Appendix - Department of Education

[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)

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

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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)

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

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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)

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)

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)

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)

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

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)

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)

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)

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)

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)

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

Vocational and Adult Education

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

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

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)

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)

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)

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)

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)

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)

[[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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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

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)

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)

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)

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)

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)

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)

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)

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.)