -10
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          46          31          28
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          30          23          23
    86.98 Outlays from permanent balances...                       7           4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          30          30          27
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of principal.....         -50         -39         -39
    88.40       Interest received on loans..         -26         -20         -20
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -76         -59         -59
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         -40         -30         -32
    90.00 Outlays...........................         -45         -29         -32
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
              CHAFL LIQUIDATING
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         144         152         148
    1231  Disbursements: Direct loan
            disbursements...................          13
    1251  Repayments: Repayments and
            prepayments.....................          -5          -4          -3
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         152         148         145
    ----------------------------------------------------------------------------

    [[Page 447]]

              HIGHER EDUCATION FACILITIES
                  LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          54          48          42
    1251  Repayments: Repayments and
            prepayments.....................          -6          -6          -6
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          48          42          36
    ----------------------------------------------------------------------------

              COLLEGE HOUSING LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         484         446         415
    1251  Repayments: Repayments and
            prepayments.....................         -38         -31         -31
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         446         415         384
    ---------------------------------------------------------------------------

        The College Housing and Academic Facilities Loans Liquidating
    Account records all cash flows to and from the Government resulting from
    direct loans made prior to 1992 to schools and colleges for the
    reconstruction, renovation, and construction of academic facilities,
    housing and other postsecondary education facilities. Loans were made
    under three separate loan programs: Higher Education and Facilities
    Loans, College Housing Loans, and College Housing and Academic
    Facilities Loans. In 1998, the Department is consolidating the three
    loan programs into the CHAFL Liquidating account for budget presentation
    purposes only. The three individual programs will continue to be
    administered separately.

     Historically Black College and University Capital Financing, Financing
                                     Account

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4254-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on commitments:
    2111  Limitation on guaranteed loans
            made by private lenders.........
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........                                  10
    2231  Disbursements of new guaranteed
            loans...........................                      10          15
    2251  Repayments and prepayments........
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........                      10          25
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..                      10          25
    ---------------------------------------------------------------------------
        Note.--The appropriations language for this program specifies a
    limitation that applies to direct and guaranteed loans in total.

        In FY 1997, the Federal Financing Bank (FFB) began purchasing bonds
    issued by the HBCU Designated Bonding Authority. Under the policies
    governing Federal credit programs, loan guarantees by the FFB create the
    equivalent of a Federal direct loan. For budget purposes, all FFB loans
    shall be treated as direct loans. HBCU bonds are still available for
    purchase by the private sector, and these will be treated as loan
    guarantees. The Department expects some future loans may be financed
    from private sources.

                 OFFICE OF EDUCATIONAL RESEARCH AND IMPROVEMENT

                                  Federal Funds

    General and special funds:

                 Education Research, Statistics, and Improvement

        For carrying out activities authorized by the Educational Research,
    Development, Dissemination, and Improvement Act of 1994, including part
    E; the National Education Statistics Act of 1994; section 2102, sections
    [3132,] 3136 and 3141, parts B, C, and D of title III and parts A, B,
    and I, [and K] and section 10601 of title X, and part C of title XIII of
    the Elementary and Secondary Education Act of 1965, as amended, and
    title VI of Public Law 103-227, $510,693,000 [$598,350,000: Provided,
    That $200,000,000 shall be for section 3132, $56,965,000 shall be for
    section 3136 and $10,000,000 shall be for section 3141 of the Elementary
    and Secondary Education Act: Provided further, That notwithstanding any
    other provision of law, one-half of one percent of the amount available
    for section 3132 of the Elementary and Secondary Education Act of 1965,
    as amended, shall be set aside for the outlying areas to be distributed
    among the outlying areas on the basis of their relative need as
    determined by the Secretary in accordance with the purposes of the
    program: Provided further, That, notwithstanding section 3131(b) of said
    Act, if any State educational agency does not apply for a grant under
    section 3132, that State's allotment under section 3131 shall be
    reserved by the Secretary for grants to local educational agencies in
    the State that apply directly to the Secretary according to the terms
    and conditions announced by the Secretary in the Federal Register:
    Provided further, That, of the amount available for title III, part B of
    the Elementary and Secondary Education Act of 1965, as amended, funds
    shall be awarded to continue the Iowa Communication Network statewide
    fiber optic demonstration and $2,000,000 shall be awarded to the
    Southeastern Pennsylvania Consortium for Higher Education for the
    establishment of local and wide area computer networks to provide
    instructional resources to students and faculty: Provided further, That
    none of the funds appropriated in this paragraph may be obligated or
    expended for the Goals 2000 Community Partnerships Program]. (Department
    of Education Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-999      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Research, development and
                dissemination:
    00.01     National education research
                institutes..................          43          54          62
    00.02     Regional educational
                laboratories................          51          51          54
    00.03     National dissemination
                activities..................          13          19          19
    00.04   Statistics......................          46          50          66
    00.05   Assessment......................          33          33          38
    00.06   Eisenhower professional
              development national
              activities....................          18          13          30
            Educational technology:
              Technology for education:
    00.07       Technology literacy
                  challenge fund............                     200
    00.08       Technology innovation
                  challenge grants..........          38          57          75
    00.09       Regional technology in
                  education consortia.......          10          10          10
    00.10     Star schools..................          23          30          26
    00.11     Ready to learn television.....           6           7           7
    00.12     Telecommunications
                demonstration project for
                mathematics.................           1           1           2
    00.13   Fund for the improvement of
              education.....................          38          40          40
    00.14   Javits gifted and talented
              education.....................           3           5           7
    00.15   Eisenhower regional mathematics
              and science education
              consortia.....................          15          15          15
    00.16   After-school learning centers...           1           1          50
    00.17   National writing project........           3           3
    00.18   Civic education.................           4           4           5
    00.19   International education exchange           5           5           5
                                               ---------   ---------  ----------
    00.91     Subtotal, direct program......         351         598         511
    02.01 Reimbursable program..............           2
                                               ---------   ---------  ----------
    10.00   Total obligations...............         353         598         511
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         353         598         511
    23.95 New obligations...................        -353        -598        -511
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         351         598         511
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         353         598         511
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         322         358         543
    73.10 New obligations...................         353         598         511
    73.20 Total outlays (gross).............        -313        -412        -551
    73.40 Adjustments in expired accounts...          -4
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         358         543         503
    ----------------------------------------------------------------------------

    [[Page 448]]

        Outlays (gross), detail:
    86.90 Outlays from new current authority          82         130         129
    86.93 Outlays from current balances.....         229         281         422
    86.98 Outlays from permanent balances...           2           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         313         412         551
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         351         598         511
    90.00 Outlays...........................         311         412         551
    ---------------------------------------------------------------------------
        Note.--Excludes $425 million in budget authority in 1998 for activities
    transferred to the Office of Elementary and Secondary Education, Education
    Reform Account. The comparable amount for 1997 was $200 million (included
    above) and zero in 1996, since the program was first funded in 1997.

        Research, development, and dissemination.--
            National research institutes.--Funds support the activities of
        five research institutes organized to address topics of national
        concern in education. The institutes carry out comprehensive
        programs of research and development by funding research centers,
        field-initiated research studies, and other research projects.
            Regional educational laboratories.--Ten laboratories provide
        applied research and development, dissemination, and technical
        assistance services to address needs in specified regions throughout
        the country.
            National dissemination activities.--Funds support information
        clearinghouses, a national dissemination system, and a national
        library of education, which serves as a central location within the
        Federal government for information on education.

        Statistics.--Funds support the collection of statistics on
    educational institutions and on individuals to monitor trends in
    education, and a coordinated program of statistical services to assist
    States in developing comparable data bases and analyses of the
    implications of data.

        Assessment.--Funds support the National Assessment of Educational
    Progress, which surveys young Americans to provide reliable information
    about educational attainment in important skill areas. Both national-
    and State-representative data are collected.

        Eisenhower professional development national activities.--Funds
    support activities to promote excellence in teaching. Such activities
    include strengthening professional standards for teachers, demonstrating
    ways to engage teachers and other educators in the use of effective
    teaching and learning strategies, providing support services for both
    Eisenhower State and Federal program activities, and evaluating these
    activities.

        Technology for education.--
            Technology innovation challenge grants.--Competitive grants are
        made to consortia of school districts and other partners to improve
        teaching and learning through the effective use of technologies.
            Regional technology in education consortia.--Funds support
        technical assistance in the development and implementation of
        educational technology.

        Star schools.--Funds support the acquisition of telecommunications
    equipment and development of instructional programming for distance
    learning.

        Ready to learn television.--Funds support the development of
    educational programming for preschool and elementary school children and
    their parents.

        Telecommunications demonstration project for mathematics.--Funds
    support a national telecommunications-based demonstration project to
    improve the teaching of mathematics so that all students are prepared to
    achieve State content standards.

        Fund for the improvement of education.--Funds support nationally
    significant projects to improve the quality of education, assist all
    students to meet challenging standards, contribute to achievement of the
    National Education Goals and support the Christa McAuliffe Fellowships.

        Javits gifted and talented education.--Funds support projects
    designed to help educators identify and meet the special educational
    needs of gifted and talented students and, where appropriate, to adapt
    strategies successful with those students to improve instruction for all
    students.

        Eisenhower regional mathematics and science education consortia.--
    Funds support regional consortia to disseminate exemplary mathematics
    and science education materials and provide technical assistance to help
    teachers and administrators implement new teaching methods and
    assessment tools.

        After-school learning centers.--Funds support school-based after-
    school tutoring and other educational and violence prevention services
    to members of the community.

        Civic education.--Funds are used to provide an award to the Center
    for Civic Education to help educate students about the history and
    principles of the Constitution, including the Bill of Rights.

        International education exchange.--Funds are used for international
    exchange programs to help improve civics and economics education in
    central and eastern European countries, countries that were part of the
    former Soviet Union, and the United States.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-999      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    11.3    Personnel compensation: Other
              than full-time permanent......           1           1           1
    24.0    Printing and reproduction.......           2           2           1
    25.1    Advisory and assistance services           5           5           5
    25.2    Other services..................          46          52          71
    25.3    Purchases of goods and services
              from Government accounts......           9           9           9
    25.5    Research and development
              contracts.....................          55          56          56
    25.7    Operation and maintenance of
              equipment.....................           9           9           9
    41.0    Grants, subsidies, and
              contributions.................         222         462         357
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         349         596         509
    99.0  Reimbursable obligations..........           2
    99.5  Below reporting threshold.........           2           2           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............         353         598         511
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-999      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          11          13          13
    ---------------------------------------------------------------------------

                                    Libraries

        The account for the Office of Library programs, which was formerly
    shown under the Department of Education, Office of Educational Research
    and Improvement, is now part of the Institute of Museum and Library
    Services.

    [[Page 449]]

                             DEPARTMENTAL MANAGEMENT

                                  Federal Funds

    General and special funds:

                             Program Administration

        For carrying out, to the extent not otherwise provided, the
    Department of Education Organization Act, including rental of conference
    rooms in the District of Columbia and hire of two passenger motor
    vehicles, [$327,000,000] $341,039,000. (Department of Education
    Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct program....................         326         326         341
    01.01 Reimbursable programs.............           6           8           8
                                               ---------   ---------  ----------
    10.00   Total obligations...............         332         334         349
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         333         334         349
    22.30 Unobligated balance expiring......          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         332         334         349
    23.95 New obligations...................        -332        -334        -349
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         327         327         341
    40.75   Reduction pursuant to P.L. 104-
              208...........................                      -1
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........         327         326         341
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           6           8           8
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         333         334         349
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         183         119         123
    73.10 New obligations...................         332         334         349
    73.20 Total outlays (gross).............        -406        -330        -348
    73.40 Adjustments in expired accounts...          10
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         119         123         124
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         254         245         253
    86.93 Outlays from current balances.....         130          78          87
    86.97 Outlays from new permanent
            authority.......................           3           4           4
    86.98 Outlays from permanent balances...          19           3           4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         406         330         348
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -6          -8          -8
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         327         326         341
    90.00 Outlays...........................         400         322         340
    ---------------------------------------------------------------------------

        The Program Administration account includes the direct Federal costs
    of providing grants and administering elementary and secondary
    education, bilingual education, higher education, vocational and adult
    education, and special education programs, programs for persons with
    disabilities and a portion of the direct Federal costs for administering
    student financial aid programs. It also supports assessment, statistics,
    research and improvement activities.

        In addition, this account includes the cost of providing centralized
    support and administrative services, overall policy development, and
    strategic planning for the Department. Included in the centralized
    activities are rent and mail services; telecommunciations; contractual
    services; financial management and accounting, including payments to
    schools, education agencies and other grant recipients, and preparation
    of auditable financial statements; ADP services; personnel management;
    budget formulation and execution; program evaluation; legal services;
    congressional and public relations; and intergovernmental affairs.

        Reimbursable program.--Reimbursements to this account include the
    costs of collecting defaulted Perkins student loans and of providing
    administrative services to other agencies.

        Also included in this account are contributions from the public.
    Activities supported include the Goals 2000 Teachers' Forum, and the
    Gifts and Bequests Miscellaneous Fund. No new contributions are
    currently anticipated for 1998.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         137         140         141
    11.3      Other than full-time permanent          13          11          11
    11.5      Other personnel compensation..           2           1           1
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         152         152         153
    12.1    Civilian personnel benefits.....          30          31          33
    21.0    Travel and transportation of
              persons.......................           5           5           5
    23.1    Rental payments to GSA..........          23          22          25
    23.3    Communications, utilities, and
              miscellaneous charges.........          17          16          17
    24.0    Printing and reproduction.......           8           9          10
    25.1    Advisory and assistance services           5           5           5
    25.2    Other services..................          10           9          13
    25.3    Purchases of goods and services
              from Government accounts......          14          15          14
    25.4    Operation and maintenance of
              facilities....................           1           1           1
    25.7    Operation and maintenance of
              equipment.....................          44          50          46
    26.0    Supplies and materials..........           3           3           3
    31.0    Equipment.......................          13           5          13
    32.0    Land and structures.............           1           1           2
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         326         324         340
    99.0  Reimbursable obligations..........           6           7           7
    99.5  Below reporting threshold.........                       3           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............         332         334         349
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    1001  Full-time equivalent employment...       2,733       2,630       2,575
    1005  Full-time equivalent of overtime
            and holiday hours...............           3           3           3
    ---------------------------------------------------------------------------

                             Office for Civil Rights

        For expenses necessary for the Office for Civil Rights, as
    authorized by section 203 of the Department of Education Organization
    Act, [$55,000,000] $61,500,000. (Department of Education Appropriations
    Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct program: Civil Rights......          55          55          62
                                               ---------   ---------  ----------
    10.00   Total obligations...............          55          55          62
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          55          55          62
    23.95 New obligations...................         -55         -55         -62
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          55          55          62
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          28          11           9
    73.10 New obligations...................          55          55          62

    [[Page 450]]

    73.20 Total outlays (gross).............         -72         -57         -60
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          11           9          11
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          48          48          53
    86.93 Outlays from current balances.....          24           9           7
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          72          57          60
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          55          55          62
    90.00 Outlays...........................          72          57          60
    ---------------------------------------------------------------------------

        The Office for Civil Rights is responsible for ensuring that no
    person is unlawfully discriminated against on the basis of race, color,
    national origin, sex, disability, or age in the delivery of services or
    the provision of benefits in programs or activities of schools and
    institutions receiving financial assistance from the Department of
    Education. The authorities under which the Office for Civil Rights
    operates are title VI of the Civil Rights Act of 1964 (racial and ethnic
    discrimination), title IX of the Education Amendments of 1972 (sex
    discrimination), section 504 of the Rehabilitation Act of 1973
    (discrimination against individuals with a disability), the Age
    Discrimination Act of 1975, and the Americans with Disabilities Act of
    1990.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          37          37          38
    11.3    Other than full-time permanent..           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          38          38          39
    12.1  Civilian personnel benefits.......           7           7           8
    21.0  Travel and transportation of
            persons.........................           1           1           1
    23.1  Rental payments to GSA............           4           4           5
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           1           1
    25.2  Other services....................                                   1
    25.3  Purchases of goods and services
            from Government accounts........           1           2           2
    25.7  Operation and maintenance of
            equipment.......................           1           1           2
    26.0  Supplies and materials............                                   1
    31.0  Equipment.........................           1                       1
    99.5  Below reporting threshold.........           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          55          55          62
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         744         724         724
    ---------------------------------------------------------------------------

                         Office of the Inspector General

        For expenses necessary for the Office of the Inspector General, as
    authorized by Section 212 of the Department of Education Organization
    Act, [$30,000,000] $32,000,000. (Department of Education Appropriations
    Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Inspector General.................          29          30          32
                                               ---------   ---------  ----------
    10.00   Total obligations...............          29          30          32
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          29          30          32
    23.95 New obligations...................         -29         -30         -32
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          29          30          32
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           8           6           5
    73.10 New obligations...................          29          30          32
    73.20 Total outlays (gross).............         -31         -31         -31
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           6           5           6
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          25          26          27
    86.93 Outlays from current balances.....           6           5           4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          31          31          31
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          29          30          32
    90.00 Outlays...........................          31          31          31
    ---------------------------------------------------------------------------

        The Inspector General is responsible for the quality, coverage, and
    coordination of audit, investigation, and security functions relating to
    Federal education activities. The Inspector General has the authority to
    inquire into all activities of the Department including those performed
    under Federal education contracts, grants, or other agreements. Under
    the Chief Financial Officers Act of 1990, the Inspector General is also
    responsible for internal reviews of the Department's financial systems
    and audits of its financial statements.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          17          18          19
    11.5    Other personnel compensation....           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          18          19          20
    12.1  Civilian personnel benefits.......           4           4           5
    21.0  Travel and transportation of
            persons.........................           1           1           1
    23.1  Rental payments to GSA............           2           2           2
    25.1  Advisory and assistance services..           1                       1
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    25.7  Operation and maintenance of
            equipment.......................                                   1
    99.5  Below reporting threshold.........           2           3           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          29          30          32
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         305         317         317
    ---------------------------------------------------------------------------

                             Headquarters Renovation

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1500-0-1-503      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................           1           6
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................                       6
    22.00 New budget authority (gross)......           7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           7           6
    23.95 New obligations...................          -1          -6
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           6
    ----------------------------------------------------------------------------

    [[Page 451]]

        New budget authority (gross), detail:
    40.00 Appropriation.....................           7
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation                       1           2
    73.10 New obligations...................           1           6
    73.20 Total outlays (gross).............                      -5          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           1           2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....                       5           2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           7
    90.00 Outlays...........................                       5           2
    ---------------------------------------------------------------------------

        This account provides the Department of Education's portion of funds
    to renovate its headquarters building, including costs for
    administrative services, information technology, telecommunications
    cabling, and systems furniture. The remaining funds required for the
    renovation, which began in October 1994, will be provided by the General
    Services Administration.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1500-0-1-503      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................                       1
    25.7  Operation and maintenance of
            equipment.......................                       2
    31.0  Equipment.........................                       3
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..                       6
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............           1           6
    ---------------------------------------------------------------------------

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

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                                             1996 actual   1997 est.   1998 est.
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    Offsetting receipts from the public:
      91-022100  FFEL Guarantee agency
        reserve recoveries: Legislative
        proposal, subject to PAYGO..........                                 731
      91-291500  Repayment of loans, capital
        contributions, higher education
        activities, Education...............          61          62          61
                                               ---------   ---------  ----------
    General Fund Offsetting receipts from
     the public.............................          61          62         792
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                               GENERAL PROVISIONS

        Sec. 301. No funds appropriated in this Act may be used for the
    transportation of students or teachers (or for the purchase of equipment
    for such transportation) in order to overcome racial imbalance in any
    school or school system, or for the transportation of students or
    teachers (or for the purchase of equipment for such transportation) in
    order to carry out a plan of racial desegregation of any school or
    school system.
        Sec. 302. None of the funds contained in this Act shall be used to
    require, directly or indirectly, the transportation of any student to a
    school other than the school which is nearest the student's home, except
    for a student requiring special education, to the school offering such
    special education, in order to comply with title VI of the Civil Rights
    Act of 1964. For the purpose of this section an indirect requirement of
    transportation of students includes the transportation of students to
    carry out a plan involving the reorganization of the grade structure of
    schools, the pairing of schools, or the clustering of schools, or any
    combination of grade restructuring, pairing or clustering. The
    prohibition described in this section does not include the establishment
    of magnet schools.
        Sec. 303. No funds appropriated under this Act may be used to
    prevent the implementation of programs of voluntary prayer and
    meditation in the public schools.
        [Sec. 304. Notwithstanding any other provision of law, funds
    available under section 458 of the Higher Education Act shall not exceed
    $491,000,000 for fiscal year 1997. The Department of Education shall use
    $80,000,000 of the amounts provided for payment of administrative cost
    allowances to guaranty agencies for fiscal year 1996. For fiscal year
    1997, the Department of Education shall pay administrative costs to
    guaranty agencies, calculated on the basis of 0.85 percent of the total
    principal amount of loans upon which insurance was issued on or after
    October 1, 1996: Provided, That such administrative costs shall be paid
    only on the first $8,200,000,000 of the principal amount of loans upon
    which insurance was issued on or after October 1, 1996 by such guaranty
    agencies, and shall not exceed a total of $70,000,000. Such payments are
    to be paid quarterly, and receipt of such funds and uses of such funds
    shall be in accordance with section 428(f) of the Higher Education Act.]
        [Notwithstanding section 458 of the Higher Education Act, the
    Secretary may not use funds available under that section or any other
    section for subsequent fiscal years for administrative expenses of the
    William D. Ford Direct Loan Program. The Secretary may not require the
    return of guaranty agency reserve funds during fiscal year 1997, except
    after consultation with both the Chairmen and ranking members of the
    House Economic and Educational Opportunities Committee and the Senate
    Labor and Human Resources Committee. Any reserve funds recovered by the
    Secretary shall be returned to the Treasury of the United States for
    purposes of reducing the Federal deficit.]
        [No funds available to the Secretary may be used for (1) the hiring
    of advertising agencies or other third parties to provide advertising
    services for student loan programs prior to January 1, 1997, or (2)
    payment of administrative fees relating to the William D. Ford Direct
    Loan Program to institutions of higher education.]
        [Sec. 305. None of the funds appropriated in this Act may be
    obligated or expended to carry outsection 621(b) of Public Law 101-589.]

                              [(transfer of funds)]

        [Sec. 306. Not to exceed 1 percent of any discretionary funds
    (pursuant to the Balanced Budget and Emergency Deficit Control Act, as
    amended) which are appropriated for the current fiscal year for the
    Department of Education in this Act may be transferred between
    appropriations, but no such appropriation shall be increased by more
    than 3 percent by any such transfer: Provided, That the Appropriations
    Committees of both Houses of Congress are notified at least fifteen days
    in advance of any transfer.]
        [Sec. 307. (a) Section 8003(f)(3)(A)(i) of the Elementary and
    Secondary Education Act of 1965 (20 U.S.C. 7703(f)(3)(A)(i)) is
    amended--]
            [(1) in the matter preceding subclause (I), by striking ``The
        Secretary'' and all that follows through ``greater of--'' and
        inserting the following: ``The Secretary, in conjunction with the
        local educational agency, shall first determine each of the
        following:'';]
            [(2) in each of subclauses (I) through (III), by striking ``the
        average'' each place it appears the first time in each such
        subclause and inserting ``The average'';]
            [(3) in subclause (I), by striking the semicolon and inserting a
        period;]
            [(4) in subclause (II), by striking ``: or'' and inserting a
        period; and]
            [(5) by adding at the end the following: ``The local educational
        agency shall select one of the amounts determined under subclause
        (I), (II), or (III) for purposes of the remaining computations under
        this subparagraph.''.]
        [(b) The amendments made by subsection (a) shall apply with respect
    to fiscal years beginning with fiscal year 1995.]
        [Sec. 308. Section 485(e)(9) of the Higher Education Act of 1965 is
    amended by striking out ``June 30'' in the second sentence of such
    section and inserting ``August 30''.] (Department of Education
    Appropriations Act, 1997.)