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

                         THE BUDGET FOR FISCAL YEAR 1999

    [[Page 317]]

                             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, the School-to-Work Opportunities Act,
    and sections 3122, 3132, 3136, and 3141 and parts B, C, and D of title
    III of the Elementary and Secondary Education Act of 1965,
    [$1,275,035,000] $1,347,000,000, of which [$464,500,000] $474,000,000
    for the Goals 2000: Educate America Act and [$200,000,000] $125,000,000
    for the School-to-Work Opportunities Act shall become available on July
    1, [1998] 1999, and remain available through September 30, [1999] 2000,
    and of which $87,000,000 shall be for section 3122: 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] $2,000,000 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 1 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[:
    Provided further, That of the funds made available under section 3136,
    $5,000,000 shall be provided to the Hospitals, Universities, Businesses,
    and Schools program to develop a regional information infrastructure in
    the mid-Atlantic region, $7,300,000 shall be for the ``I Can Learn''
    project to integrate technology into eighth grade algebra classrooms and
    $800,000 shall be provided for a distance education network involving a
    consortium of nine school districts and Nicolet Area Technical College:
    Provided further, That of the amount available for title III, part B of
    the Elementary and Secondary Education Act of 1965, as amended,
    $8,000,000 shall be awarded to continue and expand the Iowa
    Communication Network statewide fiber optic demonstration project].
    (Department of Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Goals 2000:

    00.01   State and local education
              systemic improvement..........         653         486         476
    00.02   Parental assistance.............          15          25          25
                                               ---------   ---------  ----------
    00.91     Total goals 2000..............         668         511         501
    01.01 School-to-work opportunities......         138         374         125
          Educational technology:

    02.01   Technology literacy challenge
              fund..........................                     425         475
    02.02   Technology innovation challenge
              grants........................                     106         106
    02.03   Regional technology in education
              consortia.....................                      10          10
            National activities:
    02.04     Technology leadership
                activities..................                                   2
    02.05     Teacher training in technology                                  75
    02.06     Community-based technology....                                  10
    02.07   Star schools....................                      34          34
    02.08   Ready to learn television.......                       7           7
    02.09   Telecommunications demonstration
              project for mathematics.......                       2           2
                                               ---------   ---------  ----------
    02.91   Total, educational technology...                     584         721
                                               ---------   ---------  ----------
    10.00   Total obligations...............         806       1,469       1,347
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......         329         194
    22.00 New budget authority (gross)......         691       1,275       1,347
    22.21 Unobligated balance transferred to
            other accounts..................         -20
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,000       1,469       1,347
    23.95 New obligations...................        -806      -1,469      -1,347
    24.40 Unobligated balance available, end
            of year: Uninvested.............         194
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         691       1,275       1,347
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         532         902       1,703
    73.10 New obligations...................         806       1,469       1,347
    73.20 Total outlays (gross).............        -431        -668      -1,228
    73.40 Adjustments in expired accounts...          -4
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         902       1,703       1,822
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          23          64          67
    86.93 Outlays from current balances.....         408         604       1,161
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         431         668       1,228
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         691       1,275       1,347
    90.00 Outlays...........................         431         668       1,228
    ---------------------------------------------------------------------------

        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 in all 50 States. 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 all 50 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. To date, competitive, 5-year grants have been
        awarded to 37 States that have completed and are ready to implement
        their school-to-work plans. Remaining States are expected to receive
        implementation grants in 1998.
            Direct grants are also provided to local partnerships serving
        young people who live in high-poverty urban and rural areas, as well
        as partnerships that serve Indian youth. These funds also support
        national evaluation, research, and development activities to provide
        national leadership and analysis of school-to-work opportunities
        initiatives.

        Technology for Education:
            Technology Literacy Challenge Fund.--All States will receive the
        third 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.

    [[Page 318]]

            Technology innovation challenge grants.--Competitive grants are
        made to consortia of schools 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.
            Technology leadership activities.--Funds support leadership
        activities designed to promote the effective use of educational
        technology, and to strengthen and coordinate the Department's
        technology initiatives and other Federal and private sector efforts.
            Teacher training in technology.--Funds will support grants to
        consortia of States, colleges of education, and other public and
        private entities to provide summer institutes or other activities
        that will help new teachers learn how to use technology effectively.
            Community-based technology.--Funds will establish computer
        learning centers in low-income neighborhoods for students and
        adults.

        Star schools.--Funds support competitive grants to partnerships for
    the development of instructional programming and professional
    development using distance learning technologies.

        Ready to learn television.--Funds support the development of
    educational programming and outreach activities promoting literacy and
    school readiness 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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           1           1           1
    25.2  Other services....................           1           2           2
    25.5  Research and development contracts           2           5           6
    41.0  Grants, subsidies, and
            contributions...................         802       1,461       1,338
                                               ---------   ---------  ----------
    99.9    Total obligations...............         806       1,469       1,347
    ---------------------------------------------------------------------------

                         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,]
    [$8,021,827,000] $8,480,892,000, of which [$6,553,249,000]
    $6,985,106,000 shall become available on July 1, [1998] 1999, and shall
    remain available through September 30, [1999] 2000, and of which
    $1,448,386,000 shall become available on October 1, [1998] 1999 and
    shall remain available through September 30, [1999] 2000, for academic
    year [1998-1999] 1999-2000: Provided, That [$6,273,212,000]
    $6,274,000,000 shall be available for basic grants under section 1124:
    Provided further, That up to $3,500,000 of these funds shall be
    available to the Secretary on October 1, [1997] 1998, to obtain updated
    local-educational-agency-level census poverty data from the Bureau of
    the Census: Provided further, That [$1,102,020,000] $1,200,000,000 shall
    be available for concentration grants under section 1124A, $293,000,000
    shall be available for targeted grants under section 1125, [$6,977,000]
    $8,900,000 shall be available for evaluations under section 1501 and not
    more than [$7,500,000] $8,500,000 shall be reserved for section 1308, of
    which not more than $3,000,000 shall be reserved for section 1308(d):
    [Provided further, That grant awards under section 1124 and 1124A of
    title I of the Elementary and Secondary Education Act shall be made to
    each State or local educational agency at no less than 100 percent of
    the amount such State or local educational agency received under this
    authority for fiscal year 1997 under Public Laws 104-208 and 105-18:
    Provided further, That in determining State allocations under any other
    program administered by the Secretary, amounts provided under Public Law
    105-18, or equivalent amounts provided for in this Act, will not be
    taken into account in determining State allocations:] Provided further,
    That [$120,000,000] $150,000,000 shall be available under section
    1002(g)(2) to demonstrate effective approaches to comprehensive school
    reform to be allocated and expended in accordance with the instructions
    relating to this proviso in Public Law 105-78 and the statement of the
    managers on the conference report accompanying [this] that Act:
    [Provided further, That in carrying out this initiative, the Secretary
    and the States shall support only approaches that show the most promise
    of enabling children served by title I to meet challenging State content
    standards and challenging State student performance standards based on
    reliable research and effective practices, and include an emphasis on
    basic academics and parental involvement:] Provided further, That
    $35,000,000 shall be available under section 1002(g)(2) for transition
    to school projects that demonstrate innovative approaches for helping
    children from low-income families make transitions from preschool to
    kindergarten and the early elementary grades, and enable those children
    to meet high State standards: Provided further, That [such funds] no
    funds appropriated under section 1002(g)(2) shall [not] be available for
    section 1503. (Department of Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Grants to local educational
                agencies:
    00.01     Basic grants..................       6,261       6,098       6,211
    00.02     Concentration grants..........         953       1,055       1,188
    00.03     Targeted grants...............                                 290
    00.04     Set-aside for BIA/outlying
                areas.......................          80          76          78
    00.05   Capital expenses................          41          41          10
    00.06   Even start......................         103         125         115
    00.07   State agency programs...........         345         349         395
    00.08   Evaluation......................           7           7           9
    00.09   Demonstrations of comprehensive
              school reform.................                     120         150
    00.10   Transition to school............                                  35
    00.11   Migrant education projects......           9          10
                                               ---------   ---------  ----------
    00.91     Total direct program..........       7,799       7,881       8,481
    09.01 Reimbursable program..............          32
                                               ---------   ---------  ----------
    10.00   Total obligations...............       7,831       7,881       8,481
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          41          10
    22.00 New budget authority (gross)......       7,809       7,871       8,481
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           2
    22.30 Unobligated balance expiring......         -12
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       7,840       7,881       8,481
    23.95 New obligations...................      -7,831      -7,881      -8,481
    24.40 Unobligated balance available, end
            of year: Uninvested.............          10
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       6,501       6,573       7,033
          Permanent:

    61.00   Transferred to other accounts...          -8
    65.00   Advance appropriation (definite)       1,298       1,298       1,448
    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).          18
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       7,809       7,871       8,481
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       6,721       7,306       8,939
    73.10 New obligations...................       7,831       7,881       8,481
    73.20 Total outlays (gross).............      -7,216      -6,250      -7,943
    73.40 Adjustments in expired accounts...         -27
    73.45 Adjustments in unexpired accounts.          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       7,306       8,939       9,477
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         867         329         352

    [[Page 319]]

    86.93 Outlays from current balances.....       5,395       4,723       6,183
    86.97 Outlays from new permanent
            authority.......................         942         909       1,014
    86.98 Outlays from permanent balances...          12         289         394
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       7,216       6,250       7,943
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -18
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       7,791       7,871       8,481
    90.00 Outlays...........................       7,199       6,250       7,943
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................       7,791       7,871       8,481
      Outlays...........................       7,198       6,250       7,943
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                  15
      Outlays...........................                                   1
                                        ------------------------------------
    Total:
      Budget Authority..................       7,791       7,871       8,496
      Outlays...........................       7,198       6,250       7,944
                                        ====================================

        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 $3.5 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 phase-out funding to local educational agencies that entered
    into long-term contracts and other arrangements associated with
    providing educational services to eligible children attending non-public
    schools before the Supreme Court reversed the Aguilar v. Felton decision
    in June 1997.

        Even start.--Funds are provided by formula to States, which in turn
    award grants to partnerships of local educational agencies and other
    organizations to operate family literacy projects integrating early
    childhood education, adult literacy and parenting education for low-
    income families with children under age 8.

        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 facilities for neglected or delinquent children or
    adult correction facilities. Services help institutionalized youth
    achieve the same challenging standards established for students in local
    public schools.

        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.

        Demonstrations of comprehensive school reform.--Funds are provided
    by formula to States, which in turn award grants to local educational
    agencies to help participating schools initiate and implement
    comprehensive school reforms based on approaches and methods grounded in
    reliable research and practice.

        Transition to school projects.--Funds support grants to local
    educational agencies that have formed consortia with early childhood
    programs to provide instructional and support services to help low-
    income families and their young children make successful transitions
    from preschool through the early elementary grades.

        Reimbursable program.--This activity consists 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           8           8           8
    25.2    Other services..................           8           8           8
    25.3    Purchases of goods and services
              from Government accounts......           4           4           4
    41.0    Grants, subsidies, and
              contributions.................       7,779       7,861       8,461
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       7,799       7,881       8,481
    99.0  Reimbursable obligations..........          32
                                               ---------   ---------  ----------
    99.9    Total obligations...............       7,831       7,881       8,481
    ---------------------------------------------------------------------------

                         Education for the Disadvantaged

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-2-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.11 Migrant education projects........                                  15
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                  15
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  15
    23.95 New obligations...................                                 -15
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                  15
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                  15
    73.20 Total outlays (gross).............                                  -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                  14
    ----------------------------------------------------------------------------

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

        Net budget authority and outlays:
    89.00 Budget authority..................                                  15
    90.00 Outlays...........................                                   1
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under proposed legislation to revise and reauthorize programs currently
    authorized under the Higher Education Act, as amended.

        Migrant education projects.--Under the Administration proposal for
    Title IV of that Act, funds would 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.

                   Class Size Reduction and Teacher Financing

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0099-4-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Class size reduction and teacher
            financing.......................                               1,100
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                               1,100
    ----------------------------------------------------------------------------

    [[Page 320]]

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               1,100
    23.95 New obligations...................                              -1,100
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.00 Appropriation.....................                               1,100
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                               1,100
    73.20 Total outlays (gross).............                                 -55
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                               1,045
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                  55
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               1,100
    90.00 Outlays...........................                                  55
    ---------------------------------------------------------------------------

        The President is proposing an initiative to help local educational
    agencies address teacher shortages and classroom overcrowding. The
    initiative helps reduce class sizes in the early grades, the grades in
    which children need the most attention in learning to read proficiently.
    The initiative responds to research showing that reducing class size to
    15-18 students in the early grades improves student achievement,
    particularly among low-income and minority students in inner cities. The
    program would be funded at $1.1 billion in 1999 and $7.34 billion over
    an initial five-year period, with funding obtained from tobacco
    legislation revenues. By the year 2005, the initiative will enable
    schools to hire 100,000 additional teachers.

                                   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, [$808,000,000] $696,000,000, of which
    [$662,000,000] $626,000,000 shall be for basic support payments under
    section 8003(b), [$50,000,000] $40,000,000 shall be for payments for
    children with disabilities under section 8003(d), [$62,000,000]
    $20,000,000, to remain available until expended, shall be for payments
    under section 8003(f), [$7,000,000 shall be for construction under
    section 8007, and $24,000,000 shall be for Federal property payments
    under section 8002 of which such sums as may be necessary shall be for
    section 8002(j)] and [$3,000,000] $10,000,000, to remain available until
    expended, shall be for facilities maintenance under section 8008:
    [Provided, That section 8003(f)(2) of the Elementary and Secondary
    Education Act of 1965 (20 U.S.C. 7709(f)(2)) is amended in clause (ii)
    in subclause (I) by striking ``35 percent'' and all that follows through
    the semicolon, and inserting the following: ``25 percent of the total
    student enrollment of such agency. For purposes of this subclause, all
    students described in section 8003(a)(1) are used to determine
    eligibility, regardless of whether or not a local educational agency
    receives funds for these children from section 8003(b) of the Act;''.
        The amendment made by this proviso shall apply with respect to
    fiscal years beginning with fiscal year 1996: Provided, That the
    Secretary of Education shall treat as timely filed, and shall process
    for payment, an application for a fiscal year 1998 payment from the
    local educational agency for Boston, Massachusetts, under section 8003
    of the Elementary and Secondary Education Act of 1965 if the Secretary
    has received that application not later than 30 days after the enactment
    of this Act: Provided further, That the Secretary of Education shall
    forgive any overpayments established for fiscal year 1994 under section
    3(d)(2)(B) of the Act of September 30, 1950 (Public Law 874--81st
    Congress), for any local educational agency in the State of Texas
    receiving funds appropriated for fiscal year 1994 under the authority of
    this section: Provided further, That section 8002 of the Elementary and
    Education Act of 1965 (20 U.S.C. 7702) is amended by adding the
    following new subsection:
        ``(j) Additional Assistance for Certain Local Educational Agencies
    Impacted by Federal Property Acquisition.--
            ``(1) Reservation.--From amounts appropriated under section
        8014(g) for a fiscal year, the Secretary shall provide additional
        assistance to meet special circumstances relating to the provision
        of education in local educational agencies eligible to receive
        assistance under this section.
             ``(2) Eligibility.--(A) A local educational agency is eligible
        to receive additional assistance under this subsection only if such
        agency--
                 ``(i) received a payment under both this section and
            section 8003(b) for fiscal year 1996 and is eligible to receive
            payments under those sections for the year of application;
                 ``(ii) provided a free public education to children
            described under sections 8003(a)(1)(A), (B), or (D);
                 ``(iii) had a military installation located within the
            geographic boundaries of the local educational agency that was
            closed as a result of base closure or realignment;
                 ``(iv) remains responsible for the free public education of
            children residing in housing located on Federal property within
            the boundaries of the closed military installation but whose
            parents are on active duty in the uniformed services and
            assigned to a military activity located within the boundaries of
            an adjoining local educational agency; and
                 ``(v) demonstrates to the satisfaction of the Secretary
            that such agency's per-pupil revenue derived from local sources
            for current expenditures is not less than that revenue for the
            preceding fiscal year.
             ``(3) Maximum amount.--(A) The maximum amount that a local
        educational agency is eligible to receive under this subsection for
        any fiscal year, when combined with its payment under subsection
        (b), shall not be more than 50 percent of the maximum amount
        determined under subsection (b);
             ``(B) If funds appropriated under section 8014(g) are
        insufficient to pay the amount determined under subparagraph (A),
        the Secretary shall ratably reduce the payment to each local
        education agency eligible under this subsection;
             ``(C) If funds appropriated under section 8014(g) are in excess
        of the amount determined under subparagraph (A) the Secretary shall
        ratably distribute any excess funds to all local educational
        agencies eligible for payment under subsection (b) of this
        section.'':
    Provided further, That section 8014 of the Elementary and Secondary
    Education Act of 1965 (20 U.S.C. 7714) is amended by adding the
    following new subsection:
         ``(g) Additional Assistance for Certain Federal Property Local
    Educational Agencies.--For the purpose of carrying out section 8002(j)
    there are authorized to be appropriated such sums as are necessary
    beginning in fiscal year 1998 and for each succeeding fiscal year.'':
    Provided further, That of the funds available for section 8007, the
    Secretary shall, under such terms and conditions he determines
    appropriate, first provide $1,500,000 to applicant number 11-2815 and
    $1,500,000 to applicant number 36-4403 for the construction of public
    elementary or secondary schools where the current structures are unsafe
    and pose serious health threats to the students, if requests for funding
    and construction project descriptions are submitted to the Secretary
    within 30 days of enactment of this Act: Provided further, That
    notwithstanding any deadline established by the Secretary of Education
    under subsection (c) of section 8005 of the Elementary and Secondary
    Education Act of 1965 (20 U.S.C. 7705), and without regard to paragraphs
    (1)(A), (2), and (3) of subsection (d) of that section, the Secretary
    shall accept, as if timely received, an application from the Maconaquah
    School Corporation, Bunker Hill, Indiana, under section 8003 of that Act
    for fiscal year 1996 if the Secretary has received that application not
    later than 30 days after the enactment of this Act: Provided further,
    That notwithstanding any other provision of law, the Secretary of
    Defense shall treat any data included in an application described in the
    preceding proviso, and that is approved by the Secretary of Education,
    as data to be used in determining the eligibility of the Maconaquah
    School Corporation, Bunker Hill, Indiana, for, and the amount of, a
    payment for any of the fiscal years 1998 through 2000 under section 386
    of the National Defense Authorization Act for Fiscal Year 1993: Provided
    further, That section 8 of Public Law 104-195 is amended by striking the
    period after ``year'' and adding the following: ``or, for fiscal year
    1995 or fiscal year 1996, the amount of any payment under section
    8003(f) of the Elementary and Secondary Education

    [[Page 321]]

    Act of 1965'': Provided further, That the Secretary of Education shall
    deem the local educational agency serving the Clinton County School
    District in Albany, Kentucky, to meet the eligibility requirements of
    section 8002(a)(1)(C) of the Elementary and Secondary Education Act of
    1965 (20 U.S.C. 7702(a)(1)(C)).] 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 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 1998 shall
    be eligible to receive a payment under sections 8003(b) and 8003(d) for
    fiscal year 1999: Provided further, That notwithstanding section
    8003(b)(1)(C), the maximum amount of the basic support payment for any
    local educational agency under section 8003(b)(1) shall be determined by
    multiplying the number of that agency's weighted student units for
    children described in sections 8003(a)(1)(B) and 8003(a)(1)(C) by the
    greatest of: (1) the local contribution rate described in section
    8003(b)(1)(C)(iii); (2) the amount described in section
    8003(b)(1)(C)(iv); or (3) the average per-pupil expenditure of all the
    States for fiscal year 1996, multiplied by the local contribution
    percentage of the State in which the agency is located: Provided
    further, That notwithstanding section 8003(b)(2), if funds appropriated
    are insufficient to pay each local educational agency the full amount
    calculated under the preceding proviso, each such payment shall be: (1)
    multiplied by the sum of: (A) .50; and (B) one-half of the percentage of
    the agency's average daily attendance (as defined in section 14101(1) of
    such Act) that is comprised of children described in sections
    8003(a)(1)(B) and 8003(a)(1)(C); and (2) ratably reduced or increased,
    as the case may be, but not to exceed the maximum amount described in
    the third proviso above: Provided further, That none of the funds
    appropriated shall be used for payment under section 8003(e).
    (Department of Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0102-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Payments for federally connected children:

    00.01   Basic support payments..........         614         662         626
    00.02   Supplemental payments for
              children with disabilities....          40          50          40
    00.03   Payments for heavily impacted
              districts.....................          45          90          39
                                               ---------   ---------  ----------
    00.91   Subtotal, payments for federally
              connected children............         699         802         705
    01.01 Facilities maintenance............           6           5           8
    02.01 Construction......................           7          19           1
    03.01 Payments for Federal property.....          17          24
    04.01 Payments for section 3(d)(2)(B)...           3           1
    05.01 Construction (P.L. 81-815)........           5
                                               ---------   ---------  ----------
    10.00   Total obligations...............         737         851         714
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......         109          94          51
    22.00 New budget authority (gross)......         730         808         696
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           4
    22.30 Unobligated balance expiring......         -11
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         832         902         747
    23.95 New obligations...................        -737        -851        -714
    24.40 Unobligated balance available, end
            of year: Uninvested.............          94          51          33
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         730         808         696
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         320         334         178
    73.10 New obligations...................         737         851         714
    73.20 Total outlays (gross).............        -656      -1,007        -723
    73.40 Adjustments in expired accounts...         -64
    73.45 Adjustments in unexpired accounts.          -4
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         334         178         169
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         521         660         564
    86.93 Outlays from current balances.....         135         347         159
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         656       1,007         723
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         730         808         696
    90.00 Outlays...........................         656       1,007         723
    ---------------------------------------------------------------------------

        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 302,000 federally connected children enrolled in
    approximately 900 school districts across the country. The request would
    provide an average payment of approximately $2,100 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 32,000
    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.--Additional 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 tend to 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 serve federally connected military
    students and are owned by the Department of Education. Funds would also
    be used to transfer the facilities to local educational agencies.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0102-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    32.0  Land and structures...............           5           5           8
    41.0  Grants, subsidies, and
            contributions...................         732         846         706
                                               ---------   ---------  ----------
    99.9    Total obligations...............         737         851         714
    ---------------------------------------------------------------------------

                           School Improvement Programs

        For carrying out school improvement activities authorized by titles
    II, IV[-A-1 and 2], 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; [$1,538,188,000]
    $1,272,800,000, of which [$1,246,300,000] $891,000,000 shall become
    available on July 1, [1998] 1999, and remain available through September
    30, [1999] 2000: Provided, That of the amount appropriated, $335,000,000
    shall be for Eisenhower professional development State grants under
    title II-B of the Elementary and Secondary Education Act of 1965 [of
    which $25,000,000 shall be for professional development in reading,
    $350,000,000 shall be for innovative education program strategies State
    grants under title VI-A of said Act and $750,000 shall be for an
    evaluation of comprehensive regional assistance centers under title XIII
    of said Act: Provided further, That of the amount made available for
    title IV-A-2, $350,000 shall be for the Yonkers Public Schools for
    innovative anti-drug and anti-violence activities.], and $125,000,000
    under title IV-A-1 of the Elementary and Secondary Education Act shall
    be awarded competitively by the Secretary to school districts based on
    the severity of their schools' drug or safety problems, or both, and
    their ability to develop and implement promising or proven programs and
    strategies to address those problems.

    [[Page 322]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Professional development and program
              innovation:

    00.01   Eisenhower professional
              development State grants......         310         335         335
    00.02   Innovative education program
              strategies State grants.......         310         350
          Safe and drug-free schools and communities:

    00.03   State grants....................         531         533         526
    00.04   National programs...............          25          25          30
    00.05   Coordinator Initiative..........                                  50
    00.06 Inexpensive book distribution.....          10          12          13
    00.07 Arts in education.................           9          10          10
    00.08 Magnet schools assistance.........          95         101         101
    00.09 Education for homeless children
            and youth.......................          25          30          30
    00.10 Women's educational equity........           2           3           3
    00.11 Training and advisory services....           7           7           8
    00.12 Ellender fellowships..............           2           2
    00.13 Education for Native Hawaiians....          15          18          18
    00.14 Alaska Native education equity....           8           8           8
    00.15 Charter schools...................          51          80         100
    00.16 Comprehensive regional assistance
            centers.........................          26          27          40
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,426       1,541       1,272
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           4           3
    22.00 New budget authority (gross)......       1,426       1,538       1,273
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,430       1,541       1,273
    23.95 New obligations...................      -1,426      -1,541      -1,272
    24.40 Unobligated balance available, end
            of year: Uninvested.............           3
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................       1,426       1,538       1,273
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       1,693       1,771       1,926
    73.10 New obligations...................       1,426       1,541       1,272
    73.20 Total outlays (gross).............      -1,276      -1,386      -1,460
    73.40 Adjustments in expired accounts...         -72
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       1,771       1,926       1,739
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          81          77          64
    86.93 Outlays from current balances.....       1,195       1,309       1,396
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,276       1,386       1,460
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,426       1,538       1,273
    90.00 Outlays...........................       1,276       1,386       1,460
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................       1,426       1,538       1,273
      Outlays...........................       1,276       1,386       1,460
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 203
      Outlays...........................                                  10
                                        ------------------------------------
    Total:
      Budget Authority..................       1,426       1,538       1,476
      Outlays...........................       1,276       1,386       1,470
                                        ====================================

        Eisenhower professional development State grants.--Formula grants
    are provided to States, outlying areas, and the Bureau of Indian Affairs
    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, outlying
        areas, and the Bureau of Indian Affairs 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.
            Coordinator Initiative.--Grants will be awarded to local
        educational agencies to provide middle schools with trained
        personnel who are experts in planning, designing, implementing, and
        evaluating successful drug and violence prevention programs in
        schools.

        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.--Formula grants 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 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           3           3           3
    25.2  Other services....................          19          20          16
    25.7  Operation and maintenance of
            equipment.......................           1           1           1
    41.0  Grants, subsidies, and
            contributions...................       1,403       1,517       1,252
                                               ---------   ---------  ----------

    [[Page 323]]

    99.9    Total obligations...............       1,426       1,541       1,272
    ---------------------------------------------------------------------------

                           School Improvement Programs

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-2-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Professional development and program
              innovation:

    00.01   Advanced placement test fees....                                   3
    00.02   Education opportunity zones.....                                 200
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                 203
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 203
    23.95 New obligations...................                                -203
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 203
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 203
    73.20 Total outlays (gross).............                                 -10
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                 193
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                  10
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 203
    90.00 Outlays...........................                                  10
    ---------------------------------------------------------------------------
        Note.--Includes $3 million in budget authority in 1999 for
    activities previously financed from the Department of Education, Office
    of Postsecondary Education, Higher education account. The comparable
    amount is $3 million for 1998.

        Advanced placement test fees.--The resources for this activity are
    proposed for later transmittal under proposed legislation to revise and
    reauthorize programs currently authorized under the Higher Education
    Act. Under the Administration proposal for this program, funds would
    support State efforts to pay for the advanced placement test fees of
    low-income students.

        Educational opportunity zones initiative.--The President will
    propose a program of competitive grants to high-poverty, low-achieving
    urban and rural school districts to support implementation of effective
    reform models and accountability measures to improve public education
    and raise student achievement. The initiative will focus on improving
    district-wide performance and establishing mechanisms to sustain
    effective practices. Districts must show they are using existing funds
    effectively as evidenced by improvements in student achievement, and
    future grants under this initiative will be dependent on continued
    learning gains. The program will support a range of reforms including
    fixing failing schools, ending social promotion, and holding schools
    accountable for improving academic outcomes.

                           [Child Literacy Initiative]

                         [(including transfer of funds)]

                             America Reads Challenge

        [For carrying out a literacy initiative, $210,000,000, which shall
    become available on October 1, 1998 and shall remain available through
    September 30, 1999 only if specifically authorized by subsequent
    legislation enacted by July 1, 1998: Provided, That, if the initiative
    is not authorized by such date, the funds shall be transferred to
    ``Special Education'' to be merged with that account and to be available
    for the same purposes for which that account is available: Provided
    further, That the transferred funds shall become available for
    obligation on July 1, 1999, and shall remain available through September
    30, 2000 for academic year 1999-2000.] For an additional amount for the
    America Reads Challenge child literacy initiative, $50,000,000.
    (Department of Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0011-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 America Reads Challenge...........                                 260
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                 260
    ----------------------------------------------------------------------------

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

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................                                  50
          Permanent:

    65.00   Advance appropriation (definite)                                 210
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................                                 260
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 260
    73.20 Total outlays (gross).............                                 -14
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                 246
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                   3
    86.97 Outlays from new permanent
            authority.......................                                  11
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........                                  14
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 260
    90.00 Outlays...........................                                  14
    ---------------------------------------------------------------------------
        Note: Congress provided $210 million for this initiative in P.L.
    105-78, on an advance basis to become available on October 1, 1998,
    contingent upon enactment of authorizing legislation by July 1, 1998.
    This schedule assumes enactment of that legislation.

        America Reads Challenge.--In 1998, the President proposed an
    initiative to work with schools, families, and communities on a national
    reading effort to ensure that children can read well and independently
    by the end of the third grade. The President's 1999 budget for the
    America Reads Challenge would provide the balance of the amount
    originally proposed for the initiative's first year--$50 million in
    addition to the $210 million advance appropriation that Congress
    provided--for a total of $260 million. These funds will provide extended
    learning time opportunities for children to practice and further develop
    their reading skills through the use of well-trained tutors in after-
    school, weekend, and summer reading programs. In applying for funds, the
    schools must show that they are using other existing funding sources
    effectively to improve the quality of in-school reading programs through
    professional development of teachers in the area of reading. The America
    Reads Challenge will pay primarily for schools/community partnerships to
    hire reading specialists, recruit tutors, pay for materials to train
    tutors, hire a coordinator to connect the in-school, out-of-school, and
    family literacy aspects of the reading program, and provide further
    professional development opportunities for teachers.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0011-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    24.0  Printing and reproduction.........                                   1
    25.2  Other services....................                                   2
    41.0  Grants, subsidies, and
            contributions...................                                 257
                                               ---------   ---------  ----------
    99.9    Total obligations...............                                 260
    ---------------------------------------------------------------------------

    [[Page 324]]

                          Chicago Litigation Settlement

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0220-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................           2           2           2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           9           7           5
    23.95 New obligations...................          -2          -2          -2
    24.40 Unobligated balance available, end
            of year: Uninvested.............           7           5           3
    ----------------------------------------------------------------------------

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

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

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

        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 expenses necessary 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, $62,600,000] $66,000,000. (Department of Education
    Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to local educational
            agencies........................          58          60          62
    00.02 Special programs for Indian
            children........................                                   3
    00.03 National activities...............                                   1
    00.04 Federal administration............           3           3
                                               ---------   ---------  ----------
    10.00   Total obligations...............          61          63          66
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          61          63          66
    23.95 New obligations...................         -61         -63         -66
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          61          63          66
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          66          67          75
    73.10 New obligations...................          61          63          66
    73.20 Total outlays (gross).............         -56         -55         -66
    73.40 Adjustments in expired accounts...          -3
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          67          75          75
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           5          10           8
    86.93 Outlays from current balances.....          51          45          58
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          56          55          66
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          61          63          66
    90.00 Outlays...........................          56          55          66
    ---------------------------------------------------------------------------
        Note.--Excludes $3 million in budget authority in 1999 for Indian
    education Federal administration transferred to Departmental Management,
    Program administration account. Comparable amounts for 1997 ($3 million)
    and 1998 ($3 million) are included above.

        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- 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 1997, 1,250 formula grants were made to local
    educational agencies and certain tribal schools enrolling approximately
    448,465 Indian students.

        Federal administration.--Funds to support the administrative
    expenses of the Office of Indian Education have been moved to the
    Department's program administration account.

        Special Programs for Indian children.--Competitive grants are made
    for a demonstration grants program and a professional development
    program.

        National activities.--Funds support research, evaluation, data
    collection, and related activities.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................           2           2
    25.2  Other services....................           1           1           1
    41.0  Grants, subsidies, and
            contributions...................          58          60          65
                                               ---------   ---------  ----------
    99.9    Total obligations...............          61          63          66
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          23          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 of 1965, without regard to section 7103(b), [$354,000,000]
    $387,000,000: 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, 1998.)

    [[Page 325]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Instructional services............         141         160         168
    00.02 Support services..................          10          14          14
    00.03 Training grants...................           5          25          50
    00.04 Foreign language assistance.......           5           5           5
    00.05 Immigrant education...............         100         150         150
                                               ---------   ---------  ----------
    10.00   Total obligations...............         261         354         387
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         262         354         387
    22.30 Unobligated balance expiring......          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         261         354         387
    23.95 New obligations...................        -261        -354        -387
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         262         354         387
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         241         319         393
    73.10 New obligations...................         261         354         387
    73.20 Total outlays (gross).............        -181        -279        -347
    73.40 Adjustments in expired accounts...          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         319         393         434
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           9          42          46
    86.93 Outlays from current balances.....         172         237         301
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         181         279         347
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         262         354         387
    90.00 Outlays...........................         181         279         347
    ---------------------------------------------------------------------------

        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.
    Appropriations 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           2           5           5
    41.0  Grants, subsidies, and
            contributions...................         259         349         382
                                               ---------   ---------  ----------
    99.9    Total obligations...............         261         354         387
    ---------------------------------------------------------------------------

             OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

                                  Federal Funds

    General and special funds:

                                Special Education

        For carrying out the Individuals with Disabilities Education Act,
    [$4,810,646,000] $4,845,646,000, of which [$4,565,185,000]
    $4,599,885,000 shall become available for obligation on July 1, [1998]
    1999, and shall remain available through September 30, [1999: Provided,
    That $1,500,000 of the funds provided shall be for section 687(b)(2)(G),
    and shall remain available until expended] 2000. (Department of
    Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          State grants:

    00.01   Grants to States................       3,066       3,866       3,811
    00.02   Preschool grants................         356         381         374
    00.03   Grants for infants and families.         367         488         370
                                               ---------   ---------  ----------
    00.91     Subtotal, State grants........       3,789       4,734       4,555
          National activities:

    01.01   State improvement...............          27          35          45
    01.02   Research and innovation.........          63          64          64
    01.03   Technical assistance and
              dissemination.................          34          45          45
    01.04   Personnel preparation...........          81          82          82
    01.05   Parent information centers......          16          19          21
    01.06   Technology and media services...          30          34          34
                                               ---------   ---------  ----------
    01.91     Subtotal, National activities.         251         279         292
                                               ---------   ---------  ----------
    10.00   Total obligations...............       4,040       5,014       4,846
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......         202         203
    22.00 New budget authority (gross)......       4,036       4,811       4,846
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           5
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       4,243       5,014       4,846
    23.95 New obligations...................      -4,040      -5,014      -4,846
    24.40 Unobligated balance available, end
            of year: Uninvested.............         203
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................       4,036       4,811       4,846
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       4,055       4,778       5,980
    73.10 New obligations...................       4,040       5,014       4,846
    73.20 Total outlays (gross).............      -3,305      -3,812      -4,325
    73.40 Adjustments in expired accounts...          -5
    73.45 Adjustments in unexpired accounts.          -5
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       4,778       5,980       6,501
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         161         241         242
    86.93 Outlays from current balances.....       3,144       3,572       4,083
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       3,305       3,812       4,325
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       4,036       4,811       4,846
    90.00 Outlays...........................       3,305       3,812       4,325
    ---------------------------------------------------------------------------

        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.
            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.

    [[Page 326]]

            The goal of both of these programs is to improve results for
        children with disabilities by assisting State and local educational
        agencies to provide children with disabilities with access to high
        quality education that will help them meet challenging standards and
        prepare them for employment and independent living.
            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, and their families.
            The goal of this program is to help States provide a
        comprehensive system of early intervention services that will
        enhance family and child outcomes.

        National activities.--These activities include research,
    demonstration, personnel preparation, technical assistance, grants to
    States to promote systems change, and other activities to support State
    efforts to improve results for children with disabilities under the
    State grants programs.

        The goal of National activities is to link States, school systems,
    and families to best practices to improve results for infants, toddlers,
    and children with disabilities.

        Performance data related to these goals include:

                                             1997 actual   1998 est.   1999 est.
    Number of children served on December 1
        of fiscal year:
      Ages 3 through 21.....................   5,806,000   5,951,000   6,070,000
      Ages 3 through 5......................     561,748     575,800     590,200
      Birth through 2.......................     187,348     196,700     204,600

                                        1992-1993 ac1993-1994 actual  1994-1995
                                                                          actual
        Educational Environment
    Children ages 3 through 21 provided
        special education in:
      Regular classrooms....................   2,051,166   2,300,956   2,419,665
      Resource rooms........................   1,512,717   1,445,525   1,451,297
      Separate classes......................   1,219,867   1,232,312   1,249,684
      Separate schools......................     204,764     192,112     175,303
      Residential facilities................      40,466      37,299      36,028
        Status of Exiting Students
    Graduated with a diploma................     103,801     113,945     118,471
    Graduated through certification.........      34,732      23,948      25,106
    Reached maximum age.....................       5,096       4,594       3,954
    Dropped out of school...................          NA      76,608      77,364
    Status unknown..........................          NA      42,460      54,659
        NA--Not available due to changes in data collection form.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           6           6           6
    25.5  Research and development contracts           1           1           1
    41.0  Grants, subsidies, and
            contributions...................       4,033       5,007       4,839
                                               ---------   ---------  ----------
    99.9    Total obligations...............       4,040       5,014       4,846
    ---------------------------------------------------------------------------

                 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, $2,591,195,000.] (Department of Education
    Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-0-1-506      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.01   Vocational rehabilitation State
              grants........................       2,176       2,247
    00.02   Client assistance State grants..          10          10
    00.03   Training........................          40          40
    00.04   Special demonstration programs..          20          16
    00.05   Migratory workers...............           2           2
    00.06   Recreational programs...........           3           3
    00.07   Protection and advocacy.........           7          10
    00.08   Projects with industry..........          22          22
    00.09   Supported employment State
              grants........................          38          38
    00.10   Independent living..............          75          78
    00.11   Program improvement.............           2           3
    00.12   Evaluation......................           2           2
    00.13   Helen Keller National Center....           7           7
    00.14   National Institute on Disability
              and Rehabilitation Research...          70          77
    00.15   Assistive technology............          36          36
    09.01 Reimbursable program..............           2
                                               ---------   ---------  ----------
    10.00   Total obligations...............       2,512       2,591
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           1
    22.00 New budget authority (gross)......       2,511       2,591
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,512       2,591
    23.95 New obligations...................      -2,512      -2,591
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       2,509       2,591
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       2,511       2,591
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         951         997       1,073
    73.10 New obligations...................       2,512       2,591
    73.20 Total outlays (gross).............      -2,464      -2,515        -966
    73.40 Adjustments in expired accounts...          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         997       1,073         107
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       1,647       1,814
    86.93 Outlays from current balances.....         815         701         966
    86.97 Outlays from new permanent
            authority.......................           1
    86.98 Outlays from permanent balances...           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,464       2,515         966
    ----------------------------------------------------------------------------

        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..................       2,509       2,591
    90.00 Outlays...........................       2,462       2,515         966
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................       2,509       2,591
      Outlays...........................       2,462       2,515         966
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                               2,645
      Outlays...........................                               1,852
                                        ------------------------------------
    Total:
      Budget Authority..................       2,509       2,591       2,645
      Outlays...........................       2,462       2,515       2,818
                                        ====================================

        Legislation to reauthorize the expired Rehabilitation Act and the
    Helen Keller National Center Act is pending. The Administration supports
    amending the Rehabilitation Act and will be working with Congress to
    incorporate amendments into pending legislation. The Administration will
    propose legislation to reauthorize the expiring Technology-Related
    Assistance for Individuals with Disabilities Act. When new legislation
    is enacted, resources for these programs will be requested. See the
    legislative proposal schedule for additional details.

    [[Page 327]]

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-0-1-506      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           7           7
    25.2    Other services..................           1           1
    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.................       2,500       2,581
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       2,510       2,591
    99.0  Reimbursable obligations..........           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............       2,512       2,591
    ---------------------------------------------------------------------------

                 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Vocational rehabilitation State
            grants..........................                               2,304
    00.02 Client assistance State grants....                                  11
    00.03 Training..........................                                  34
    00.04 Special demonstration programs....                                  19
    00.05 Migratory workers.................                                   2
    00.06 Recreational programs.............                                   3
    00.07 Protection and advocacy...........                                  10
    00.08 Projects with industry............                                  22
    00.09 Supported employment State grants.                                  38
    00.10 Independent living................                                  79
    00.11 Program improvement...............                                   2
    00.12 Evaluation........................                                   2
    00.13 Helen Keller National Center......                                   8
    00.14 National Institute on Disability
            and Rehabilitation Research.....                                  81
    00.15 Assistive technology..............                                  30
                                               ---------   ---------  ----------
    10.00   Total obligations...............                               2,645
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               2,645
    23.95 New obligations...................                              -2,645
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                               2,645
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                               2,645
    73.20 Total outlays (gross).............                              -1,852
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                 793
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                               1,852
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               2,645
    90.00 Outlays...........................                               1,852
    ---------------------------------------------------------------------------

        Vocational rehabilitation State grants.--The basic State grants
    program provides Federal matching funds to State vocational
    rehabilitation (VR) agencies to assist individuals with physical or
    mental impairments to become gainfully employed. Services are tailored
    to the specific needs of the individual. Priority is given to serving
    those with the most severe disabilities. Current law requires that
    between 0.5 percent and 1.5 percent of the funds appropriated for the VR
    State grants program must be set aside for Grants for Indians.

        The Department supports amending the Rehabilitation Act to require
    State VR agencies to develop challenging State-specific goals based on a
    comprehensive assessment of the vocational rehabilitation needs of
    individuals with disabilities in their State. The State must also
    describe the strategies it will use to achieve its goals and report on
    its progress on an annual basis.

        The table below presents national data on selected performance
    measures for the VR State grants program. The data is based on the
    number of individuals receiving services whose service records were
    closed in fiscal years 1995 (346,861) and 1996 (351,525).

                       CONSUMER OUTCOMES (CASES CLOSED)

                                              1995 actual     1996 actual
    Individuals achieving employment
     outcomes...............................       209,433         213,520
     Percent with severe disabilities.......            76              78
    Employment outcomes as a percent all of
     individuals receiving services.........            60              61

        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. The Department supports amending this program to authorize
    replication dissemination, and utilization projects and activities
    directed at State systemic change.

        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 achieve consumer-determined independent living goals.

        Program improvement.--Funds are used to promote broadbased 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.

    [[Page 328]]

        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 conducting and disseminating research aimed at
    improving the lives of individuals with disabilities.

        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.

        In accordance with the Government Performance and Results Act
    (GPRA), annual performance plans, linked to the strategic plan, have
    been developed for program activities included under this account that
    focus on increased employment, earnings, and self-sufficiency for
    individuals with disabilities. The plans include specific outcome
    measures that are designed to increase program effectiveness,
    efficiency, and consumer satisfaction. Plans also include strategies for
    identifying programs that are performing below expectations and offering
    assistance to improve program performance.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-2-1-506      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..                                   7
    25.2  Other services....................                                   1
    25.3  Purchases of goods and services
            from Government accounts........                                   1
    25.5  Research and development contracts                                   1
    41.0  Grants, subsidies, and
            contributions...................                               2,635
                                               ---------   ---------  ----------
    99.9    Total obligations...............                               2,645
    ---------------------------------------------------------------------------

               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.), [$8,186,000] $8,256,000. (Department of Education
    Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0600-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................           7           8           8
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           7           8           8
    23.95 New obligations...................          -7          -8          -8
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................           7           8           8
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           2           2           1
    73.10 New obligations...................           7           8           8
    73.20 Total outlays (gross).............          -7          -9          -8
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           2           1           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           5           8           8
    86.93 Outlays from current balances.....           2           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           7           9           8
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           7           8           8
    90.00 Outlays...........................           7           9           8
    ---------------------------------------------------------------------------

        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 1997, the portion of the Federal appropriation
    allocated to educational materials represented approximately 36 percent
    of the Printing House's total sales. The full appropriation represented
    approximately 30 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.),
    [$44,141,000] $44,791,000: 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, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0601-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................          43          44          45
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          43          44          45
    23.95 New obligations...................         -43         -44         -45
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          43          44          45
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...                                   2
    73.10 New obligations...................          43          44          45
    73.20 Total outlays (gross).............         -43         -42         -45
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                       2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          43          42          42
    86.93 Outlays from current balances.....                                   2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          43          42          45
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          43          44          45
    90.00 Outlays...........................          43          42          45
    ---------------------------------------------------------------------------

        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 1997, Federal appropriations
    represented 82 percent of the Institute's operating budget. The
    Institute may use appropriated funds for the Endowment Grant program.
    The request also includes funds for construction.

                              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.), [$81,000,000] $83,480,000: 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, 1998.)

    [[Page 329]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0602-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................          79          81          83
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          79          81          83
    23.95 New obligations...................         -79         -81         -83
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          79          81          83
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           2           2           6
    73.10 New obligations...................          79          81          83
    73.20 Total outlays (gross).............         -79         -77         -84
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           2           6           5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          79          76          78
    86.93 Outlays from current balances.....                       1           6
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          79          77          84
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          79          81          83
    90.00 Outlays...........................          79          77          84
    ---------------------------------------------------------------------------

        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 high school age
    students who are deaf. 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 1997, the Federal appropriation represented 63.5 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, the Adult
    Education Act, and the National Literacy Act of 1991, $1,507,698,000, of
    which $1,504,598,000 shall become available on July 1, 1998 and shall
    remain available through September 30, 1999; and of which $5,491,000
    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, $13,497,000 shall be
    used by the Secretary for national programs under title IV, without
    regard to section 451: Provided further, That the Secretary may reserve
    up to $4,998,000 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, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Vocational education:

            Annual appropriations:
              Basic grants:
    00.01       Basic State grants..........         998       1,010
    00.02       Territorial set-aside.......           2           3
    00.03       Indian and Hawaiian natives
                  set-aside.................          15          31
                                               ---------   ---------  ----------
    00.91         Subtotal, basic grants....       1,015       1,044
    01.01     Tech-prep education...........         100         103
    01.02     National programs.............           5          27
    01.03     Tribally controlled
                postsecondary vocational
                institutions................           3           3
                                               ---------   ---------  ----------
    02.00       Total, annual appropriation.       1,123       1,177
    03.01     Permanent appropriation.......           7
                                               ---------   ---------  ----------
    04.00       Total, vocational education.       1,130       1,177
            Adult education:
    05.01     State grants..................         342         345
    05.02     Evaluation and technical
                assistance..................           2          10
    05.03     National Institute for
                Literacy....................           5          10
    05.05     Literacy programs for
                prisoners...................           5          10
                                               ---------   ---------  ----------
    05.91     Total, adult education........         354         375
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,484       1,552
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          34          44
    22.00 New budget authority (gross)......       1,494       1,508
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,528       1,552
    23.95 New obligations...................      -1,484      -1,552
    24.40 Unobligated balance available, end
            of year: Uninvested.............          44
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       1,487       1,508
          Permanent:

    60.00   Appropriation...................           7
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,494       1,508
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       1,654       1,735       1,949
    73.10 New obligations...................       1,484       1,552
    73.20 Total outlays (gross).............      -1,402      -1,338      -1,420
    73.40 Adjustments in expired accounts...          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       1,735       1,949         529
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          81          77
    86.93 Outlays from current balances.....       1,314       1,255       1,418
    86.98 Outlays from permanent balances...           7           6           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,402       1,338       1,420
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,494       1,508
    90.00 Outlays...........................       1,402       1,338       1,420
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................       1,494       1,508
      Outlays...........................       1,402       1,338       1,420
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                               1,544
      Outlays...........................                                  78
                                        ------------------------------------
    Total:
      Budget Authority..................       1,494       1,508       1,544

    [[Page 330]]

      Outlays...........................       1,402       1,338       1,498
                                        ====================================

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

                            [In millions of dollars]

                                         1997 actual  1998 est.   1999 est.
    1. Vocational education:
        a. Basic grants.................       1,016       1,028
        b. Tech-prep education..........         100         103
        c. Tribally controlled
          postsecondary vocational
          institutions..................           3           3
        d. National programs............          13          13
        e. Permanent appropriation......           7           0
    2. Adult education:
        a. State programs...............         340         345
        b. Evaluation and technical
          assistance....................           5           5
        c. National Institute for
          Literacy......................           5           5
        d. Literacy programs for
          prisoners.....................           5           5
                                        ------------------------------------
              Total.....................       1,494       1,508
                                        ====================================

        Vocational and adult education.--In 1997, 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. Absent new authorizing legislation, Congress
    extended the authority of the Perkins Act, the Adult Education Act, and
    the National Literacy Act through the 1998 appropriations act. The 1999
    budget request is proposed under pending legislation.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............           1           1
    25.1  Advisory and assistance services..           1           1
    25.2  Other services....................           1           1
    25.5  Research and development contracts           1           1
    41.0  Grants, subsidies, and
            contributions...................       1,479       1,548
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       1,483       1,552
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,484       1,552
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          11          10
    ---------------------------------------------------------------------------

                         Vocational and Adult Education

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-2-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Vocational education:

            Annual appropriations:
              Basic grants:
    00.01       Basic State grants..........                               1,011
    00.02       Indian and Hawaiian natives
                  set-aside.................                                  20
                                               ---------   ---------  ----------
    00.91         Subtotal, basic grants....                               1,031
    01.01     Tech-prep education...........                                 106
    01.02     Vocational national programs..                                  13
                                               ---------   ---------  ----------
    02.00       Total, vocational education.                               1,150
              Adult education:
    03.01       State grants................                                 361
    03.02       Evaluation and technical
                  assistance................                                  27
    03.03       National Institute for
                  Literacy..................                                   6
                                               ---------   ---------  ----------
    03.91         Total, adult education....                                 394
                                               ---------   ---------  ----------
    10.00   Total obligations...............                               1,544
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               1,544
    23.95 New obligations...................                              -1,544
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                               1,544
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                               1,544
    73.20 Total outlays (gross).............                                 -78
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                               1,466
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                  78
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               1,544
    90.00 Outlays...........................                                  78
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under pending legislation to restructure the Carl D. Perkins Vocational
    and Applied Technology Education Act, and Adult Education Act, and the
    National Literacy Act, as part of a broad framework for enabling
    lifelong learning and economic security for all Americans.

        Vocational education.--The proposal would consolidate over a dozen
    programs into a grant for States, Territories, and Indian programs
    focused on preparing in-school youth for good jobs and further education
    and training. The proposal would continue to provide grants to States
    for Tech-Prep Education to promote links between secondary and
    postsecondary institutions and facilitate the integration of academic
    and vocational education. These State grant and Tech-Prep programs would
    support State and local reforms begun under the School-to-Work
    Opportunities Act. In addition, a national programs authority would
    support research, development, evaluations, demonstrations, and other
    initiatives.

        Adult education and family literacy.--To provide adults with
    opportunities to succeed in their roles as parents, citizens, and
    learners, the Administration proposes to consolidate multiple adult
    education and literacy programs into a unified State grant. Each State
    would have the flexibility to support family literacy, adult secondary
    education, adult basic education, and English-as-a-second language
    programs according to its needs and objectives. The Department of
    Education would support State efforts through a new national programs
    authority that would focus on quality improvement, the use of
    interactive technology and distance learning, professional development
    for volunteers and teachers, and capacity building.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-2-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............                                   1
    25.1  Advisory and assistance services..                                   1
    25.2  Other services....................                                   1
    25.5  Research and development contracts                                   1
    41.0  Grants, subsidies, and
            contributions...................                               1,540
                                               ---------   ---------  ----------
    99.9    Total obligations...............                               1,544
    ---------------------------------------------------------------------------

    [[Page 331]]

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0400-2-1-501      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......                                  10
    ---------------------------------------------------------------------------

                        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, part F, part G, and part H of title IV of the Higher
    Education Act of 1965, as amended, [$8,978,934,000] $9,203,000,000,
    which shall remain available through September 30, [1999] 2000.
        The maximum Pell Grant for which a student shall be eligible during
    award year [1998-1999] 1999-2000 shall be [$3,000] $3,100: 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
    [1997] 1998 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 if the Secretary determines that the funds available to
    fund Pell Grants for award year 1998-1999 exceed the amount needed to
    fund Pell Grants at a maximum award of $3,000 for that award year, the
    Secretary may increase the income protection allowances in sections
    475(g)(2)(D), and 476(b)(1)(A)(iv) (I), (II), and (III) up to the
    amounts at which Pell Grant awards calculated using the increased income
    protection allowances equal the funds available to make Pell Grants in
    award year 1998-1999 with a $3,000 maximum award, except that the income
    protection allowance in section 475(g)(2)(D) may not exceed $2,200, the
    income protection allowance in sections 476(b)(1)(A)(iv)(I) and (II) may
    not exceed $4,250, and the income protection allowance in section
    476(b)(1)(A)(iv)(III) may not exceed $7,250] Provided further, That
    notwithstanding part F of the Higher Education Act, the income
    protection allowance in section 475(g)(2)(D) shall be $2,200, the income
    protection allowance in sections 476(b)(1)(A)(iv) (I) and (II) shall be
    $4,250, and the income protection allowance in section
    476(b)(1)(A)(iv)(III) shall be $7,250: Provided further, That Pell Grant
    funds shall not be awarded to a student who has received Pell Grants for
    a period in excess of 150 percent of the full-time equivalent of the
    period normally required for the completion of that student's course of
    study, except that a student may not receive Pell Grant funds for more
    than the full-time equivalent of eight academic years in the aggregate.
    Pell Grant funds may only be awarded to a student who has received Pell
    Grant funds for more than the full-time equivalent of eight academic
    years in the aggregate only if the institution determines that providing
    such funds is necessary to accommodate the rights of the student under
    section 504 of the Rehabilitation Act of 1973: Provided further, That
    none of the funds made available in this Act may be used to award
    student financial assistance under title IV of the Higher Education Act
    to students attending an institution of higher education that is
    ineligible to participate in a loan program authorized under parts B and
    D of such title as a result of a final default rate determination made
    by the Secretary, and issued by the Secretary on or after October 1,
    1998, except that this restriction shall not apply to an institution
    until it has had the opportunity to appeal its default rate
    determination under the appeal procedures provided at 34 CFR 668.17.
    This restriction shall not apply to an institution that was not
    participating in the loan programs authorized under part B or part D of
    title IV of the Higher Education Act on October 1, 1998, unless the
    institution subsequently participates in either such loan program.
    (Department of Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Federal Pell grants:

    01.01   Federal Pell grants.............       7,527       4,554       7,499
                                               ---------   ---------  ----------
    01.91     Subtotal, Pell grants.........       7,527       4,554       7,499
          Campus-based aid:

    02.01   Federal supplemental educational
              opportunity grants (SEOG).....         581         614         619
    02.02   Federal work-study..............         825         830         900
    02.03   Federal Perkins loans: Capital
              contributions.................         158         135         100
    02.05   Federal Perkins loans: Loan
              cancellations.................          24          30          30
                                               ---------   ---------  ----------
    02.91     Subtotal, Campus-based
                activities..................       1,588       1,609       1,649
    03.01 State student incentive grants....          50          25
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................       9,165       6,188       9,148
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......       3,617       2,150       4,941
    22.00 New budget authority (gross)......       7,560       8,979       9,243
    22.10 Resources available from
            recoveries of prior year
            obligations.....................         144
    22.30 Unobligated balance expiring......          -6
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      11,315      11,129      14,184
    23.95 New obligations...................      -9,165      -6,188      -9,148
    24.40 Unobligated balance available, end
            of year: Uninvested.............       2,150       4,941       5,036
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       7,560       8,979       9,203
          Permanent:

    62.00   Transferred from other accounts.                                  40
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       7,560       8,979       9,243
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       2,665       4,421       2,214
    73.10 New obligations...................       9,165       6,188       9,148
    73.20 Total outlays (gross).............      -7,248      -8,395      -9,068
    73.40 Adjustments in expired accounts...         -16
    73.45 Adjustments in unexpired accounts.        -144
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       4,421       2,214       2,294
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       1,364       1,996       2,104
    86.93 Outlays from current balances.....       5,884       6,399       6,961
    86.97 Outlays from new permanent
            authority.......................                                   4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       7,248       8,395       9,068
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       7,560       8,979       9,243
    90.00 Outlays...........................       7,248       8,395       9,068
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         207         141         158
    1251  Repayments: Repayments and
            prepayments.....................         -25         -31         -30
          Write-offs for default:

    1263    Direct loans....................          -5          -8          -8
    1264    Other adjustments, net..........         -36          56          55
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         141         158         175
    ---------------------------------------------------------------------------
        \1\ Includes in all years institutional matching share of defaulted
    notes assigned from institutions to the Education Department.

        Authorization of the Higher Education Act.--Absent new authorizing
    legislation, the Administration requests the Congress to extend the
    authority of the Student Financial Assistance programs through the end
    of 1999. The Department is about to put forth a comprehensive proposal
    to authorize

    [[Page 332]]

    the Higher Education Act into the next century. The Administration's
    authorization proposal for Student Financial Assistance focuses on (1)
    ensuring access to, and encouraging persistence and graduation in,
    postsecondary education; (2) modernizing and simplifying the Title IV
    delivery system; (3) supporting and improving two viable loan programs;
    and, (4) assuring accountability of Federal funds.

        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 appropriations act. The 1999 budget
    estimate reflects proposed changes to the Pell Grant program.

        The Administration is proposing a $100 increase in the maximum Pell
    Grant award to $3,100 for 1999; and to limit the duration of a student's
    eligibility for Pell Grant assistance to the full-time-equivalent of 150
    percent of the period normally required for the student to complete his
    or her program of study, with an absolute maximum of the full-time-
    equivalent of 8 years. Further, the Administration proposes to continue
    in 1999, the higher income protection allowances authorized by the 1998
    appropriations act of $2,200 for dependent students; $4,250 for single
    independent students without dependents; $4,250 per student for married
    independent students without dependents when both are in college; and
    $7,250 for married independent students without dependents when one is
    enrolled in college.

        Currently, only institutions with high default rates are terminated
    from participation in the Federal Family Education Loan and William D.
    Ford Federal Direct Loan programs. The Administration proposes to reduce
    waste and abuse in the student financial assistance programs by
    terminating the eligibility of these institutions not only for the loan
    programs, but also the Pell Grant program and the other title IV
    programs.

        Campus-based programs.--The Federal Supplemental Educational
    Opportunity Grants, Federal Work-Study, and Federal Perkins Loan
    programs are called the ``campus-based'' programs because participating
    institutions are responsible for administering the programs on their own
    campuses. These programs provide aid administrators with considerable
    flexibility in the packaging of financial aid awards to best meet the
    needs of students. The budget year estimates for the campus-based
    programs reflect funding under current law. Changes to the campus-based
    programs will be included in the Administration's proposal to authorize
    the Higher Education Act.

        Federal Supplemental Educational Opportunity Grants.--Federal funds
    are awarded by formula to qualifying institutions, which use these funds
    to award grants to undergraduate students. While institutions have
    discretion in awarding these funds, they are required to give priority
    to Pell Grant recipients and other students with exceptional need. The
    Federal share of such grants may not exceed 75 percent of the total
    grant.

        Federal Work-Study.--Federal funds are awarded by formula to
    qualifying institutions, which develop and provide part-time jobs for
    eligible undergraduate and graduate students with demonstrated need.
    Hourly earnings under the program must be at least equal to the Federal
    minimum wage. Federal funding in most cases pays 75 percent of a
    student's hourly wages, with the remaining 25 percent paid by the
    employer. The Secretary has waived the required 25 percent employer
    funding match for students working in the America Reads Challenge as
    reading tutors of children and in family literacy programs.

        Perkins Loan Program.--Institutions award low-interest loans from
    institutional revolving funds, which are comprised of Federal Capital
    Contributions, institutional matching funds, and student repayments on
    outstanding loans. The Administration is requesting $60 million in new
    budget authority to supplement these resources.

        As authorized by the Higher Education Act, the Department
    established the Perkins Loan Revolving Fund on September 15, 1997.
    Collections from assigned loans and audits will be deposited into this
    revolving fund and will be transferred to the Student Financial
    Assistance account in 1999 for redistribution to institutions, which
    will then use these funds to make new loans. The resources available
    from these new collections and new Federal Capital Contributions, in
    addition to the resources from borrower repayments on the outstanding
    loan portfolio to institutional revolving funds, will provide sufficient
    funding for over $1 billion in new Perkins Loans in 1999-2000.

        Perkins Loan Program--Cancellations.--Under the Perkins Loan
    cancellation program, institutional revolving funds are reimbursed for
    indebtedness canceled as a result of a borrower engaging in certain
    public service activities, as specified in the Higher Education Act. As
    the number of borrowers with loans eligible for these loan cancellation
    benefits is rising, the cost of providing these benefits has increased
    in recent years.

        Funding Tables.--The following tables display student aid funds
    available, the number of aid awards, average awards, and the
    unduplicated count of recipients from any Federal student aid program.
    The tables include the aid from programs in the Student Financial
    Assistance account, as well as aid from the Federal Family Education
    Loan (FFEL) program, and the William D. Ford Federal Direct Loan
    program. Loan amounts reflect the capital actually loaned, not the
    Federal cost of those loans. The data in these tables include the
    effects of matching funds wherever applicable. Amounts for 1999 include
    the impact of proposed changes.

          AID FUNDS AVAILABLE FOR POSTSECONDARY EDUCATION AND TRAINING

                            [In millions of dollars]

                                         1997 actual  1998 est.   1999 est.
    Pell grants.........................       6,256       7,404       7,574
    Student loans:
      Guaranteed student loans:
        Stafford loans..................      10,699      11,048      11,596
        Unsubsidized Stafford loans.....       6,755       7,542       8,263
        PLUS............................       1,708       1,871       2,073
      Direct student loans:
        Stafford loans..................       5,701       6,326       6,648
        Unsubsidized Stafford loans.....       3,242       3,849       4,212
        PLUS............................         895       1,030       1,142
      Consolidation:
        FFEL............................       3,836       4,043       4,261
        Direct Loans....................       1,333       2,531       1,855
                                        ------------------------------------
            Student loans, subtotal.....      34,169      38,240      40,050
    Work-study..........................       1,007       1,003       1,083
    Supplemental educational opportunity
    grants..............................         738         777         784
    Perkins loans.......................       1,058       1,058       1,058
    State student incentive grants......         100          50
                                        ------------------------------------
            Total aid available.........      43,329      48,531      50,549
                                        ====================================
        Note: Detail may not add to totals due to rounding.

                              NUMBER OF AID AWARDS

                                 [In thousands]

                                         1997 actual  1998 est.   1999 est.
    Pell grants.........................       3,683       3,909       3,913
    Student loans:
      Guaranteed student loans:
        Stafford loans..................       3,150       3,260       3,386
        Unsubsidized Stafford loans.....       1,799       1,999       2,136
        PLUS............................         276         300         321
      Direct student loans:
        Stafford loans..................       1,732       1,859       1,934
        Unsubsidized Stafford loans.....         979       1,073       1,145
        PLUS............................         153         161         172
      Consolidation:
        FFEL............................         195         201         207

    [[Page 333]]

        Direct Loans....................          85         124         100
                                        ------------------------------------
            Student loans, subtotal.....       8,369       8,977       9,400
      Work-study........................         945         942       1,017
      Supplemental educational
        opportunity grants..............         991       1,043       1,052
      Perkins loans.....................         788         788         788
      State student incentive grants....         167          83
                                        ------------------------------------
            Total awards................      14,943      15,742      16,171
                                        ====================================
        Note: Detail may not add to totals due to rounding.

                               AVERAGE AID AWARDS

                               [In whole dollars]

                                         1997 actual  1998 est.   1999 est.
    Pell grants.........................       1,699       1,894       1,936
    Student loans:
      Guaranteed student loans:
        Stafford loans..................       3,397       3,389       3,425
        Unsubsidized Stafford loans.....       3,755       3,772       3,869
        PLUS............................       6,182       6,233       6,458
      Direct student loans:
        Stafford loans..................       3,291       3,403       3,438
        Unsubsidized Stafford loans.....       3,310       3,586       3,679
        PLUS............................       5,865       6,390       6,624
      Consolidation:
        FFEL............................      19,678      20,137      20,606
        Direct Loans....................      16,514      21,453      19,446
    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

                            NUMBER OF STUDENTS AIDED

                                 [In thousands]

                                         1997 actual  1998 est.   1999 est.
    Unduplicated student count..........       8,065       8,524       8,825

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

                     ADMINISTRATIVE PAYMENTS TO INSTITUTIONS

                            [In millions of dollars]

                                         1997 actual  1998 est.   1999 est.
    Pell grants.........................          18          20          20
    Work-study..........................          63          63          68
    Supplemental educational opportunity
    grants..............................          30          31          31
    Perkins loans.......................          42          42          42

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

                             DEFAULTED PERKINS LOANS

                            [In millions of dollars]

                                         1997 actual  1998 est.   1999 est.
    Outstanding defaulted loans,
        beginning of year:
      Assigned defaulted loans \1\......         207         141         158
      Unassigned defaulted loans \2\....         819         881         949
    New defaulted loans.................         139         233         237
    Collections on assigned loans.......         -25         -31         -30
    Collections on unassigned loans.....         -90         -94         -98
    Write-offs for assigned loans.......          -5          -8          -8
    Write-offs for unassigned loans.....         -20         -15         -12
                                        ------------------------------------
    Outstanding defaulted loans, end of
    year................................       1,025       1,107       1,196
                                        ====================================
        \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 1997, $94 thousand in
    1998, and $94 thousand in 1999. 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, subpart 1 of part B, and part E of title
    X and title XI of the Higher Education Act of 1965, as amended, part G
    of title XV of Public Law 102-325,] the Mutual Educational and Cultural
    Exchange Act of 1961, [and Public Law 102-423; $946,738,000, of which
    $13,700,000 for interest subsidies under title VII of the Higher
    Education Act 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 new and noncompeting continuation awards for
    academic year 1998-1999 for fellowships awarded under part C of title IX
    of said Act, under the terms and conditions of part C: Provided further,
    That from the funds made available under Part A of title X of the Higher
    Education Act, $1,000,000 shall be awarded to the Advanced Technical
    Center at Mexico, Missouri for the delivery of technical education in
    cooperation with community colleges and State technical schools and
    $3,000,000 shall be for the delivery of technical education and distance
    learning at Empire State College in New York] $6,536,000. (Department of
    Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Aid for institutional development:

    00.01   Strengthening historically Black
              colleges and universities.....         128         143
    00.02   Strengthening institutions......          57          55
    00.03   Strengthening Hispanic serving
              institutions..................          11          12
    00.04   Endowment challenge grants......           7           1
                                               ---------   ---------  ----------
    00.91     Subtotal, aid for
                institutional development...         203         211
          Other aid for institutions:

    01.01   Program development.............          94          98           7
    01.02   Interest subsidy grants.........          15          17
    01.03   Special grants..................           8           7
                                               ---------   ---------  ----------
    01.91     Subtotal, other aid for
                institutions................         117         122           7
          Aid for students:

    02.01   Federal TRIO programs...........         500         530
    02.02   Advanced placement fees.........                       3
    02.03   Scholarships....................          33          43
    02.04   Graduate fellowships............          33          30
    02.05   State grants for incarcerated
              youth offenders...............                      12
                                               ---------   ---------  ----------
    02.91     Subtotal, aid for students....         566         618
                                               ---------   ---------  ----------
    10.00   Total obligations...............         886         951           7
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          12           4
    22.00 New budget authority (gross)......         879         947           7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         891         951           7
    23.95 New obligations...................        -886        -951          -7
    24.40 Unobligated balance available, end
            of year: Uninvested.............           4
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         879         947           7
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         942         936       1,032
    73.10 New obligations...................         886         951           7
    73.20 Total outlays (gross).............        -877        -855        -810
    73.40 Adjustments in expired accounts...         -15
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         936       1,032         230
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         103         128           1
    86.93 Outlays from current balances.....         774         727         809
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         877         855         810
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         879         947           7
    90.00 Outlays...........................         877         855         810
    ---------------------------------------------------------------------------
        Note.--Excludes $3 million in budget authority in 1999 for
    activities transferred to the Department of Education, Office of
    Elementary and Secondary Education, School Improvement Programs account.
    The comparable amount for 1998 ($3 million) is included above.

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................         879         947           7
      Outlays...........................         877         855         810
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                               1,282

    [[Page 334]]

      Outlays...........................                                 163
                                        ------------------------------------
    Total:
      Budget Authority..................         879         947       1,289
      Outlays...........................         877         855         973
                                        ====================================

        Other grants to institutions.--
            International education and foreign language studies overseas
        programs.--Funds support research and study opportunities in foreign
        countries for American graduate students, faculty members, and K-12
        teachers of foreign languages.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           1           1
    25.2  Other services....................           1           1
    25.3  Purchases of goods and services
            from Government accounts........           1           1
    41.0  Grants, subsidies, and
            contributions...................         882         948           7
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         885         951           7
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............         886         951           7
    ---------------------------------------------------------------------------

                                Higher Education

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-2-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Aid for institutional development:

    00.01   Strengthening historically Black
              colleges and universities.....                                 160
    00.02   Strengthening institutions......                                  60
    00.03   Strengthening Hispanic-serving
              institutions..................                                  28
    00.04   Strengthening tribal colleges
              and universities..............                                   5
    00.05   Minority science improvement....                                   8
                                               ---------   ---------  ----------
    00.91     Subtotal, aid for
                institutional development...                                 260
          Other aid for institutions:

    01.01   Fund for the Improvement of
              Postsecondary Education.......                                  22
    01.02   International education and
              foreign language studies......                                  54
    01.03   Teacher recruitment and
              preparation...................                                  67
    01.04   Interest subsidy grants.........                                  13
                                               ---------   ---------  ----------
    01.91     Subtotal, other aid for
                institutions................                                 156
          Aid for students:

    02.01   Federal TRIO programs...........                                 583
    02.02   College-school partnerships.....                                 140
    02.03   Byrd honors scholarships........                                  39
    02.04   National need graduate
              fellowships...................                                  38
    02.05   Early awareness information.....                                  15
    02.06   Learning Anytime Anywhere
              Partnerships..................                                  30
    02.07   Access and retention innovations                                  20
                                               ---------   ---------  ----------
    02.91     Subtotal, aid for students....                                 865
                                               ---------   ---------  ----------
    10.00   Total obligations...............                               1,282
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               1,282
    23.95 New obligations...................                              -1,282
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                               1,282
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                               1,282
    73.20 Total outlays (gross).............                                -163
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                               1,119
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 163
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               1,282
    90.00 Outlays...........................                                 163
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under proposed legislation to revise and reauthorize programs currently
    included under the Higher Education Act of 1965, as amended (HEA).

        Aid for institutional development.--
            Strengthening historically Black colleges and universities.--
        Funds will support grants to help historically Black undergraduate
        and graduate institutions to improve and expand their capacity to
        serve students, and to strengthen management and fiscal operations.
            Strengthening institutions.--Funds will 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 will support
        Hispanic-serving institutions to enable them to improve and expand
        their capacity to serve students.
            Strengthening Tribal colleges and universities.--Funds will
        support a new program to strengthen Tribal colleges and universities
        with scarce resources that have been serving increasing numbers of
        Native American students.
            Minority science improvement.--Funds will support the
        improvement of science education at predominantly minority
        institutions.

        Other aid for institutions.--
            Funds for the improvement of postsecondary education.--Funds
        will support flexible, field-initiated postsecondary improvement
        projects in a broad range of activities, as well as 5 special focus
        programs.
            International education and foreign language studies programs.--
        Funds will support 9 programs that promote the development and
        improvement of postsecondary international and foreign language
        programs.
            Teacher recruitment and preparation.--Funds will support a new
        program to help recruit and prepare high-quality elementary and
        secondary school teachers, particularly teachers representative of
        minority populations, for work in under-served areas. The program
        will fund mutually beneficial partnerships between institutions of
        higher education and local schools. Schools will provide hands on
        experience to student teachers, while colleges will provide a steady
        supply of well-prepared teachers to meet local needs. Funding will
        also assist in the development and dissemination of best practices
        in teacher preparation at postsecondary institutions.
            Interest subsidy grants.--Funds will meet mandatory interest
        subsidy costs of construction loan commitments made prior to 1974.

        Assistance for students.--
            Federal TRIO programs.--Funds will support academic, counseling,
        and outreach services under 5 programs to help disadvantaged
        students succeed in school and college.
            College-school partnerships.--Funds will support a new program
        to increase secondary school achievement and college enrollment
        among children in low-income communities.
            Byrd honors scholarships.--Funds will support postsecondary
        scholarships for outstanding high school students who show promise
        of continued academic excellence.
            National need graduate fellowships.--Funds will support a new
        consolidated graduate education program to help re

    [[Page 335]]

        cruit and prepare high-quality individuals for postsecondary
        academic careers in areas of national need, particularly in those
        fields where women, persons of minority populations, and individuals
        with disabilities are under-represented.
            Early awareness information.--Funds will support a national
        information campaign to publicize the availability of student
        financial aid, and to encourage young students and families to
        prepare for postsecondary education.
            Learning Anytime Anywhere Partnerships.--Funds will support
        pilot projects using technology to promote and enhance lifelong
        learning.
            Access and retention innovations.--Funds will support a new
        program to conduct field experiments to identify innovative ways to
        improve postsecondary education access and retention for low-income
        and minority students.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-2-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..                                   1
    25.2  Other services....................                                   1
    25.3  Purchases of goods and services
            from Government accounts........                                   1
    41.0  Grants, subsidies, and
            contributions...................                               1,278
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..                               1,281
    99.5  Below reporting threshold.........                                   1
                                               ---------   ---------  ----------
    99.9    Total obligations...............                               1,282
    ---------------------------------------------------------------------------

                                Howard University

        For partial support of Howard University (20 U.S.C. 121 et seq.),
    $210,000,000[: 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, shall be for a matching
    endowment grant pursuant to the Howard University Endowment Act (Public
    Law 98-480), of which $3,530,000 shall remain available until expended.
    (Department of Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0603-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 General support...................         166         181         181
    00.02 Howard University Hospital........          29          29          29
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................         195         210         210
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         196         210         210
    23.95 New obligations...................        -195        -210        -210
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         196         210         210
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           9           5          13
    73.10 New obligations...................         195         210         210
    73.20 Total outlays (gross).............        -199        -202        -210
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           5          13          13
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         191         197         197
    86.93 Outlays from current balances.....           8           5          13
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         199         202         210
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         196         210         210
    90.00 Outlays...........................         199         202         210
    ---------------------------------------------------------------------------

        Howard University is a private, nonprofit educational institution
    consisting of 12 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.

                           Perkins Loan Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4248-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Collection costs..................                       5           5
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              25.2).........................                       5           5
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......                       1          41
    22.00 New budget authority (gross)......           1          45           5
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           1          46          46
    23.95 New obligations...................                      -5          -5
    24.40 Unobligated balance available, end
            of year: Uninvested.............           1          41          41
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    61.00 Transferred to other accounts.....                                 -40
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           1          45          45
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................           1          45           5
    ----------------------------------------------------------------------------

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

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                       3           3
    86.98 Outlays from permanent balances...                                   2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........                       3           5
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....          -1         -45         -45
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 -40
    90.00 Outlays...........................          -1         -42         -40
    ---------------------------------------------------------------------------

        Net receipts from the net collections on Perkins loans assigned to
    the Department, and other receipts in the program will be deposited into
    the Perkins Loans Revolving Fund and will be transferred to the Student
    Financial Assistance account for redistribution to institutions, which
    will then use these funds to make new loans.

    Credit accounts:

              Federal Direct Student Loan Program, Program Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    02.01 Direct loan subsidy...............         354         265         494
    02.02 Upward reestimates of subsidy.....         116         161
    02.03 Interest on upward reestimate.....          12          57
                                               ---------   ---------  ----------
    02.91   Subtotal, subsidy cost..........         482         483         494
    07.09 Student loan administrative
            expenses........................         491         532         610
                                               ---------   ---------  ----------

    [[Page 336]]

    10.00   Total obligations...............         973       1,015       1,104
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......                       2           2
    22.00 New budget authority (gross)......         973       1,015       1,104
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         975       1,017       1,106
    23.95 New obligations...................        -973      -1,015      -1,104
    24.40 Unobligated balance available, end
            of year: Uninvested.............           2           2           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.00 Appropriation.....................         491         532         610
    60.05 Appropriation (indefinite)........         271         388         494
                                               ---------   ---------  ----------
    63.00   Appropriation (total)...........         762         920       1,104
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............         211          95
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         973       1,015       1,104
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         220         322         301
    73.10 New obligations...................         973       1,015       1,104
    73.20 Total outlays (gross).............        -870      -1,036        -972
    73.45 Adjustments in unexpired accounts.          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         322         301         433
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         672         765         741
    86.98 Outlays from permanent balances...         198         271         230
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         870       1,036         972
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -211         -95
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         762         920       1,104
    90.00 Outlays...........................         659         941         972
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................         762         920       1,104
      Outlays...........................         659         941         971
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                  31
      Outlays...........................                                  20
                                        ------------------------------------
    Total:
      Budget Authority..................         762         920       1,135
      Outlays...........................         659         941         991
                                        ====================================

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

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Stafford..........................       6,255       6,933       7,283
    1150  Unsubsidized Stafford.............       3,629       4,302       4,708
    1150  PLUS..............................       1,089       1,253       1,389
    1150  Consolidated......................       1,428       2,711       1,987
                                               ---------   ---------  ----------
    1159    Total direct loan levels........      12,400      15,199      15,367
        Direct loan subsidy (in percent):
    1320  Stafford..........................       11.97       12.62       13.79
    1320  Unsubsidized Stafford.............       -8.64      -10.75       -7.78
    1320  PLUS..............................       -7.69       -9.91       -9.49
    1320  Consolidated......................       -1.31       -0.86       -0.61
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...        2.95        1.74        3.22
        Direct loan subsidy budget authority:
    1330  Stafford..........................         750         875       1,004
    1330  Unsubsidized Stafford.............        -300        -463        -366
    1330  PLUS..............................         -80        -124        -132
    1330  Consolidated......................         -16         -23         -12
    1330  Reestimates of subsidy............         -83         123
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..         271         388         494
        Direct loan subsidy outlays:
    1340  Stafford..........................         603         857         885
    1340  Unsubsidized Stafford.............        -254        -407        -350
    1340  PLUS..............................         -58        -100        -107
    1340  Consolidated......................         -15         -21         -11
    1340  Reestimates of subsidy............         -83         123
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........         193         452         417
    ----------------------------------------------------------------------------

        Student loan administrative expense data:
    3510  Budget authority..................         491         532         610
    3590  Outlays...........................         466         489         554
    ---------------------------------------------------------------------------

        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 improving the
    efficiency of both programs and 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 1999
    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 1997, the FFEL program has
    provided over $240 billion in loans to postsecondary students and their
    parents. Since beginning on July 1, 1994, the Direct Loan program has
    provided almost $24 billion in new loans to students and parents. Taken
    together, the FFEL and Direct Loan programs will make almost $32 billion
    in new loans available in 1998. 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

    [[Page 337]]

    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 31 percent of
    overall volume in academic year 1995-1996, and is expected to account
    for 35 percent in academic year 1997-1998. 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. In the FFEL program, interest on
    Unsubsidized Stafford loans may be capitalized no more than quarterly,
    and upon entering repayment. In the Direct Loan program, interest on
    these loans is capitalized only upon entering repayment. The President
    is proposing to require FFEL lenders and loan holders to capitalize
    interest only upon entering repayment. 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, current law requires that the interest rate
    for new Stafford and Unsubsidized Stafford loans equal the Department's
    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.

        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.
    Borrowers holding one or more underlying Direct Loans may only
    consolidate in the Direct Loan program. The portion of Direct
    Consolidation loans made up of underlying Stafford and Unsubsidized
    Stafford loans carry the variable Stafford interest rate; the portion
    made up of underlying PLUS loans carry the variable PLUS interest rate.
    For FFEL Consolidation loans, 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 up to the nearest whole percent. Lenders
    may choose to offer a lower rate.

        The Emergency Student Loan Consolidation Act of 1997, which was
    included in the Department's 1998 appropriations act, temporarily
    changed a number of laws affecting Consolidation loans. Under this act,
    which is in effect until October 1, 1998, Direct Loan borrowers may
    consolidate their loans into the FFEL program, interest rates for FFEL
    Consolidation loans are calculated in the same way as is done for Direct
    Consolidation loans, and borrowers whose FFEL Consolidation loans
    include underlying Stafford loans 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
    and reduce the Direct Loan origination fee from 4 percent to 3 percent
    in 1999. The President is also proposing to further reduce fees for
    need-based (Stafford) loans in both FFEL and Direct Loans to 2 percent
    in 2001 and 1 percent in 2002, and to eliminate origination fees for all
    Stafford loans beginning in 2003. 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. In addition,
    loans made under both programs are discharged in cases where borrowers
    die, are totally and permanently disabled, or declare bankruptcy. Given
    the broad availability of income-contingent repayment, economic hardship
    deferments, and other flexible repayment options, the President is
    proposing to eliminate bankruptcy-related loan discharges.

        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. Income-
    contingent repayment as offered through Direct Loans--under which the
    Department has access to income data provided by the Internal Revenue
    Service--may 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 an 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. The President is also proposing to reduce
    special allowance payments on loans funded through tax-exempt
    securities.

        The President is proposing a number of changes to address serious
    structural problems with the FFEL default prevention system.
    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 delin

    [[Page 338]]

    quent 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, approximately the rate paid on
    loans collected by the Department of Education through competitively
    awarded contracts.

        The President is proposing a number of changes to the guaranty
    agency system. The U.S. General Accounting Office and Federal courts
    have acknowledged that the Federal government is the actual guarantor of
    FFEL program loans, with State and non-profit guaranty agencies acting
    as agents administering this Federal guarantee. In keeping with this
    relationship, the President is proposing to restructure the current
    guaranty agency system on a fee-for-service model. Under this approach,
    lender default claims will be paid with direct Federal payments, rather
    than by Federal funds held by guaranty agencies for that purpose. As a
    result of this change, guaranty agencies will no longer need to hold
    Federal funds in reserve, making possible the return of $1.1 billion in
    reserve funds over five years. (Agencies are already scheduled to return
    $1 billion in reserve funds in 2002 under the provisions of the Balanced
    Budget Act of 1997.)

        The President is also proposing to replace current statutorily set
    administrative cost allowances to guaranty agencies with fees paid on
    new and outstanding loans administered by each agency. 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 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. Discretionary
    funds requested for the FFEL program support additional Department
    personnel and administrative activities associated with operating the
    program.

        Performance indicators have been 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)

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    Budget Authority:
    FFEL:
      Liquidating \1\.......................     745,336
      Program \2\...........................   3,144,260   1,988,127   1,938,815
      Reestimate of Prior Year Cost \2\.....      98,058
                                               ---------   ---------  ----------
        Subtotal, FFEL \2\..................   3,987,655   1,988,127   1,938,815
    Direct Loans:
      Program \2\...........................     370,713     288,072     540,185
      Reestimate of Prior Year Cost \2\.....      82,157     123,190
                                               ---------   ---------  ----------
        Subtotal, Direct Loans \2\..........     288,556     411,262     540,185
    Consolidation Loans:
      FFEL..................................      46,760    -142,525    -174,498
      Direct Loans..........................     -16,509     -23,185     -14,701
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......      30,251    -165,710    -189,200
    Administration:
      FFEL \3\..............................      46,482      46,482      48,482
      Student Aid \4\.......................     491,000     532,000     610,000
                                               ---------   ---------  ----------
        Subtotal, Administration............     537,482     578,482     658,482
        Total, FFEL and Direct Loans........   4,843,944   2,812,161   2,948,283
    Outlays:
    FFEL:
      Liquidating \1\.......................     371,807    -189,735    -551,098
      Program \2\...........................   2,756,188   2,255,290   1,820,226
      Reestimate of Prior Year Costs \2\....      98,058
                                               ---------   ---------  ----------
        Subtotal, FFEL \2\..................   3,226,053   2,065,555   1,269,128
    Direct Loans:
      Program \2\...........................     291,275     349,988     450,745
      Reestimate of Prior Year Costs \2\....     -82,157     123,190
                                               ---------   ---------  ----------
        Subtotal, Direct Loans \2\..........     209,118     473,178     450,745
    Consolidation Loans:
      FFEL..................................      46,714    -142,318    -174,245
      Direct Loans..........................     -15,394     -20,899     -13,252
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......      31,321    -163,216    -187,497
    Administration:
      FFEL \3\..............................      41,067      44,606      46,205
      Student Aid \4\.......................     465,796     488,749     554,596
                                               ---------   ---------  ----------
        Subtotal, Administration............     506,863     533,355     600,801
        Total, FFEL and Direct Loans........   3,973,355   2,908,872   2,133,177
    ---------------------------------------------------------------------------
        \1\ Liquidating account reflects loans made prior to 1992.
        \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\

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................      10,699      11,048      11,596
      Unsubsidized Stafford.................       6,755       7,542       8,263
      PLUS..................................       1,708       1,871       2,073
                                               ---------   ---------  ----------
        Total, FFEL.........................      19,162      20,461      21,932
    Direct Loans:
      Stafford..............................       5,701       6,326       6,648
      Unsubsidized Stafford.................       3,242       3,849       4,212
      PLUS..................................         895       1,030       1,142
                                               ---------   ---------  ----------
        Total, Direct Loans.................       9,838      11,205      12,002
    Consolidation Loans:
      FFEL..................................       3,836       4,043       4,261
      Direct Loans..........................       1,333       2,531       1,855
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......       5,169       6,574       6,116
        Total, All Loans....................      34,169      38,240      40,050
    ---------------------------------------------------------------------------
        \1\ Net commitments equal gross commitments minus loan cancellations.

                           Number of Loans (In thousands)

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       3,150       3,260       3,386

    [[Page 339]]

      Unsubsidized Stafford.................       1,799       1,999       2,136
      PLUS..................................         276         300         321
                                               ---------   ---------  ----------
        Total, FFEL.........................       5,225       5,559       5,843
    Direct Loans:
      Stafford..............................       1,732       1,859       1,934
      Unsubsidized Stafford.................         979       1,073       1,145
      PLUS..................................         153         161         172
                                               ---------   ---------  ----------
        Total, Direct Loans.................       2,864       3,093       3,251
    Consolidation Loans:
      FFEL..................................         195         201         207
      Direct Loans..........................          85         124         100
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......         280         325         307
        Total, All Loans....................       8,369       8,977       9,401
    ---------------------------------------------------------------------------

                        Average Loan Size (in whole dollars)

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       3,397       3,389       3,425
      Unsubsidized Stafford.................       3,755       3,772       3,869
      PLUS..................................       6,182       6,233       6,458
                                               ---------   ---------  ----------
        Weighted Average, FFEL..............       3,667       3,681       3,754
    Direct Loans:
      Stafford..............................       3,291       3,403       3,438
      Unsubsidized Stafford.................       3,310       3,586       3,679
      PLUS..................................       5,865       6,390       6,624
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans......       3,435       3,623       3,692
    Consolidation Loans:
      FFEL..................................      19,678      20,137      20,606
      Direct Loans..........................      15,754      20,465      18,551
                                               ---------   ---------  ----------
        Subtotal, Consolidation Loans.......      18,461      20,228      19,922
        Weighted Average, All Loans.........       4,083       4,260       4,260
    ---------------------------------------------------------------------------

                         Composition of Consolidation Loans

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    Net commitments (in millions of
        dollars):
    FFEL:
      Standard consolidations...............       3,309       3,487       3,675
      Consolidations from Default...........         527         556         586
                                               ---------   ---------  ----------
        Subtotal, FFEL......................       3,836       4,043       4,261
    Direct Loans:
      Standard consolidations...............       1,038       2,199       1,566
      Consolidations from Default...........         295         332         289
                                               ---------   ---------  ----------
        Subtotal, Direct Loans..............       1,333       2,531       1,855
    Total:
      Standard consolidations...............       4,347       5,686       5,241
      Consolidations from Default...........         822         888         875
                                               ---------   ---------  ----------
        Total, Consolidated Loans...........       5,169       6,574       6,116
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    Subsidy Rates (in percent) \1\
    FFEL:
      Stafford..............................       22.03       17.31       15.66
      Unsubsidized Stafford.................        6.04        0.88
      PLUS..................................        4.36       -1.90       -2.78
                                               ---------   ---------  ----------
        Weighted Average, FFEL \2\..........       14.75        9.42        7.94
    Direct Loans:
      Stafford..............................       11.97       12.62       14.07
      Unsubsidized Stafford.................       -8.64      -10.75       -7.54
      PLUS..................................       -7.69       -9.91       -9.35
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans \2\..        3.21        2.31        4.04
    Consolidation Loans:
      FFEL..................................        1.23       -3.52       -4.09
      Direct Loans..........................       -1.31       -0.86       -0.74
                                               ---------   ---------  ----------
        Weighted Average, Consolidation
          Loans.............................        0.54       -2.45       -3.03
    Default Rates (in percent) \3\
    FFEL:
      Stafford..............................       22.70       21.87       20.99
      Unsubsidized Stafford.................       21.39       20.22       19.14
      PLUS..................................       11.08       11.58       12.06
                                               ---------   ---------  ----------
        Weighted Average, FFEL \2\..........       21.21       20.32       19.45
    Direct Loans:
      Stafford..............................       22.16       21.58       20.65
      Unsubsidized Stafford.................       21.73       20.79       19.66
      PLUS..................................       10.40       10.78       11.15
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans \2\..       20.95       20.31       19.45
    Consolidation Loans:
      FFEL..................................       10.50       10.50       10.50
      Direct Loans..........................       13.08       11.95       12.08
                                               ---------   ---------  ----------
        Weighted Average, Consolidation
          Loans.............................       11.17       11.06       10.98
    Borrower Interest Rates (in percent)
    FFEL:
      Stafford \4\..........................        8.25        7.11        7.03
      Unsubsidized Stafford \4\.............        8.25        7.11        7.03
      PLUS \4\..............................        8.68        8.21        8.13
    Direct Loans
      Stafford \4\..........................        8.25        7.11        7.03
      Unsubsidized Stafford \4\.............        8.25        7.11        7.03
      PLUS \4\..............................        8.68        8.21        8.13
    Consolidation Loans:
      FFEL\5\...............................
      Direct Loans \5\......................
    Federal Borrowing Rate for Direct Loans
        (in percent)                                6.77        6.11        6.03
    ---------------------------------------------------------------------------
        \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\ Because these figures do not include totals for Consolidation Loans,
    they do not correspond with totals shown in account-specific schedules.
        \3\ 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 two-year rates tend to be lower
    than those included in this table.
        \4\ Rates shown are those in effect beginning July 1st of each year.
        \5\ 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 (In 1998 only, rates are not
    rounded upward, pursuant to a one-year statutory change.). For the Direct
    Loan Consolidation program, loans consolidated from the Stafford and
    Unsubsidized Stafford Loan programs 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)

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    FFEL:
      Collections by Guaranty Agencies \1\..     943,366   1,018,395   1,001,201
      Collections by Department of Education     624,698     674,383     728,690
      Internal Revenue Service Tax Refund
        Offsets.............................     397,104     428,687     463,208
                                               ---------   ---------  ----------
          Total, FFEL\2\....................   1,965,168   2,121,465   2,193,099
    Direct Loans:
      Collections by Department of Education         823      26,487      73,174
      Internal Revenue Service Tax Refund
        Offsets.............................         214       6,887      19,027
                                               ---------   ---------  ----------
        Total, Direct Loans.................       1,037      33,374      92,201
                                               ---------   ---------  ----------
        Total, FFEL and Direct Loan.........   1,966,205   2,154,839   2,285,300
    ---------------------------------------------------------------------------
        \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 a portion of the amount collected.

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

    ----------------------------------------------------------------------------
                                             1997 cohort 1998 cohort 1999 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):
          Stafford..........................       22.03       17.31       15.90
          Unsubsidized Stafford.............        6.04        0.88        0.38
          PLUS..............................        4.36       -1.90       -2.58
          Consolidation.....................        1.23       -3.52       -4.01
      Graduated: \3\
        Percent of Loan Volume: \2\
          Stafford..........................                               28.73
          Unsubsidized Stafford.............                               28.73
          PLUS..............................                               14.00
          Consolidation.....................                               17.38
        Subsidy Rate (in percent):
          Stafford..........................                               15.20
          Unsubsidized Stafford.............                               -0.81
          PLUS..............................                               -3.77
          Consolidation.....................                               -4.27

    [[Page 340]]

      Extended: \3\
        Percent of Loan Volume: \2\
          Stafford..........................                                6.39
          Unsubsidized Stafford.............                                6.39
          PLUS..............................                                5.32
          Consolidation.....................                               13.03
        Subsidy Rate (in percent):
          Stafford..........................                               15.24
          Unsubsidized Stafford.............                               -0.27
          PLUS..............................                               -3.23
          Consolidation.....................                               -4.09
      Direct Loans: \1\
      Standard:
        Percent of Loan Volume: \2\
          Stafford..........................       87.40       82.85       78.55
          Unsubsidized Stafford.............       84.01       78.21       72.82
          PLUS..............................       77.04       73.56       70.24
          Consolidation.....................       20.80       22.17       21.79
        Subsidy Rate (in percent):
          Stafford..........................       13.59       13.62       15.14
          Unsubsidized Stafford.............       -8.56       -9.67       -6.46
          PLUS..............................       -6.69       -7.62       -6.83
          Consilidation.....................        1.43        1.29        1.66
      Graduated: \3\
        Percent of Loan Volume: \2\
          Stafford..........................        9.22       12.89       16.37
          Unsubsidized Stafford.............       11.36       15.86       20.06
          PLUS..............................       16.83       19.38       21.81
          Consolidation.....................       18.32       20.00       19.54
        Subsidy Rate (in percent):
          Stafford..........................        9.67        7.90       10.58
          Unsubsidized Stafford.............      -12.43      -16.00      -11.12
          PLUS..............................      -12.25      -16.26      -15.27
          Consolidation.....................       -2.18       -3.11       -3.04
      Extended: \3\
        Percent of Loan Volume: \2\
          Stafford..........................        2.19        3.07        3.89
          Unsubsidized Stafford.............        3.26        4.55        5.75
          PLUS..............................        6.13        7.06        7.95
          Consolidation.....................       15.19       16.88       16.41
        Subsidy Rate (in percent):
          Stafford..........................       10.57        8.02       10.66
          Unsubsidized Stafford.............      -11.32      -15.91      -11.10
          PLUS..............................      -10.80      -16.27      -15.31
          Consolidation.....................       -1.15       -3.08       -3.10
      Income-Contingent:
        Percent of Loan Volume: \2\
          Stafford..........................        1.19        1.19        1.19
          Unsubsidized Stafford.............        1.38        1.38        1.38
          Consolidation.....................       45.69       40.94       42.26
        Subsidy Rate (in percent):
          Stafford..........................        9.38        5.49        2.54
          Unsubsidized Stafford.............        8.55        5.19        2.54
          Consolidation.....................       -2.06       -2.69       -5.51
    ---------------------------------------------------------------------------
        \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 borrower debt levels.
                        Debt Level      Maximum Term
                                         (in years)  Percent of
                                                       Volume
                                                       Within
                                                      Extended
                                                      Plan 1998

                   Below $10,000........          12        5.60
                   $10,000-$20,000......          15       16.40
                   $20,000-$40,000......          20       28.50
                   $40,000-$60,000......          25       20.50
                   Above $60,000........          30       29.00

        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 1999 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)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       29.49       21.11       19.19
      Category 2: 4 year college, 3rd
        and 4th year students...........       18.42       14.26       12.70
      Category 3: 2 year college, all
        students........................       26.29       21.07       19.04
      Category 4: Proprietary school,
        all students....................       24.54       22.30       20.68
      Category 5: Graduate students.....       19.31       16.31       14.89

                        Gross Default Rates (in percent)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       30.64       29.55       28.36
      Category 2: 4 year college, 3rd
        and 4th year students...........       19.13       18.10       17.03
      Category 3: 2 year college, all
        students........................       39.80       39.47       38.64
      Category 4: Proprietary school,
        all students....................       50.82       50.82       50.62
      Category 5: Graduate students.....       11.90       11.78       11.55

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........        8.80        1.29        0.24
      Category 2: 4 year college, 3rd
        and 4th year students...........        5.83        0.25       -0.58
      Category 3: 2 year college, all
        students........................       13.48        8.19        6.42
      Category 4: Proprietary school,
        all students....................       16.13        9.79        7.10
      Category 5: Graduate students.....        2.44       -1.43       -1.79

                        Gross Default Rates (in percent)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       30.28       29.01       27.69
      Category 2: 4 year college, 3rd
        and 4th year students...........       19.78       18.96       18.09
      Category 3: 2 year college, all
        students........................       42.32       39.28       36.35
      Category 4: Proprietary school,
        all students....................       43.49       37.11       31.23
      Category 5: Graduate students.....       12.41       12.39       12.30

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1997 actual  1998 est.   1999 est.
      All PLUS Loans....................        4.44       -1.90       -2.78

                        Gross Default Rates (in percent)

      All PLUS Loans....................       11.08       11.58       12.06

    [[Page 341]]

                   DIRECT LOAN RISK CATEGORIES: STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       20.59       19.91       21.22
      Category 2: 4 year college, 3rd
        and 4th year students...........       11.25       10.35       11.84
      Category 3: 2 year college, all
        students........................       19.07       19.22       20.76
      Category 4: Proprietary school,
        all students....................       24.00       25.44       27.30
      Category 5: Graduate students.....       11.12       10.30       12.11

                        Gross Default Rates (in percent)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       30.64       29.55       28.36
      Category 2: 4 year college, 3rd
        and 4th year students...........       19.13       18.10       17.03
      Category 3: 2 year college, all
        students........................       39.80       39.47       38.64
      Category 4: Proprietary school,
        all students....................       49.92       50.82       50.62
      Category 5: Graduate students.....       11.90       11.78       11.55

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       -5.29       -7.67       -4.28
      Category 2: 4 year college, 3rd
        and 4th year students...........       -8.59      -10.05       -6.91
      Category 3: 2 year college, all
        students........................       -0.21       -2.07       -0.45
      Category 4: Proprietary school,
        all students....................        4.97        1.55        2.15
      Category 5: Graduate students.....      -11.74      -13.47       -9.75

                        Gross Default Rates (in percent)

                                         1997 actual  1998 est.   1999 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       30.28       29.01       27.69
      Category 2: 4 year college, 3rd
        and 4th year students...........       19.78       18.96       18.09
      Category 3: 2 year college, all
        students........................       42.32       39.28       36.35
      Category 4: Proprietary school,
        all students....................       43.49       37.11       31.23
      Category 5: Graduate students.....       12.41       12.39       12.30

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         1997 actual  1998 est.   1999 est.
      All PLUS Loans....................       -7.53       -9.91       -9.35

                        Gross Default Rates (in percent)

      All PLUS Loans....................       10.40       10.78       11.15

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

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    Interest costs:
    Interest benefits:
      FFEL Liquidating......................     144,379      14,808       3,587
      FFEL Program..........................   2,093,000   2,115,000   2,029,000
      Direct Loans \1\......................     669,446     893,236   1,033,592
                                               ---------   ---------  ----------
                                               2,906,825   3,023,044   3,066,179
    Special allowance:
      FFEL Liquidating......................     186,917     106,265      52,104
      FFEL Program..........................      85,109      88,998      19,693
                                               ---------   ---------  ----------
                                                 272,026     195,263      71,796
    Default costs and offsets:
    Default costs \2\:
      FFEL Liquidating......................   1,150,129     804,575     568,937
      FFEL Program..........................   2,170,000   2,385,000   2,592,000
      Direct Loans..........................      20,486      73,338     181,444
                                               ---------   ---------  ----------
                                               3,340,614   3,262,913   3,342,381
    Gross default collections:
      FFEL Liquidating......................   1,366,280   1,793,833   1,737,470
      FFEL Program..........................     598,889     327,632     455,629
      Direct Loans..........................       1,037      33,374      92,201
                                               ---------   ---------  ----------
                                               1,966,205   2,154,838   2,285,300
    Default collection costs:
      FFEL Liquidating:
        Contract collection costs...........      93,334      70,415      87,235
        Guaranty agency retention...........     149,061     195,707     119,538
                                               ---------   ---------  ----------
                                                 242,395     266,122     206,773
      FFEL Program:
        Contract collection costs...........       3,790      12,082      17,433
        Guaranty agency retention...........      65,339      35,745      31,347
                                               ---------   ---------  ----------
                                                  69,129      47,827      48,780
      Direct Loans:
        Collection costs \3\................      94,000     914,473   2,188,423
        Net default costs:\4\
          FFEL Liquidating..................      26,244    -723,136    -961,760
          FFEL Program......................   1,640,240   2,105,195   2,185,151
          Direct Loans......................     113,449     954,438   2,277,666
                                               ---------   ---------  ----------
                                               1,779,933   2,336,497   3,501,057
      Death, disability, and bankruptcy
          costs:
        FFEL Liquidating....................      57,094     121,995     105,021
        FFEL Program........................     194,494     208,356     247,149
        Direct Loans........................      14,978      41,246      70,999
                                               ---------   ---------  ----------
                                                 266,566     371,597     423,169
      Other write-offs 5, 6......      51,870      34,910      50,744
    Administrative Costs:
    Federal administration:
      FFEL..................................      46,482      46,482      48,482
      Student Aid Management \7\............     425,652     491,000     532,000
    Guaranty agency administrative payments:
      Administrative cost allowance \8\.....     150,419     170,000
      Fee for Services \8\..................                             170,000
      Supplemental preclaims assistance \5\.      21,385      11,286
      Lender-paid default prevention fee....                              17,510
    Fees:
      Borrower origination fees:
        FFEL................................     276,929     647,566     661,028
        Direct Loans........................     352,406     433,707     422,387
      Lender origination fee \5\............      46,155     107,928     110,171
      Sallie Mae offset fee \5\.............      34,935      26,800      22,100
      Consolidation loan holder fees \5\....     129,678     154,278     183,671
    ---------------------------------------------------------------------------
        \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\ A number of expenses related to the administration of the student
    assistance programs are paid out of Student Aid Management funds. One of
    these expenses, administrative cost allowances to guaranty agencies, is
    shown as a separate line.
        \8\ Administrative cost allowances paid from Student Aid Management
    funds. The President is proposing to replace these statutorily set payments
    with fees tied to specific services beginning in 1999.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          28          28          30
    11.3    Other than full-time permanent..           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          29          29          31
    12.1  Civilian personnel benefits.......           6           6           6
    21.0  Travel and transportation of
            persons.........................           3           3           3
    23.1  Rental payments to GSA............           5           5           5
    23.3  Communications, utilities, and
            miscellaneous charges...........          17          30          38
    24.0  Printing and reproduction.........           4           6           4
    25.1  Advisory and assistance services..           4
    25.2  Other services....................           6           6           6
    25.3  Purchases of goods and services
            from Government accounts........           4           6           6
    25.7  Operation and maintenance of
            equipment.......................         260         267         338
    26.0  Supplies and materials............           1           1           1
    31.0  Equipment.........................           1           2           2
    32.0  Land and structures...............                       1
    41.0  Grants, subsidies, and
            contributions...................         633         653         664
                                               ---------   ---------  ----------
    99.9    Total obligations...............         973       1,015       1,104
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         506         520         550
    ---------------------------------------------------------------------------

    [[Page 342]]

              Federal Direct Student Loan Program, Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    02.01 Direct loan subsidy...............                                  31
                                               ---------   ---------  ----------
    02.91   Subtotal, subsidy cost..........                                  31
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                  31
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  31
    23.95 New obligations...................                                 -31
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.05 Appropriation (indefinite)........                                  31
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                  31
    73.20 Total outlays (gross).............                                 -20
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                  11
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                  20
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                  31
    90.00 Outlays...........................                                  20
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct loan subsidy (in percent):
    1320  Stafford..........................                                0.29
    1320  Unsubsidized Stafford.............                                0.24
    1320  PLUS..............................                                0.14
    1320  Consolidated......................                               -0.13
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...                                0.20
        Direct loan subsidy budget authority:
    1330  Stafford..........................                                  21
    1330  Unsubsidized Stafford.............                                  11
    1330  PLUS..............................                                   2
    1330  Consolidated......................                                  -3
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..                                  31
        Direct loan subsidy outlays:
    1340  Stafford..........................                                  14
    1340  Unsubsidized Stafford.............                                   7
    1340  PLUS..............................                                   1
    1340  Consolidated......................                                  -2
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........                                  20
    ----------------------------------------------------------------------------

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

             Federal Direct Student Loan Program, Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct loans:

    01.01   Stafford........................       6,264       6,326       6,648
    01.02   Unsubsidized Stafford...........       3,474       3,849       4,212
    01.03   PLUS............................       1,031       1,030       1,142
    01.04   Consolidated....................       1,257       2,531       1,855
    01.05   Upward adjustment in prior
              obligations...................         214
                                               ---------   ---------  ----------
    01.91     Subtotal, direct loans
                obligations.................      12,240      13,736      13,857
          Payment of origination services:

    02.01   Stafford........................           1
    02.04   Consolidated....................           9           9           7
                                               ---------   ---------  ----------
    02.91   Subtotal, Payment of origination
              services......................          10           9           7
          Payment of contract collection costs:

    03.01   Stafford........................                       1           1
    03.02   Unsubsidized Stafford...........                                   1
    04.01 Interest payment to Treasury......       1,733       1,679       2,327
    05.01 Payment of downward reestimate to
            program account.................         211          95
                                               ---------   ---------  ----------
    10.00   Total obligations...............      14,194      15,520      16,193
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          24
    22.00 New financing authority (gross)...      13,568      15,520      16,193
    22.10 Resources available from
            recoveries of prior year
            obligations.....................         602
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      14,194      15,520      16,193
    23.95 New obligations...................     -14,194     -15,520     -16,193
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..      12,104      13,284      13,439
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...       2,227       3,116       4,389
    68.10   Change in orders on hand from
              Federal sources...............          78         -85          52
    68.47   Portion applied to debt
              reduction.....................        -841        -795      -1,687
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................       1,464       2,236       2,754
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................      13,568      15,520      16,193
    ----------------------------------------------------------------------------

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

    72.40   Obligated balance: Uninvested...       2,921       3,872       2,979
    72.95   Receivables from program account          82         160          75
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............       3,003       4,032       3,054
    73.10 New obligations...................      14,194      15,520      16,193
    73.20 Total financing disbursements
            (gross).........................     -12,563     -16,498     -16,006
    73.45 Adjustments in unexpired accounts.        -602
          Unpaid obligations, end of year:

    74.40   Obligated balance: Uninvested...       3,872       2,979       3,114
    74.95   Receivables from program account         160          75         127
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................       4,032       3,054       3,241
    87.00 Total financing disbursements
            (gross).........................      12,563      16,498      16,006
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

    88.00         Stafford..................        -603        -857        -885
    88.00         Unsubsidized Stafford.....         253         407         350
    88.00         PLUS......................          58         100         107
    88.00         Consolidated..............          15          21          11
    88.00         Upward reestimate.........        -128        -218
    88.25     Interest on uninvested funds..        -553
              Non-Federal sources:
                Stafford loans:

    88.40         Repayment of principal,
                    Stafford................        -279        -312        -563
    88.40         Interest received on
                    loans, Stafford.........         -58        -386        -679
    88.40         Fees, Stafford............        -207        -246        -263
    88.40         Recoveries of defaults,
                    Stafford................                     -17         -49
                Unsubsidized Stafford loans:

    88.40         Repayment of principal,
                    Unsubsidized Stafford...        -152        -175        -335
    88.40         Interest received on
                    loans, Unsubsidized
                    Stafford................         -79        -225        -418
    88.40         Fees, Unsubsidized
                    Stafford................        -114        -148        -165
    88.40         Recoveries of defaults,
                    Unsubsidized Stafford...                      -8         -26
                PLUS loans:

    88.40         Repayment of principal,
                    PLUS....................        -127        -137        -202
    88.40         Interest received on
                    loans, PLUS.............         -93        -185        -251
    88.40         Fees, PLUS................         -31         -40         -44
    88.40         Recoveries of defaults,
                    PLUS....................                      -5         -11
                Consolidated:

    88.40         Payment of principal,
                    Consolidated............         -60        -237        -358
    88.40         Interest received on
                    loans, Consolidated.....         -69        -446        -604
    88.40         Recoveries of defaults,
                    Consolidated............                      -2          -4
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -2,227      -3,116      -4,389

    [[Page 343]]

    88.95 Change in receivables from program
            accounts........................         -78          85         -52
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............      11,263      12,489      11,752
    90.00 Financing disbursements...........      10,336      13,382      11,617
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       6,264       5,081       2,701
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       6,264       5,081       2,701
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       6,305      11,443      17,223
    1231  Disbursements: Direct loan
            disbursements...................       5,426       6,161       6,563
    1251  Repayments: Repayments and
            prepayments.....................        -279        -368        -692
    1261  Adjustments: Capitalized interest.          22
          Write-offs for default:

    1263    Direct loans....................          -5                      -1
    1264    Other adjustments, net..........         -26         -13         -23
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      11,443      17,223      23,070
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       3,474       1,329       2,574
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       3,474       1,329       2,574
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       3,064       5,887       9,362
    1231  Disbursements: Direct loan
            disbursements...................       2,938       3,689       4,116
    1251  Repayments: Repayments and
            prepayments.....................        -152        -204        -404
    1261  Adjustments: Capitalized interest.          88
          Write-offs for default:

    1263    Direct loans....................          -3                      -1
    1264    Other adjustments, net..........         -48         -10         -19
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       5,887       9,362      13,054
    ----------------------------------------------------------------------------

              PLUS
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       1,031         895       1,030
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       1,031         895       1,030
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         869       1,539       2,366
    1231  Disbursements: Direct loan
            disbursements...................         798         993       1,112
    1251  Repayments: Repayments and
            prepayments.....................        -127        -155        -233
    1261  Adjustments: Capitalized interest.           7
          Write-offs for default:

    1263    Direct loans....................          -4
    1264    Other adjustments, net..........          -4         -11         -16
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       1,539       2,366       3,229
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       1,257       2,531       1,855
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       1,257       2,531       1,855
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       1,322       2,343       4,577
    1231  Disbursements: Direct loan
            disbursements...................       1,109       2,490       1,879
    1251  Repayments: Repayments and
            prepayments.....................         -60        -248        -379
    1261  Adjustments: Capitalized interest.          23
          Write-offs for default:

    1263    Direct loans....................          -3
    1264    Other adjustments, net..........         -48          -8         -13
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       2,343       4,577       6,064
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-0-3-502    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       2,921          4,032         2,979          3,114
          Net value of assets related to
              post-1991 direct loans
              receivable:

            Direct loans receivable, gross:
    1401      Stafford......................       6,310         11,443        17,223         23,069
    1401      Unsubsidized Stafford.........       3,044          5,887         9,361         13,054
    1401      PLUS..........................         861          1,539         2,366          3,229
    1401      Consolidated..................       1,304          2,343         4,577          6,064
            Interest receivable:
    1402      Interest receivable, Stafford.           5             41            62             83
    1402      Interest receivable, Unsub
                Stafford....................         114            239           381            533
    1402      Interest receivable, PLUS.....           8             11            17             23
    1402      Interest receivable,
                Consolidated................          25             46            90            120
    1405    Allowance for subsidy cost (-)..        -655           -764        -1,211         -1,645
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....      11,016         20,785        32,866         44,530
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      13,937         24,817        35,845         47,644
        LIABILITIES:
    2103  Federal liabilities: Debt.........      12,220         22,713        31,216         40,000
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      12,220         22,713        31,216         40,000
        NET POSITION:
    3100  Appropriated capital..............       1,717          2,104         4,629          7,644
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       1,717          2,104         4,629          7,644
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      13,937         24,817        35,845         47,644
    -----------------------------------------------------------------------------------------------

             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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    04.01 Interest payment to Treasury......                                   1
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                   1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    23.95 New obligations...................                                  -1
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..                                 -20
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...                                 -29
    68.10   Change in orders on hand from
              Federal sources...............                                   8
    68.47   Portion applied to debt
              reduction.....................                                  41
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................                                  20
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                   1
    73.20 Total financing disbursements
            (gross).........................                                  -1
          Unpaid obligations, end of year:

    74.40   Obligated balance: Uninvested...                                  -8
    74.95   Receivables from program account                                   8
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................
    87.00 Total financing disbursements
            (gross).........................                                   1
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

    88.00         Stafford..................                                 -14
    88.00         Unsubsidized Stafford.....                                  -7
    88.00         PLUS......................                                  -1
    88.00         Consolidated..............                                   2
              Non-Federal sources:
    88.40       Fees, Stafford..............                                  27
    88.40       Fees, Unsubsidized Stafford.                                  17
    88.40       Fees, PLUS..................                                   5

    [[Page 344]]

    88.40       Payment of Principal,
                  Consolidated..............                                   2
                Unsubsidized Stafford loans:

    88.40         Recoveries of defaults,
                    Consolidated............                                  -2
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                  29
    88.95 Change in receivables from program
            accounts........................                                  -8
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                                  21
    90.00 Financing disbursements...........                                  30
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-4-3-502    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                                                      -8
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                                      -8
        LIABILITIES:
    2103  Federal liabilities: Debt.........                                                      21
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                                                      21
        NET POSITION:
    3100  Appropriated capital..............                                                     -29
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                                     -29
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                                      -8
    -----------------------------------------------------------------------------------------------

        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 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, [$46,482,000] $48,482,000. (Department of Education
    Appropriations Act, 1998.)
        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Guaranteed loan subsidy:

    02.01   Stafford........................       2,376       2,112       2,100
    02.02   Unsubsidized Stafford...........         393          75          83
    02.03   PLUS............................          70         -40         -45
    02.05   Consolidated....................          47        -143        -151
    02.07   Upward reestimate...............       1,098
    02.08   Interest on reestimate..........         248
                                               ---------   ---------  ----------
    02.91     Subtotal, subsidy cost........       4,232       2,004       1,987
          Administrative expenses:

    07.01   Administrative expenses due to
              limitations...................          46          46          48
                                               ---------   ---------  ----------
    10.00   Total obligations...............       4,278       2,050       2,035
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       4,583       2,050       2,035
    22.30 Unobligated balance expiring......        -305
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       4,278       2,050       2,035
    23.95 New obligations...................      -4,278      -2,050      -2,035
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation (Federal
              administration)...............          46          46          48
          Permanent:

    60.05   Appropriation (indefinite)......       3,290       2,004       1,987
    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).       1,247
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       4,583       2,050       2,035
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       1,064       1,148         882
    73.10 New obligations...................       4,278       2,050       2,035
    73.20 Total outlays (gross).............      -4,194      -2,316      -1,834
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       1,148         882       1,085
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          36          33          35
    86.93 Outlays from current balances.....           9          11          11
    86.97 Outlays from new permanent
            authority.......................       3,108       1,148       1,133
    86.98 Outlays from permanent balances...       1,041       1,124         655
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       4,194       2,316       1,834
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........      -1,247
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,336       2,050       2,035
    90.00 Outlays...........................       2,948       2,316       1,834
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................       3,336       2,050       2,035
      Outlays...........................       2,947       2,316       1,834
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                    -158        -223
      Outlays...........................                    -158        -142
                                        ------------------------------------
    Total:
      Budget Authority..................       3,336       1,892       1,812
      Outlays...........................       2,947       2,158       1,692
                                        ====================================

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

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Guaranteed loan levels supportable by subsidy
                    budget authority:
    2150  Stafford..........................      11,912      12,199      12,799
    2150  Unsubsidized Stafford.............       7,295       8,458       9,264
    2150  PLUS..............................       1,827       2,114       2,341
    2150  Consolidated......................       3,798       4,048       4,267
                                               ---------   ---------  ----------
    2159    Total loan guarantee levels.....      24,832      26,819      28,671
        Guaranteed loan subsidy (in percent):
    2320  Stafford..........................       22.03       17.31       16.41
    2320  Unsubsidized Stafford.............        6.04        0.88        0.90
    2320  PLUS..............................        4.36       -1.90       -1.91
    2320  Consolidated......................        1.23       -3.52       -3.55
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...       12.85        7.47        6.93
        Guaranteed loan subsidy budget authority:
    2330  Stafford..........................       2,624       2,112       2,100
    2330  Unsubsidized Stafford.............         441          75          83
    2330  PLUS..............................          79         -40         -45
    2330  Consolidated......................          47        -143        -152
    2330  Upward reestimate.................       1,346
    2330  Downward reestimate...............      -1,247
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..       3,290       2,004       1,986
        Guaranteed loan subsidy outlays:
    2340  Stafford..........................       2,309       2,210       1,905
    2340  Unsubsidized Stafford.............         388         197          72
    2340  PLUS..............................          59           6         -38
    2340  Consolidated......................          47        -142        -151
    2340  Upward reestimate.................       1,346
    2340  Downward reestimate...............      -1,247
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........       2,902       2,271       1,788
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................          46          46          48

    [[Page 345]]

    3590  Outlays...........................          45          45          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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................          16          19          20
    12.1  Civilian personnel benefits.......           3           4           4
    21.0  Travel and transportation of
            persons.........................           1
    23.1  Rental payments to GSA............           2           2           2
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           1           1
    24.0  Printing and reproduction.........           2           1           2
    25.2  Other services....................           1           1           1
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    25.7  Operation and maintenance of
            equipment.......................          19          17          17
    41.0  Grants, subsidies, and
            contributions...................       4,232       2,004       1,987
                                               ---------   ---------  ----------
    99.9    Total obligations...............       4,278       2,050       2,035
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         357         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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Guaranteed loan subsidy:

    02.01   Stafford........................                     -97         -96
    02.02   Unsubsidized Stafford...........                     -48         -84
    02.03   PLUS............................                     -13         -20
    02.05   Consolidated....................                                 -23
                                               ---------   ---------  ----------
    02.91     Subtotal, subsidy cost........                    -158        -223
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                    -158        -223
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                    -158        -223
    23.95 New obligations...................                     158         223
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.05 Appropriation (indefinite)........                    -158        -223
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                    -158        -223
    73.20 Total outlays (gross).............                     158         142
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                 -81
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                    -158        -142
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                    -158        -223
    90.00 Outlays...........................                    -158        -142
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
    Identification code 91-0231-4-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Guaranteed loan subsidy (in percent):
    2320  Stafford..........................                    0.00       -0.75
    2320  Unsubsidized Stafford.............                    0.00       -0.90
    2320  PLUS..............................                    0.00       -0.87
    2320  Consolidated......................                    0.00       -0.54
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...                    0.00       -0.78
        Guaranteed loan subsidy budget authority:
    2330  Stafford..........................                     -97         -96
    2330  Unsubsidized Stafford.............                     -48         -84
    2330  PLUS..............................                     -13         -20
    2330  Consolidated......................                                 -23
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..                    -158        -223
        Guaranteed loan subsidy outlays:
    2340  Stafford..........................                     -97         -58
    2340  Unsubsidized Stafford.............                     -48         -50
    2340  PLUS..............................                     -13         -11
    2340  Consolidated......................                                 -23
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........                    -158        -142
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................
    3590  Outlays...........................
    ---------------------------------------------------------------------------

            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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits...............       2,093       2,116       2,030
    01.02   Special allowance...............          85          48          15
    01.03   Default claims..................       1,374       1,393       1,472
    01.04   Death, disability, and
              bankruptcy claims.............         102          85         103
    01.06   Supplemental preclaims
              assistance....................          14           6           9
    01.07   Contract collection costs.......           1           8          11
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......       3,669       3,656       3,640
          Unsubsidized Stafford loans:

    02.02   Special allowance...............                      12           2
    02.03   Default claims..................         301         471         600
    02.04   Death, disability, and
              bankruptcy claims.............          24          43          64
    02.06   Supplemental preclaims
              assistance....................           3           2           4
    02.07   Contract collection costs.......                       1           2
                                               ---------   ---------  ----------
    02.91     Subtotal, Unsubsidized
                Stafford loans..............         328         531         673
          PLUS loans:

    03.03   Default claims..................         125         136         139
    03.04   Death, disability, and
              bankruptcy claims.............          43          33          32
    03.05   Supplemental preclaims
              assistance....................           1           1           1
    03.06   Contract collection costs.......                       1           1
                                               ---------   ---------  ----------
    03.91     Subtotal, PLUS loans..........         169         171         174
          SLS loans:

    04.02   Special allowance...............                       8           1
    04.03   Default claims..................         153         146         115
    04.04   Death, disability and bankruptcy
              claims........................           5          14          13
    04.06   Supplemental preclaims
              assistance....................           2           1
    04.07   Contract collection costs.......           2           1           2
                                               ---------   ---------  ----------
    04.91     Subtotal, SLS loans...........         162         170         131
          Consolidations loans:

    05.02   Special allowance...............                      20           2
    05.03   Default claims..................         217         239         267
    05.04   Death, disability, and
              bankruptcy claims.............          21          33          35
    05.06   Supplemental preclaims
              assistance....................           2           2           3
    05.07   Contract collection costs.......                       1           1
                                               ---------   ---------  ----------
    05.91     Subtotal, Consolidations loans         240         295         308

    [[Page 346]]

    07.01 Interest paid to Treasury.........          50          26           9
    08.01 Payment of downard reestimate to
            program account.................         971
    09.01 Interest on downward reestimate...         276
                                               ---------   ---------  ----------
    10.00   Total obligations...............       5,865       4,847       4,933
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......       9,146       9,292       7,925
    22.00 New financing authority (gross)...       5,980       3,480       3,181
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          31
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      15,157      12,772      11,106
    23.95 New obligations...................      -5,865      -4,847      -4,933
    24.40 Unobligated balance available, end
            of year: Uninvested.............       9,292       7,925       6,173
    ----------------------------------------------------------------------------

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

    68.00   Offsetting collections (cash)...       6,188       3,752       3,767
    68.10   Change in orders on hand from
              Federal sources...............         118         -35        -469
    68.47   Portion applied to debt
              reduction.....................        -326        -237        -117
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................       5,980       3,480       3,181
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................       5,980       3,480       3,181
    ----------------------------------------------------------------------------

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

    72.40   Obligated balance: Uninvested...        -886        -981        -977
    72.95   Receivables from program account       1,041       1,159       1,124
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............         155         178         147
    73.10 New obligations...................       5,865       4,847       4,933
    73.20 Total financing disbursements
            (gross).........................      -5,811      -4,878      -4,930
    73.45 Adjustments in unexpired accounts.         -31
          Unpaid obligations, end of year:

    74.40   Obligated balance: Uninvested...        -981        -977        -505
    74.95   Receivables from program account       1,159       1,124         655
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................         178         147         150
    87.00 Total financing disbursements
            (gross).........................       5,811       4,878       4,930
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

    88.00         Stafford loans............      -2,309      -1,914      -1,903
    88.00         Unsubsidized Stafford.....        -388         -66         -74
    88.00         PLUS loans................         -59          36          40
    88.00         Consolidated loans........         -47         142         151
    88.00         Upward reestimate.........      -1,346
    88.00         Scheduled payments from
                    Liquidating account for
                    noncontractual
                    modifications...........        -376        -263        -184
    88.25     Interest on uninvested funds:
                Stafford loans..............        -524        -460        -396
              Non-Federal sources:
                Stafford loans:

    88.40         Recoveries on defaults....        -328        -182        -258
    88.40         Origination fees..........        -178        -407        -399
    88.40         Sallie Mae offset fees....         -34         -17         -14
    88.40         Other Fees................         -62
    88.40         Recoveries on defaults....         -69         -32         -57
                Unsubsidized Stafford:

    88.40         Origination fees..........        -105        -265        -281
    88.40         Other Fees................         -36
    88.40         Sallie Mae offset fees....                      -6          -6
                PLUS:

    88.40         Recoveries on defaults....         -31         -23         -32
    88.40         Origination fees..........         -27         -64         -70
    88.40         Other Fees................          -9
                SLS:

    88.40         Sallie Mae offset fees....          -1          -3          -2
    88.40         Recoveries on defaults....         -55         -33         -41
    88.40         Other Fees................          -2
                Consolidated:

    88.40         Recoveries on defaults....         -52         -21         -36
    88.40         Origination fees..........         -12         -20         -21
    88.40         Consolidated Loan Holders
                    Fee.....................        -130        -154        -184
    88.40         Other Fees................          -8
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -6,188      -3,752      -3,767
    88.95 Change in receivables from program
            accounts........................        -118          35         469
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............        -326        -237        -117
    90.00 Financing disbursements...........        -377       1,126       1,163
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-0-3-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Position with respect to appropriations act
                    limitation on commitments:
    2111  Limitation on guaranteed loans
            made by private lenders.........
    2131  Guaranteed loan commitments exempt
            from limitation.................      11,912      12,199      12,799
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      11,912      12,199      12,799
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      36,340      43,955      54,046
    2231  Disbursements of new guaranteed
            loans...........................       9,341      11,599      11,407
    2251  Repayments and prepayments........      -3,188         -11        -125
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....      -1,425      -1,412      -1,484
    2263    Terminations for default that
              result in claim payments......        -101         -85        -103
    2264    Other adjustments, net..........       2,988
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      43,955      54,046      63,741
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      43,955      54,046      63,741
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......       1,642       2,709       3,918
    2331    Disbursements for guaranteed
              loan claims...................       1,425       1,413       1,484
    2351    Repayments of loans receivable..        -328        -182        -258
    2361    Write-offs of loans receivable..         -30         -22         -31
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       2,709       3,918       5,113
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       7,295       8,458       9,264
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       7,295       8,458       9,264
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       9,168      14,285      21,349
    2231  Disbursements of new guaranteed
            loans...........................       5,480       7,569       8,020
    2251  Repayments and prepayments........        -674          -8         -95
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -297        -454        -590
    2263    Terminations for default that
              result in claim payments......         -24         -43         -64
    2264    Other adjustments, net..........         632
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      14,285      21,349      28,620
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      14,285      21,349      28,620
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......          93         319         738
    2331    Disbursements for guaranteed
              loan claims...................         297         455         591
    2351    Repayments of loans receivable..         -69         -32         -57
    2361    Write-offs of loans receivable..          -2          -4          -7
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         319         738       1,265
    ----------------------------------------------------------------------------

    [[Page 347]]

              PLUS
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       1,827       2,114       2,341
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       1,827       2,114       2,341
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       3,494       4,635       6,252
    2231  Disbursements of new guaranteed
            loans...........................       1,360       1,840       1,998
    2251  Repayments and prepayments........        -760         -53        -189
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -129        -137        -141
    2263    Terminations for default that
              result in claim payments......         -42         -33         -32
    2264    Other adjustments, net..........         712
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       4,635       6,252       7,888
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       4,635       6,252       7,888
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         241         336         446
    2331    Disbursements for guaranteed
              loan claims...................         129         136         142
    2351    Repayments of loans receivable..         -30         -23         -32
    2361    Write-offs of loans receivable..          -4          -3          -4
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         336         446         552
    ----------------------------------------------------------------------------

              SLS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       4,338       4,116       3,951
    2251  Repayments and prepayments........        -558
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -182        -151        -122
    2263    Terminations for default that
              result in claim payments......          -5         -14         -13
    2264    Other adjustments, net..........         523
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       4,116       3,951       3,816
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       4,116       3,951       3,816
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         715         829         941
    2331    Disbursements for guaranteed
              loan claims...................         182         150         122
    2351    Repayments of loans receivable..         -55         -34         -41
    2361    Write-offs of loans receivable..         -13          -4          -5
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         829         941       1,017
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       3,798       4,049       4,267
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       3,798       4,049       4,267
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       5,332       8,396      12,065
    2231  Disbursements of new guaranteed
            loans...........................       3,361       4,043       4,261
    2251  Repayments and prepayments........        -878        -101        -314
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -221        -240        -267
    2263    Terminations for default that
              result in claim payments......         -21         -33         -35
    2264    Other adjustments, net..........         823
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       8,396      12,065      15,710
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       8,396      12,065      15,710
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         125         292         509
    2331    Disbursements for guaranteed
              loan claims...................         221         241         267
    2351    Repayments of loans receivable..         -52         -21         -36
    2361    Write-offs of loans receivable..          -2          -3          -4
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         292         509         736
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-0-3-502    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       9,146          9,292         7,925          6,173
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1501    Defaulted guaranteed loans
              receivable, gross.............       2,817          4,485         6,552          8,683
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............       2,817          4,485         6,552          8,683
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1701    Defaulted guaranteed loans,
              gross.........................      12,151         11,244        10,617          9,070
    1704    Defaulted guaranteed loans and
              interest receivable, net......      12,151         11,244        10,617          9,070
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      24,114         25,021        25,094         23,926
        LIABILITIES:
    2103  Federal liabilities: Debt.........       1,134            680           354            117
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,134            680           354            117
        NET POSITION:
    3100  Appropriated capital..............      22,980         24,341        24,740         23,809
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      22,980         24,341        24,740         23,809
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      24,114         25,021        25,094         23,926
    -----------------------------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this
    nonbudgetary account records all cash flows to and from the Government
    resulting from Federal Family Education Loans (FFEL), formerly
    guaranteed student loans (GSL), 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 Program, Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-4-3-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......                                -163
    22.00 New financing authority (gross)...                    -163        -218
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......                    -163        -381
    24.40 Unobligated balance available, end
            of year: Uninvested.............                    -163        -381
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                    -163        -218
    87.00 Total financing disbursements
            (gross).........................
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

    88.00         Stafford loans............                      97          87
    88.00         Unsubsidized Stafford.....                      48          74
    88.00         PLUS loans................                      13          18

    [[Page 348]]

    88.00         Consolidated loans........                                  23
    88.25     Interest on uninvested funds:
                Stafford loans..............                       5          16
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                     163         218
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........                     163         218
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-4-3-502    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                                     -163           -381
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                     -163           -381
        LIABILITIES:
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............
        NET POSITION:
    3100  Appropriated capital..............                                     -163           -381
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                     -163           -381
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                     -163           -381
    -----------------------------------------------------------------------------------------------

                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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits, net of
              origination fees..............         144          15           4
    01.02   Special allowance net of
              origination fees..............         187         106          52
    01.03   Default claims..................         645         721         520
    01.04   Death, disability, and
              bankruptcy claims.............          79         105          93
    01.06   Supplemental preclaims
              assistance....................          30          13           9
    01.07   Contract collection costs.......          85          62          61
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......       1,170       1,021         739
          PLUS/SLS loans:

    02.01   Default claims..................          33          85          45
    02.02   Death, disability, and
              bankruptcy claims.............           4          17          12
    02.04   Supplemental preclaims
              assistance....................           2           2           1
    02.05   Contract collection costs.......           4           9          26
                                               ---------   ---------  ----------
    02.91     Subtotal, PLUS/SLS loans......          43         113          84
          Miscellaneous costs:

    03.01   Scheduled payments to finance
              account for non-contractual
              modifications.................         376         263         184
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,589       1,398       1,007
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       1,962       1,598       1,600
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          41
    22.30 Unobligated balance expiring......        -414        -200        -593
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,589       1,398       1,007
    23.95 New obligations...................      -1,589      -1,398      -1,007
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.05 Appropriation (indefinite)........         745
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............       1,217       1,598       1,600
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,962       1,598       1,600
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         261         220         210
    73.10 New obligations...................       1,589       1,398       1,007
    73.20 Total outlays (gross).............      -1,589      -1,408      -1,066
    73.45 Adjustments in unexpired accounts.         -41
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         220         210         151
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................       1,328       1,188         856
    86.98 Outlays from permanent balances...         261         220         210
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,589       1,408       1,066
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

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

    88.40         Federal collections on
                    defaulted loans.........        -357        -469        -470
    88.40         Federal collections on
                    bankruptcies............         -18         -23         -23
    88.40         Offsets against Federal
                    tax refunds.............        -238        -313        -313
                Other collections:

    88.40         Reimbursements from
                    guaranty agencies.......        -437        -574        -575
    88.40         Federal collections on
                    defaulted loans.........         -57         -74         -74
    88.40         Federal collections on
                    bankruptcies............          -3          -4          -4
    88.40         Offsets against Federal
                    tax refunds.............         -38         -50         -50
    88.40         Reimbursements from
                    guaranty agencies.......         -69         -91         -91
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,217      -1,598      -1,600
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         745
    90.00 Outlays...........................         372        -190        -534
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................         745
      Outlays...........................         372        -190        -534
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................
      Outlays...........................                                 -17
                                        ------------------------------------
    Total:
      Budget Authority..................         745
      Outlays...........................         372        -190        -551
                                        ====================================

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
              STAFFORD LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      26,412      20,540      15,551
    2251  Repayments and prepayments........      -5,039      -4,163      -4,101
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -754        -704        -548
    2263    Terminations for default that
              result in claim payments......         -79        -122        -105
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      20,540      15,551      10,797
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      20,540      15,551      10,794
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......       9,723       9,237       8,083
    2331    Disbursements for guaranteed
              loan claims...................         928         704         548
    2351    Repayments of loans receivable..      -1,048      -1,442        -880
    2361    Write-offs of loans receivable..        -179        -170        -160
    2364    Other adjustments, net..........        -187        -246        -150
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       9,237       8,083       7,441
    ----------------------------------------------------------------------------

              PLUS/SLS LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       3,914       3,043       2,144
    2251  Repayments and prepayments........        -829        -805        -729

    [[Page 349]]

          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -38         -77         -51
    2263    Terminations for default that
              result in claim payments......          -4         -17         -12
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       3,043       2,144       1,352
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       3,043       2,144       1,352
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......       2,970       2,766       2,534
    2331    Disbursements for guaranteed
              loan claims...................          47          77          51
    2351    Repayments of loans receivable..        -166        -219        -219
    2361    Write-offs of loans receivable..         -55         -51         -48
    2364    Other adjustments, net..........         -30         -39         -39
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       2,766       2,534       2,279
    ---------------------------------------------------------------------------
        \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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          89          71          87
    33.0  Investments and loans.............         678         806         565
    41.0  Grants, subsidies, and
            contributions...................         739         399         250
    42.0  Insurance claims and indemnities..          83         122         105
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,589       1,398       1,007
    ---------------------------------------------------------------------------

                Federal Family Education Loan Liquidating Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-4-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.03   Default claims..................                                   3
    01.06   Supplemental preclaims
              assistance....................                                  -2
    01.07   Contract collection costs.......                                   1
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......                                   1
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                   2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  18
    22.30 Unobligated balance expiring......                                 -17
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......                                   1
    23.95 New obligations...................                                  -2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                                  18
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                   2
    73.20 Total outlays (gross).............                                  -1
    ----------------------------------------------------------------------------

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

        Offsets:
          Against gross budget authority and outlays:

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

    88.40         Federal collections on
                    defaulted loans.........                                  -5
    88.40         Offsets against Federal
                    tax refunds.............                                  -4
    88.40         Reimbursements from
                    guaranty agencies.......                                  -6
                Other collections:

    88.40         Federal collections on
                    defaulted loans.........                                  -1
    88.40         Offsets against Federal
                    tax refunds.............                                  -1
    88.40         Reimbursements from
                    guaranty agencies.......                                  -1
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                 -18
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................                                 -17
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-4-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
              STAFFORD LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........
    2261  Adjustments: Terminations for
            default that result in loans
            receivable......................                                  -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......
    2331    Disbursements for guaranteed
              loan claims...................                                   2
    2351    Repayments of loans receivable..                                 -16
    2361    Write-offs of loans receivable..
    2364    Other adjustments, net..........                                  -3
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......                                 -17
    ----------------------------------------------------------------------------

              PLUS/SLS LOANS
        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......
    2351    Repayments of loans receivable..                                  -2
    2361    Write-offs of loans receivable..
    2364    Other adjustments, net..........
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......                                  -2
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-4-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................                                   1
    33.0  Investments and loans.............                                   3
    41.0  Grants, subsidies, and
            contributions...................                                  -2
                                               ---------   ---------  ----------
    99.9    Total obligations...............                                   2
    ---------------------------------------------------------------------------

              College Housing and Academic Facilities Loans Program

        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, $698,000. (Department of
    Education Appropriations Act, 1998.)

      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,

    [[Page 350]]

    [$104,000] $96,000. (Department of Education Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Federal administration............           1           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              99.5).........................           1           1           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           1           1           1
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1
    22.70 Balance of authority to borrow
            withdrawn.......................          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           1           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:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           5           2           2
    73.10 New obligations...................           1           1           1
    73.20 Total outlays (gross).............          -2          -1          -1
    73.45 Adjustments in unexpired accounts.          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           2           2           2
    ----------------------------------------------------------------------------

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

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

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

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct loan subsidy outlays:
    1340  Subsidy outlays...................           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. Beginning in 1998, the Department has
    consolidated funding for administrative activities for CHAFL, HEFL and
    CHL under a single account. The 1999 request includes funding for
    personnel and other discretionary costs for all three programs. Loan
    servicing and architectural and engineering services for the HEFL and
    CHL programs are funded from their respective liquidating accounts.

        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 another loan
    for $4.7 million was made in 1997. Additional loans are expected in 1998
    and 1999. No subsidy appropriations are required. The 1999 budget
    requests funds for continuing Federal administrative activities only.

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......           7           7           7
    ---------------------------------------------------------------------------

         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      1997 actual   1998 est.   1999 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           2           2
    23.95 New obligations...................          -1          -1          -1
    ----------------------------------------------------------------------------

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

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

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

            Obligated balance:
              Uninvested:
    72.40       Fund Balance................          22          15          10
    72.40       Interest....................                       1
    72.95   Obligate balance: Subsidy.......           4           2           2
                                               ---------   ---------  ----------

    [[Page 351]]

    72.99     Total unpaid obligations,
                start of year...............          26          18          12
    73.10 New obligations...................           1           1           1
    73.20 Total financing disbursements
            (gross).........................          -4          -7          -3
    73.40 Adjustments in expired accounts...          -4
          Unpaid obligations, end of year:

            Obligated balance:
              Uninvested:
    74.40       Fund Balance................          15          10           9
    74.40       Interest....................           1
    74.95   Receivables from program account           2           2           2
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................          18          12          11
    87.00 Total financing disbursements
            (gross).........................           4           7           3
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Principal repayments..........
    88.25     Interest on uninvested funds..          -1          -1          -1
    88.40     Interest repayments...........          -1          -1          -1
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -2          -2          -2
    88.95 Change in receivables from program
            accounts........................           2
    88.96 Adjustment to orders on hand from
            Federal sources.................          -1
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........           2           5           1
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4252-0-3-502      1997 actual   1998 est.   1999 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........          14          18          23
    1231  Disbursements: Direct loan
            disbursements...................           4           5           1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          18          23          24
    ---------------------------------------------------------------------------

        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, 1999.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4252-0-3-502    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1106    Federal assets: Receivables, net           8              4             2              3
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..          11             18            22             22
    1402    Interest receivable.............                                        1              1
    1405    Allowance for subsidy cost (-)..          -4             -1
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....           7             17            23             23
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          15             21            25             26
        LIABILITIES:
          Federal liabilities:

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

        College Housing and Academic Facilities Loans Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            43.0)...........................          23          28          25
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          40          58
    22.00 New budget authority (gross)......          68          59          57
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          17
    22.40 Capital transfer to general fund..          -4         -20          -4
    22.60 Redemption of debt................         -40         -69         -28
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          81          28          25
    23.95 New obligations...................         -23         -28         -25
    24.40 Unobligated balance available, end
            of year: Uninvested.............          58
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          68          59          57
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          46          28          32
    73.10 New obligations...................          23          28          25
    73.20 Total outlays (gross).............         -24         -24         -24
    73.45 Adjustments in unexpired accounts.         -17
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          28          32          33
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          19          22          23
    86.98 Outlays from permanent balances...           5           2           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          24          24          24
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of principal.....         -44         -40         -38
    88.40       Interest received on loans..         -24         -19         -19
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -68         -59         -57
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................         -44         -35         -33
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
              CHAFL LIQUIDATING
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         153         154         150
    1231  Disbursements: Direct loan
            disbursements...................          11
    1251  Repayments: Repayments and
            prepayments.....................         -10          -4
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         154         150         150
    ----------------------------------------------------------------------------

              HIGHER EDUCATION FACILITIES
                  LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          48          44          25
    1251  Repayments: Repayments and
            prepayments.....................          -4         -19          -4
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          44          25          21
    ----------------------------------------------------------------------------

              COLLEGE HOUSING LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         446         416         380
    1251  Repayments: Repayments and
            prepayments.....................         -30         -36         -31
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         416         380         349
    ---------------------------------------------------------------------------

        The College Housing and Academic Facilities Loans Liquidating
    Account records all cash flows to and from the Gov

    [[Page 352]]

    ernment 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. Beginning in 1998, the Department
    has consolidated the three loan programs into the CHAFL Liquidating
    account for budget presentation purposes only. The three individual
    programs 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........                                   1
    2231  Disbursements of new guaranteed
            loans...........................                       1           4
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........                       1           5
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..                       1           5
    ---------------------------------------------------------------------------
        Note.--The appropriations language for this program specifies a
    limitation that applies to direct and guaranteed loans in total.

        In 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 of title
    II, and parts A, B, 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, [$431,438,000]
    $689,367,000: Provided, That [of the amount provided for section 10101
    of part A of title X of the Elementary and Secondary Education Act of
    1965, $1,000,000 shall be awarded to the National Museum of Women in the
    Arts; $500,000 shall be for enhanced teacher training in reading in the
    District of Columbia; $5,000,000 shall be for innovative learning
    opportunities for at-risk children at children's museums in
    Philadelphia, Baltimore, Boston and museums in Chicago; $8,000,000 shall
    be for a demonstration of public school facilities repair and
    construction to the Iowa Department of Education; $350,000 shall be
    awarded to the White Plains City School District to expand an after
    school program; $100,000 shall be for the Montgomery County,
    Pennsylvania library network; $55,000 shall be awarded to the St.
    Stephen Life Center in Louisville, Kentucky;] notwithstanding sections
    912 and 931 of the Educational Research, Development, Dissemination, and
    Improvement Act, $50,000,000 shall be available for education research
    to be planned and carried out in collaboration with the National Science
    Foundation and other appropriate agencies; and $25,000,000 shall be
    available to demonstrate effective approaches to comprehensive school
    reform to be allocated and expended in accordance with the instructions
    relating to this [proviso] activity in the statement of managers on the
    conference report accompanying [this Act] Public Law 105-78: Provided
    further, That the funds made available for comprehensive school reform
    shall become available on July 1, [1998] 1999, and remain available
    through September 30, [1999] 2000, and in carrying out this initiative,
    the Secretary and the States shall support only approaches that show the
    most promise of enabling children to meet challenging State content
    standards and challenging State student performance standards based on
    reliable research and effective practices, and include an emphasis on
    basic academics and parental involvement[: Provided further, That (1) of
    the amount appropriated under this heading and notwithstanding any other
    provision of law, the Secretary of Education may award $1,000,000 to a
    State educational agency (as defined in section 14101 of the Elementary
    and Secondary Education Act of 1965 (20 U.S.C. 8801)) to pay for
    appraisals, resource studies, and other expenses associated with the
    exchange of State school trust lands within the boundaries of a national
    monument for Federal lands outside the boundaries of the monument; and
    (2) the State educational agency is eligible to receive a grant under
    paragraph (1) only if the agency serves a State that--]
            [(A) has a national monument declared within the State under the
        authority of the Act entitled ``An Act for the preservation of
        American antiquities'', approved June 8, 1906 (16 U.S.C. 431 et
        seq.) (commonly known as the Antiquities Act of 1906) that
        incorporates more than 100,000 acres of State school trust lands
        within the boundaries of the national monument; and]
            [(B) ranks in the lowest 25 percent of all States when comparing
        the average per pupil expenditure (as defined in section 14101 of
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801))
        in the State to the average per pupil expenditure for each State in
        the United States]. (Department of Education Appropriations Act,
        1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Research, development and dissemination:

    00.01   National education research
              institutes....................          54          54          54
    00.02   Interagency research initiative.                                  50
    00.03   Regional educational
              laboratories..................          51          56          56
    00.04   National dissemination
              activities....................          19          19          19
    00.05 Statistics........................          50          59          68
    00.06 Assessment........................          33          35          40
    00.07 Eisenhower professional
            development national activities.          13          23          50
          Educational technology:

            Technology for education:
    00.08     Technology literacy challenge
                fund........................         200
    00.09     Technology innovation
                challenge grants............          57
    00.10     Regional technology in
                education consortia.........          10
    00.11   Star schools....................          30
    00.12   Ready to learn television.......           7
    00.13   Telecommunications demonstration
              project for mathematics.......           1
    00.14 Fund for the improvement of
            education.......................          40         108         105
    00.15 Javits gifted and talented
            education.......................           5           6           6
    00.16 Eisenhower regional mathematics
            and science education consortia.          15          15          25
    00.17 21st Century community learning
            centers.........................           1          40         200
    00.18 National writing project..........           3           5           5
    00.19 Civic education...................           4           6           6
    00.20 International education exchange..           5           5           5
                                               ---------   ---------  ----------
    10.00   Total obligations...............         598         431         689
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         598         431         689
    23.95 New obligations...................        -598        -431        -689
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         598         431         689
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         358         610         461
    73.10 New obligations...................         598         431         689

    [[Page 353]]

    73.20 Total outlays (gross).............        -340        -580        -529
    73.40 Adjustments in expired accounts...          -6
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         610         461         621
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          91         115         164
    86.93 Outlays from current balances.....         248         465         365
    86.98 Outlays from permanent balances...           1           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         340         580         529
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         598         431         689
    90.00 Outlays...........................         340         580         529
    ---------------------------------------------------------------------------

        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.
            Interagency research initiative.--Funding for an education
        research initiative is proposed as part of the Research Fund for
        America. This proposal highlights the Administration's priority to
        provide needed and sustained investments in important Federal
        research programs on a deficit neutral basis. A discussion of the
        Research Fund for America, and two other funds for the environment
        and transportation, can be found in Section II of the Budget volume.
            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. Funds also support the Eisenhower National Mathematics and
    Science Clearinghouse and the National Board for Professional Teaching
    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.

        21st Century community learning centers.--Funds support competitive
    grants to centers providing school-based academic and recreational
    services to youth and other members of the community. In expanding the
    current program, the Department proposes to better target funding to
    higher-need communities, codify the current priority on enriching after-
    school programs for children, reserve 10 percent of funds for community-
    based organizations and provide authority for a local matching
    requirement to enable services for up to 500,000 children in 1999 and to
    ensure that programs become self-sustaining after receiving funding.

        National writing project.--Funds support a national professional
    development project to improve the teaching of writing by teachers of
    all subject areas.

        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 91-1100-0-1-503      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............           1           1           1
    24.0  Printing and reproduction.........           3           3           3
    25.1  Advisory and assistance services..           6           6           6
    25.2  Other services....................          63          72          97
    25.3  Purchases of goods and services
            from Government accounts........          11          11          11
    25.5  Research and development contracts          63          68          68
    25.7  Operation and maintenance of
            equipment.......................           7           7           7
    31.0  Equipment.........................           1           1           1
    41.0  Grants, subsidies, and
            contributions...................         442         261         493
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         597         430         687
    99.5  Below reporting threshold.........           1           1           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............         598         431         689
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          12          13          13
    ---------------------------------------------------------------------------

                             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, [$341,064,000] $362,000,000. (Department of Education
    Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct program....................         325         341         362
    09.01 Reimbursable program..............           6
                                               ---------   ---------  ----------
    10.00   Total obligations...............         331         341         362
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         332         341         362

    [[Page 354]]

    22.30 Unobligated balance expiring......          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         331         341         362
    23.95 New obligations...................        -331        -341        -362
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         326         341         362
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           6
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         332         341         362
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         119         119         117
    73.10 New obligations...................         331         341         362
    73.20 Total outlays (gross).............        -328        -342        -353
    73.40 Adjustments in expired accounts...          -3
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         119         117         126
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         255         256         271
    86.93 Outlays from current balances.....          67          79          76
    86.97 Outlays from new permanent
            authority.......................           3
    86.98 Outlays from permanent balances...           3           7           7
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         328         342         353
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

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

        Net budget authority and outlays:
    89.00 Budget authority..................         326         341         362
    90.00 Outlays...........................         322         342         353
    ---------------------------------------------------------------------------

        Note.--Includes $3 million in budget authority in 1999 for Indian
    education Federal administration previously financed from:

                            (In millions of dollars)

                                                               1997    1998

    Office of Elementary and Secondary Education, Indian
     education..............................................       3       3

        The Program Administration account includes the direct Federal costs
    of providing grants and administering elementary and secondary
    education, bilingual education, Indian 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 providing administrative services to other agencies.

        Also included in this account are contributions from the public.
    Activities supported include the Goals 2000 Teachers' Forum, School
    Recognition, Professional Development Awards, and the Gifts and Bequests
    Miscellaneous Fund. No new contributions are currently anticipated for
    1999.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         138         147         153
    11.3      Other than full-time permanent          13          10          10
    11.5      Other personnel compensation..           2           2           3
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         153         159         166
    12.1    Civilian personnel benefits.....          30          33          35
    13.0    Benefits for former personnel...           1
    21.0    Travel and transportation of
              persons.......................           5           7           8
    23.1    Rental payments to GSA..........          22          25          25
    23.3    Communications, utilities, and
              miscellaneous charges.........          18          14          15
    24.0    Printing and reproduction.......           8           7           8
    25.1    Advisory and assistance services           5           5           5
    25.2    Other services..................          12          22          23
    25.3    Purchases of goods and services
              from Government accounts......          13          12          12
    25.4    Operation and maintenance of
              facilities....................           1
    25.7    Operation and maintenance of
              equipment.....................          45          46          53
    26.0    Supplies and materials..........           2           2           2
    31.0    Equipment.......................           8           8           7
    32.0    Land and structures.............           2           1           3
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         325         341         362
    99.0  Reimbursable obligations..........           6
                                               ---------   ---------  ----------
    99.9    Total obligations...............         331         341         362
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......       2,602       2,635       2,666
    ---------------------------------------------------------------------------

                             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, [$61,500,000] $68,000,000. (Department of Education Appropriations
    Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Civil rights......................          55          62          68
                                               ---------   ---------  ----------
    10.00   Total obligations...............          55          62          68
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          55          62          68
    23.95 New obligations...................         -55         -62         -68
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          55          62          68
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          11           6           9
    73.10 New obligations...................          55          62          68
    73.20 Total outlays (gross).............         -59         -59         -64
    73.40 Adjustments in expired accounts...          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           6           9          13
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          50          53          57
    86.93 Outlays from current balances.....           9           6           7
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          59          59          64
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          55          62          68
    90.00 Outlays...........................          59          59          64
    ---------------------------------------------------------------------------

        The Office for Civil Rights is responsible for ensuring that no
    person is unlawfully discriminated against on the basis

    [[Page 355]]

    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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          36          39          41
    11.3    Other than full-time permanent..           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          37          40          42
    12.1  Civilian personnel benefits.......           7           8           9
    21.0  Travel and transportation of
            persons.........................           1           1           1
    23.1  Rental payments to GSA............           4           5           5
    25.2  Other services....................                       1           1
    25.3  Purchases of goods and services
            from Government accounts........           2           2           2
    25.7  Operation and maintenance of
            equipment.......................           1           2           3
    26.0  Supplies and materials............           1
    31.0  Equipment.........................           1           1           2
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..          54          60          65
    99.5  Below reporting threshold.........           1           2           3
                                               ---------   ---------  ----------
    99.9    Total obligations...............          55          62          68
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         681         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, [$30,242,000] $31,242,000. (Department of Education Appropriations
    Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Inspector General.................          30          30          31
                                               ---------   ---------  ----------
    10.00   Total obligations...............          30          30          31
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          30          30          31
    23.95 New obligations...................         -30         -30         -31
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          30          30          31
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           6           5           5
    73.10 New obligations...................          30          30          31
    73.20 Total outlays (gross).............         -30         -30         -30
    73.40 Adjustments in expired accounts...          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           5           5           6
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          26          25          26
    86.93 Outlays from current balances.....           4           5           4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          30          30          30
    ----------------------------------------------------------------------------

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

        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          16          17          18
    11.5    Other personnel compensation....           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          17          18          19
    12.1  Civilian personnel benefits.......           4           4           4
    21.0  Travel and transportation of
            persons.........................           2           2           2
    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           1           1
    31.0  Equipment.........................           1
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..          28          29          30
    99.5  Below reporting threshold.........           2           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          30          30          31
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         280         285         285
    ---------------------------------------------------------------------------

                             Headquarters Renovation

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1500-0-1-503      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................           5           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           6           1
    23.95 New obligations...................          -5          -1
    24.40 Unobligated balance available, end
            of year: Uninvested.............           1
    ----------------------------------------------------------------------------

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

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           1           6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           1           6
    ---------------------------------------------------------------------------

        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 remain

    [[Page 356]]

    ing 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           1
    25.7  Operation and maintenance of
            equipment.......................           2
    31.0  Equipment.........................           1           1
    32.0  Land and structures...............           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............           5           1
    ---------------------------------------------------------------------------

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    Offsetting receipts from the public:
      91-022100  FFEL Guarantee agency
        reserve recoveries..................          54
        Legislative proposal, subject to
          PAYGO.............................
      91-291500  Repayment of loans, capital
        contributions, higher education
        activities, Education...............          44
                                               ---------   ---------  ----------
    General Fund Offsetting receipts from
     the public.............................          98
    ---------------------------------------------------------------------------

                               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.

                               (transfer of funds)

        Sec. 304. 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 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. 305. (a) Notwithstanding any other provision of Federal law,
    no funds provided to the Department of Education or to an applicable
    program (as defined in section 400(c)(1) of the General Education
    Provisions Act (20 U.S.C. 1221(c)(1))), in this Act or in any other Act
    in fiscal year 1998, may be used to field test, pilot test, implement,
    administer or distribute in any way, any national tests.
         (b) Exception.--Subsection (a) shall not apply to the Third
    International Math and Science Study or the National Assessment of
    Educational Progress.]
        [Sec. 306. (a) Study.--The National Academy of Sciences, in
    consultation with the National Governors Association, the National
    Conference of State Legislatures, the White House, the National
    Assessment Governing Board, and the Congress, shall conduct a
    feasibility study to determine if an equivalency scale can be developed
    that would allow test scores from commercially available standardized
    tests and State assessments to be compared with each other and the
    National Assessment of Educational Progress.
         (b) Report of Findings to Congress.--(1) The National Academy of
    Sciences shall submit a written report to the White House, the Committee
    on Education and the Workforce of the House of Representatives, the
    Committee on Labor and Human Resources of the Senate, and the Committees
    on Appropriations of the House of Representatives and the Senate not
    later than September 1, 1998.
         (2) The National Academy of Sciences shall submit an interim report
    no later than June 15, 1998.]

                       National Assessment Governing Board

        Sec. [307] 305. (a) Notwithstanding any other provision of law, the
    exclusive authority over all policies, direction, and guidelines for
    [developing] voluntary national tests [pursuant to contract RJ97153001
    previously entered into between the Department of Education and the
    American Institutes for Research and executed on August 15, 1997,] shall
    be vested in the National Assessment Governing Board established under
    section 412 of the National Education Statistics Act of 1994 (20 U.S.C.
    9011)[; Provided, That within 90 days after the date of enactment of
    this Act, the Board shall review the national test development contract
    in effect on the date of enactment of this Act, and modify the contract
    as the Board determines necessary and not inconsistent with this Act or
    applicable laws: Provided further, That if the contract cannot be
    modified to the extent determined necessary by the Board, the contract
    shall be terminated and the Board shall negotiate a new contract, under
    the Board's exclusive control, for the tests, not inconsistent with this
    Act or applicable laws].
         (b) In carrying out its exclusive authority for [developing]
    voluntary national tests [pursuant to contract RJ97153001, any
    subsequent contract related thereto, or any contract modification
    pursuant to subsection (a)], the National Assessment Governing Board
    shall determine--
             (1) the extent to which test items selected for use on the
        tests are free from racial, cultural or gender bias;
             (2) whether the test development process and test items
        adequately assess student reading and mathematics comprehension in
        the form most likely to yield accurate information regarding student
        achievement in reading and mathematics;
             (3) whether the test development process and test items take
        into account the needs of disadvantaged, limited English proficient
        and disabled students; and
             (4) whether the test development process takes into account how
        parents, guardians, and students will appropriately be informed
        about testing content, purpose and uses.
        [Sec. 308. Study.--The National Academy of Sciences shall, not later
    than September 1, 1998, submit a written report to the Committee on
    Education and the Workforce of the House of Representatives, the
    Committee on Labor and Human Resources of the Senate, and the Committees
    on Appropriations of the House and Senate that evaluates all test items
    developed or funded by the Department of Education or any other agency
    of the Federal Government pursuant to contract RJ97153001, any
    subsequent contract related thereto, or any contract modification by the
    National Assessment Governing Board pursuant to section 307 of this Act,
    for--
             (1) the technical quality of any test items for 4th grade
        reading and 8th grade mathematics;
             (2) the validity, reliability, and adequacy of developed test
        items;
             (3) the validity of any developed design which links test
        results to student performance;
             (4) the degree to which any developed test items provide valid
        and useful information to the public;
             (5) whether the test items are free from racial, cultural, or
        gender bias;
             (6) whether the test items address the needs of disadvantaged,
        limited English proficient and disabled students; and
             (7) whether the test items can be used for tracking, graduation
        or promotion of students.]
        [Sec. 309. (a) Study.--The National Academy of Sciences shall
    conduct a study and make written recommendations on appropriate methods,
    practices, and safeguards to ensure that--
             (1) existing and new tests that are used to assess student
        performance are not used in a discriminatory manner or
        inappropriately for student promotion, tracking or graduation; and

    [[Page 357]]

             (2) existing and new tests adequately assess student reading
        and mathematics comprehension in the form most likely to yield
        accurate information regarding student achievement of reading and
        mathematics skills.
         (b) Report to Congress.--The National Academy of Sciences shall
    submit a written report to the White House, the National Assessment
    Governing Board, the Committee on Education and the Workforce of the
    House of Representatives, the Committee on Labor and Human Resources of
    the Senate, and the Committees on Appropriations of the House and Senate
    not later than September 1, 1998.]
        Sec. [310. (a)] 306. The Federal Government shall not require any
    State or local educational agency or school to administer or implement
    any pilot or field test in any subject or grade, nor shall the Federal
    Government require any student to take any national test in any subject
    or grade.
        [(b) Nothing in section 309(a) shall be construed as affecting the
    National Assessment of Educational Progress or the Third International
    Math and Science Study.]
        Sec. [311] 307. No Federal, State or local educational agency may
    require any private or parochial school student, or home-schooled
    individual, to take any national test, or pilot or field test [developed
    under this Act, contract RJ97153001, or any contract related thereto,]
    for a national test without the written consent of the parents or legal
    guardians of the student or individual.
        [Sec. 312. Notwithstanding any other provision of law, any
    institution of higher education which receives funds under title III of
    the Higher Education Act, except for grants made under section 326, may
    use up to 20 percent of its award under part A or part B of the Act for
    endowment building purposes authorized under section 331. Any
    institution seeking to use part A or part B funds for endowment building
    purposes shall indicate such intention in its application to the
    Secretary and shall abide by departmental regulations governing the
    endowment challenge grant program.]

                              [(transfer of funds)]

        [Sec. 313. Notwithstanding any other provision of the Higher
    Education Act, $280,000,000 of the balances of returned reserves,
    formerly held by the Higher Education Assistance Foundation, that are
    currently held in Higher Education Assistance Claims Reserves, Treasury
    account number 91X6192, shall be transferred to Miscellaneous Receipts
    of the Treasury, within 60 days of enactment of this Act.]

                                  [impact aid]

        [Sec. 314. (a) In General.--From funds made available to carry out
    section 3(d)(2)(B) of the Act of September 30, 1950 (Public Law 874,
    81st Congress) for fiscal year 1994 that remain after making 100 percent
    of the payments local educational agencies are eligible to receive under
    such section for such fiscal year, the Secretary of Education shall make
    payments to applicants for fiscal year 1996 pursuant to subsection (b).]
         [(b) Award Basis.--
             (1) In general.--Except as provided in paragraph (2), the
        Secretary of Education shall make a payment to each applicant in an
        amount that bears the same relation to the total amount of remaining
        funds described in subsection (a) as the number of children who were
        in average daily attendance in the schools served by the applicant
        for fiscal year 1996 bears to the total number of all such children
        in the schools served by all applicants for such year.]
            [(2) Special rule.--Any applicant that had less than 200
        children in average daily attendance in the schools served by the
        applicant for fiscal year 1996 shall receive a payment under this
        section for fiscal year 1996 in an amount equal to not less than
        $175,000.]
            [(3) Data.--For purposes of computing payments under this
        section, the Secretary of Education shall use data that--
                 (A) was included in each applicant's application for
            assistance under section 8003 of the Elementary and Secondary
            Education Act of 1965 (20 U.S.C. 7703) for fiscal year 1996; and
                 (B) is verified by the Secretary.]
        [(c) Definition of Applicant.--For purposes of this section, the
    term ``applicant'' means an applicant for assistance under section 8003
    of the Elementary and Secondary Education Act of 1965 for fiscal year
    1996 having 1 of the following applicant numbers for such year:
             (1) 51-0904.
             (2) 51-4203.
             (3) 51-1903.
             (4) 51-0010.
             (5) 51-0811.
             (6) 51-2101.]
        [Sec. 315. Section 10304 of the Elementary and Secondary Education
    Act of 1965 is amended by adding at the end the following:
         ``(g) Tribally Controlled Schools.--Each State that receives a
    grant under this part and designates a tribally controlled school as a
    charter school shall not consider payments to a school under the
    Tribally Controlled Schools Act of 1988 (25 U.S.C. 2507) in
    determining--
             ``(1) the eligibility of the school to receive any other
        Federal, State, or local aid; or
             ``(2) the amount of such aid.''.] (Department of Education
        Appropriations Act, 1998.)