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


                     THE BUDGET FOR FISCAL YEAR 1999

[[Page 317]]


                         DEPARTMENT OF EDUCATION

 
              OFFICE OF ELEMENTARY AND SECONDARY EDUCATION

                              Federal Funds

General and special funds:

                            Education Reform

    For carrying out activities authorized by titles III and IV of the 
Goals 2000: Educate America Act, the School-to-Work Opportunities Act, 
and sections 3122, 3132, 3136, and 3141 and parts B, C, and D of title 
III of the Elementary and Secondary Education Act of 1965, 
[$1,275,035,000] $1,347,000,000, of which [$464,500,000] $474,000,000 
for the Goals 2000: Educate America Act and [$200,000,000] $125,000,000 
for the School-to-Work Opportunities Act shall become available on July 
1, [1998] 1999, and remain available through September 30, [1999] 2000, 
and of which $87,000,000 shall be for section 3122: Provided, That none 
of the funds appropriated under this heading shall be obligated or 
expended to carry out section 304(a)(2)(A) of the Goals 2000: Educate 
America Act, except that no more than [$1,500,000] $2,000,000 may be 
used to carry out activities under section 314(a)(2) of that Act: 
Provided further, That section 315(a)(2) of the Goals 2000 Act shall not 
apply: Provided further, That up to one-half of 1 percent of the amount 
available under section 3132 shall be set aside for the outlying areas, 
to be distributed on the basis of their relative need as determined by 
the Secretary in accordance with the purposes of the program: Provided 
further, That if any State educational agency does not apply for a grant 
under section 3132, that State's allotment under section 3131 shall be 
reserved by the Secretary for grants to local educational agencies in 
that State that apply directly to the Secretary according to the terms 
and conditions published by the Secretary in the Federal Register[: 
Provided further, That of the funds made available under section 3136, 
$5,000,000 shall be provided to the Hospitals, Universities, Businesses, 
and Schools program to develop a regional information infrastructure in 
the mid-Atlantic region, $7,300,000 shall be for the ``I Can Learn'' 
project to integrate technology into eighth grade algebra classrooms and 
$800,000 shall be provided for a distance education network involving a 
consortium of nine school districts and Nicolet Area Technical College: 
Provided further, That of the amount available for title III, part B of 
the Elementary and Secondary Education Act of 1965, as amended, 
$8,000,000 shall be awarded to continue and expand the Iowa 
Communication Network statewide fiber optic demonstration project]. 
(Department of Education Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Goals 2000:

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

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

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

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

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

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

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

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

    Goals 2000:
        State and local education systemic improvement.--State grants 
    support State and local education improvement efforts to help all 
    students reach challenging academic standards in all 50 States. At 
    least 90 percent of the funds are provided to local educational 
    agencies. Funds also support evaluation of educational reform 
    efforts.
        Parental assistance.--Centers in all 50 States would continue to 
    help provide parents with knowledge and skills they need to 
    participate effectively in their children's education.
        School-to-Work Opportunities.--School-to-work programs are 
    jointly administered by the Departments of Education and Labor. An 
    identical amount is provided for the Department of Labor to support 
    these activities. To date, competitive, 5-year grants have been 
    awarded to 37 States that have completed and are ready to implement 
    their school-to-work plans. Remaining States are expected to receive 
    implementation grants in 1998.
        Direct grants are also provided to local partnerships serving 
    young people who live in high-poverty urban and rural areas, as well 
    as partnerships that serve Indian youth. These funds also support 
    national evaluation, research, and development activities to provide 
    national leadership and analysis of school-to-work opportunities 
    initiatives.

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

[[Page 318]]

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

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

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

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

               Object Classification (in millions of dollars)

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

                                

                     Education for the Disadvantaged

    For carrying out title I of the Elementary and Secondary Education 
Act of 1965, [and section 418A of the Higher Education Act,] 
[$8,021,827,000] $8,480,892,000, of which [$6,553,249,000] 
$6,985,106,000 shall become available on July 1, [1998] 1999, and shall 
remain available through September 30, [1999] 2000, and of which 
$1,448,386,000 shall become available on October 1, [1998] 1999 and 
shall remain available through September 30, [1999] 2000, for academic 
year [1998-1999] 1999-2000: Provided, That [$6,273,212,000] 
$6,274,000,000 shall be available for basic grants under section 1124: 
Provided further, That up to $3,500,000 of these funds shall be 
available to the Secretary on October 1, [1997] 1998, to obtain updated 
local-educational-agency-level census poverty data from the Bureau of 
the Census: Provided further, That [$1,102,020,000] $1,200,000,000 shall 
be available for concentration grants under section 1124A, $293,000,000 
shall be available for targeted grants under section 1125, [$6,977,000] 
$8,900,000 shall be available for evaluations under section 1501 and not 
more than [$7,500,000] $8,500,000 shall be reserved for section 1308, of 
which not more than $3,000,000 shall be reserved for section 1308(d): 
[Provided further, That grant awards under section 1124 and 1124A of 
title I of the Elementary and Secondary Education Act shall be made to 
each State or local educational agency at no less than 100 percent of 
the amount such State or local educational agency received under this 
authority for fiscal year 1997 under Public Laws 104-208 and 105-18: 
Provided further, That in determining State allocations under any other 
program administered by the Secretary, amounts provided under Public Law 
105-18, or equivalent amounts provided for in this Act, will not be 
taken into account in determining State allocations:] Provided further, 
That [$120,000,000] $150,000,000 shall be available under section 
1002(g)(2) to demonstrate effective approaches to comprehensive school 
reform to be allocated and expended in accordance with the instructions 
relating to this proviso in Public Law 105-78 and the statement of the 
managers on the conference report accompanying [this] that Act: 
[Provided further, That in carrying out this initiative, the Secretary 
and the States shall support only approaches that show the most promise 
of enabling children served by title I to meet challenging State content 
standards and challenging State student performance standards based on 
reliable research and effective practices, and include an emphasis on 
basic academics and parental involvement:] Provided further, That 
$35,000,000 shall be available under section 1002(g)(2) for transition 
to school projects that demonstrate innovative approaches for helping 
children from low-income families make transitions from preschool to 
kindergarten and the early elementary grades, and enable those children 
to meet high State standards: Provided further, That [such funds] no 
funds appropriated under section 1002(g)(2) shall [not] be available for 
section 1503. (Department of Education Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Direct program:

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

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

    New budget authority (gross), detail:
      Current:

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

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

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

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

[[Page 319]]

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

    Offsets:
      Against gross budget authority and outlays:

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

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

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

    Grants to local educational agencies.--Funds will be allocated 
through the Basic, Concentration, and Targeted grant formulas for local 
programs that stress the achievement of challenging State education 
standards, support schoolwide improvement, integrate Title I assessment 
and curriculum with State systemic reforms, and target funds to high-
poverty schools. Up to $3.5 million in Basic Grant funds will be used to 
continue work needed to obtain updated poverty data at the local 
educational agency level from the Bureau of the Census for use in 
allocating Title I funds beginning in 1999, as required by the statute.

    Capital expenses.--Funds are provided by formula to States to 
support phase-out funding to local educational agencies that entered 
into long-term contracts and other arrangements associated with 
providing educational services to eligible children attending non-public 
schools before the Supreme Court reversed the Aguilar v. Felton decision 
in June 1997.

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

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

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

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

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

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

    Reimbursable program.--This activity consists of funds appropriated 
in other accounts for consolidated grants to the insular areas.

               Object Classification (in millions of dollars)

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

      Direct obligations:

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

                                

                     Education for the Disadvantaged

              (Legislative proposal, not subject to PAYGO)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

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

    Migrant education projects.--Under the Administration proposal for 
Title IV of that Act, funds would support grants to institutions of 
higher education and other non-profit agencies that assist migrant 
students to earn a high school equivalency certificate or to complete 
their first year of college.

                                

               Class Size Reduction and Teacher Financing

                (Legislative proposal, subject to PAYGO)

               Program and Financing (in millions of dollars)

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

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

[[Page 320]]



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

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

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

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

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

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

                                

                               Impact Aid

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

[[Page 321]]

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

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Payments for federally connected children:

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

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

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

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

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

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

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

    Basic support payments.--Payments would be made on behalf of 
approximately 302,000 federally connected children enrolled in 
approximately 900 school districts across the country. The request would 
provide an average payment of approximately $2,100 for each of these 
federally connected children.

    Supplemental payments for children with disabilities.--Payments 
would be made for additional assistance to school districts educating 
federally connected children with disabilities. Approximately 32,000 
such children are enrolled in school districts across the country. The 
request would provide approximately $1,300 in additional assistance for 
the education of each of these children.

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

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

               Object Classification (in millions of dollars)

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

                                

                       School Improvement Programs

    For carrying out school improvement activities authorized by titles 
II, IV[-A-1 and 2], V-A and B, [VI,] IX, X, and XIII of the Elementary 
and Secondary Education Act of 1965; the Stewart B. McKinney Homeless 
Assistance Act; and the Civil Rights Act of 1964; [$1,538,188,000] 
$1,272,800,000, of which [$1,246,300,000] $891,000,000 shall become 
available on July 1, [1998] 1999, and remain available through September 
30, [1999] 2000: Provided, That of the amount appropriated, $335,000,000 
shall be for Eisenhower professional development State grants under 
title II-B of the Elementary and Secondary Education Act of 1965 [of 
which $25,000,000 shall be for professional development in reading, 
$350,000,000 shall be for innovative education program strategies State 
grants under title VI-A of said Act and $750,000 shall be for an 
evaluation of comprehensive regional assistance centers under title XIII 
of said Act: Provided further, That of the amount made available for 
title IV-A-2, $350,000 shall be for the Yonkers Public Schools for 
innovative anti-drug and anti-violence activities.], and $125,000,000 
under title IV-A-1 of the Elementary and Secondary Education Act shall 
be awarded competitively by the Secretary to school districts based on 
the severity of their schools' drug or safety problems, or both, and 
their ability to develop and implement promising or proven programs and 
strategies to address those problems.

[[Page 322]]

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Professional development and program 
          innovation:

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

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

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

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

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

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

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

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

    Eisenhower professional development State grants.--Formula grants 
are provided to States, outlying areas, and the Bureau of Indian Affairs 
to support intensive, high-quality professional development in the core 
academic subject areas.

    Safe and drug-free schools and communities:
        State grants.--Formula grants are made to States, outlying 
    areas, and the Bureau of Indian Affairs to assist in combatting 
    school violence and drug use by the Nation's children and youth.
        National programs.--Funds support activities to promote safe and 
    disciplined academic environments and prevent the illegal use of 
    drugs and violence among students at all educational levels. Such 
    activities may include training, demonstrations, direct services to 
    school districts with severe drug and violence problems, program 
    evaluation, and development and dissemination of information and 
    materials.
        Coordinator Initiative.--Grants will be awarded to local 
    educational agencies to provide middle schools with trained 
    personnel who are experts in planning, designing, implementing, and 
    evaluating successful drug and violence prevention programs in 
    schools.

    Other programs.--

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

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

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

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

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

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

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

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

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

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

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1000-0-1-501      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
25.1  Advisory and assistance services..           3           3           3
25.2  Other services....................          19          20          16
25.7  Operation and maintenance of 
        equipment.......................           1           1           1
41.0  Grants, subsidies, and 
        contributions...................       1,403       1,517       1,252
                                           ---------   ---------  ----------

[[Page 323]]


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

                                

                       School Improvement Programs

              (Legislative proposal, not subject to PAYGO)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Professional development and program 
          innovation:

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

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

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

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

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

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

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

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

                                

                       [Child Literacy Initiative]

                     [(including transfer of funds)]

                         America Reads Challenge

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

               Program and Financing (in millions of dollars)

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

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

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

    New budget authority (gross), detail:
      Current:

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

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

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

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

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

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

               Object Classification (in millions of dollars)

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

[[Page 324]]



                                

                      Chicago Litigation Settlement

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

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

                                

                            Indian Education

    For expenses necessary to carry out, to the extent not otherwise 
provided, title IX, part A of the Elementary and Secondary Education Act 
of 1965, as amended, [and section 215 of the Department of Education 
Organization Act, $62,600,000] $66,000,000. (Department of Education 
Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

    The Indian Education program (Title IX, Part A of the Elementary and 
Secondary Education Act) supports the efforts of local educational 
agencies and tribal schools to im- prove teaching and learning for the 
Nation's American Indian and Alaska Native children.

    Grants to local educational agencies.--Formula grants support local 
educational agencies in their efforts to reform elementary and secondary 
school programs that serve Indian students, with the goal of ensuring 
that such programs are based on challenging State standards that are 
used for all students. In 1997, 1,250 formula grants were made to local 
educational agencies and certain tribal schools enrolling approximately 
448,465 Indian students.

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

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

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

               Object Classification (in millions of dollars)

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

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0101-0-1-501      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
1001  Total compensable workyears: Full-
        time equivalent employment......          23          24
---------------------------------------------------------------------------

                                


 
      OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS

                              Federal Funds

General and special funds:

                    Bilingual and Immigrant Education

    For carrying out, to the extent not otherwise provided, bilingual, 
foreign language and immigrant education activities authorized by parts 
A and C and section 7203 of title VII of the Elementary and Secondary 
Education Act of 1965, without regard to section 7103(b), [$354,000,000] 
$387,000,000: Provided, That State educational agencies may use all, or 
any part of, their part C allocation for competitive grants to local 
educational agencies: Provided further, That the Department of Education 
should only support instructional programs which ensure that students 
completely master English in a timely fashion (a period of three to five 
years) while meeting rigorous achievement standards in the academic 
content areas. (Department of Education Appropriations Act, 1998.)

[[Page 325]]

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

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

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

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

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1300-0-1-501      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
25.2  Other services....................           2           5           5
41.0  Grants, subsidies, and 
        contributions...................         259         349         382
                                           ---------   ---------  ----------
99.9    Total obligations...............         261         354         387
---------------------------------------------------------------------------

                                


 
         OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

                              Federal Funds

General and special funds:

                            Special Education

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

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      State grants:

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

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

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

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

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

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

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

    State Grants:
        Grants to States.--Formula grants are provided to States to 
    assist them in providing special education and related services to 
    children with disabilities ages 3 through 21.
        Preschool Grants.--Formula grants provide additional funds to 
    States to further assist them in providing special education and 
    related services to children with disabilities ages 3 through 5 
    served under the Grants to States program.

[[Page 326]]

        The goal of both of these programs is to improve results for 
    children with disabilities by assisting State and local educational 
    agencies to provide children with disabilities with access to high 
    quality education that will help them meet challenging standards and 
    prepare them for employment and independent living.
        Grants for infants and families.--Formula grants are provided to 
    assist States to continue to implement statewide systems of 
    coordinated, comprehensive, multi-disciplinary interagency programs 
    to provide early intervention services to children with 
    disabilities, birth through age 2, and their families.
        The goal of this program is to help States provide a 
    comprehensive system of early intervention services that will 
    enhance family and child outcomes.

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

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

    Performance data related to these goals include:

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

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

               Object Classification (in millions of dollars)

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

                                

             Rehabilitation Services and Disability Research

    [For carrying out, to the extent not otherwise provided, the 
Rehabilitation Act of 1973, the Technology-Related Assistance for 
Individuals with Disabilities Act, and the Helen Keller National Center 
Act, as amended, $2,591,195,000.] (Department of Education 
Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Direct program:

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

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

    New budget authority (gross), detail:
      Current:

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

    Net budget authority and outlays:
89.00 Budget authority..................       2,509       2,591
90.00 Outlays...........................       2,462       2,515         966
---------------------------------------------------------------------------

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

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

[[Page 327]]

               Object Classification (in millions of dollars)

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

      Direct obligations:

25.1    Advisory and assistance services           7           7
25.2    Other services..................           1           1
25.3    Purchases of goods and services 
          from Government accounts......           1           1
25.5    Research and development 
          contracts.....................           1           1
41.0    Grants, subsidies, and 
          contributions.................       2,500       2,581
                                           ---------   ---------  ----------
99.0      Subtotal, direct obligations..       2,510       2,591
99.0  Reimbursable obligations..........           2
                                           ---------   ---------  ----------
99.9    Total obligations...............       2,512       2,591
---------------------------------------------------------------------------

                                

             Rehabilitation Services and Disability Research

              (Legislative proposal, not subject to PAYGO)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0301-2-1-506      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

                   CONSUMER OUTCOMES (CASES CLOSED)

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

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

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

    Special demonstration programs.--Grants are made to develop 
innovative methods and comprehensive service programs to assist 
individuals with disabilities to achieve satisfactory vocational 
outcomes. The Department supports amending this program to authorize 
replication dissemination, and utilization projects and activities 
directed at State systemic change.

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

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

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

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

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

    Independent living.--Grants are awarded to States and nonprofit 
agencies for services designed to enable individuals with significant 
disabilities to achieve consumer-determined independent living goals.

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

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

[[Page 328]]

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

    National Institute on Disability and Rehabilitation Research.--The 
Institute carries out a comprehensive and coordinated program of 
rehabilitation research and related activities. Through grants and 
contracts, it supports conducting and disseminating research aimed at 
improving the lives of individuals with disabilities.

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

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

               Object Classification (in millions of dollars)

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

                                

           Special Institutions for Persons With Disabilities

                  american printing house for the blind

    For carrying out the Act of March 3, 1879, as amended (20 U.S.C. 101 
et seq.), [$8,186,000] $8,256,000. (Department of Education 
Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

    The Federal appropriation supports the production of free 
educational materials for students below the college level who are 
blind, research related to developing and improving products, and 
advisory services to consumer organizations on the availability and use 
of materials. In 1997, the portion of the Federal appropriation 
allocated to educational materials represented approximately 36 percent 
of the Printing House's total sales. The full appropriation represented 
approximately 30 percent of the Printing House's total budget.

                                

                national technical institute for the deaf

    For the National Technical Institute for the Deaf under titles I and 
II of the Education of the Deaf Act of 1986 (20 U.S.C. 4301 et seq.), 
[$44,141,000] $44,791,000: Provided, That from the amount available, the 
Institute may at its discretion use funds for the endowment program as 
authorized under section 207. (Department of Education Appropriations 
Act, 1998.)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

    This residential center provides postsecondary technical and 
professional education for people who are deaf to prepare them for 
employment, provides training, and conducts applied research into 
employment related aspects of deafness. In 1997, Federal appropriations 
represented 82 percent of the Institute's operating budget. The 
Institute may use appropriated funds for the Endowment Grant program. 
The request also includes funds for construction.

                                

                          gallaudet university

    For the Kendall Demonstration Elementary School, the Model Secondary 
School for the Deaf, and the partial support of Gallaudet University 
under titles I and II of the Education of the Deaf Act of 1986 (20 
U.S.C. 4301 et seq.), [$81,000,000] $83,480,000: Provided, That from the 
amount available, the University may at its discretion use funds for the 
endowment program as authorized under section 207. (Department of 
Education Appropriations Act, 1998.)

[[Page 329]]

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

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

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

    In 1997, the Federal appropriation represented 63.5 percent of the 
University's operating budget, excluding Federal financial aid, 
vocational rehabilitation, and competitive grants, and 96.9 percent of 
the operating budgets of the related elementary and secondary schools. 
The University may also use appropriated funds for the Endowment Grant 
program.

                                


 
                OFFICE OF VOCATIONAL AND ADULT EDUCATION

                              Federal Funds

General and special funds:

                     Vocational and Adult Education

    [For carrying out, to the extent not otherwise provided, the Carl D. 
Perkins Vocational and Applied Technology Education Act, the Adult 
Education Act, and the National Literacy Act of 1991, $1,507,698,000, of 
which $1,504,598,000 shall become available on July 1, 1998 and shall 
remain available through September 30, 1999; and of which $5,491,000 
from amounts available under the Adult Education Act shall be for the 
National Institute for Literacy under section 384(c): Provided, That, of 
the amounts made available for title II of the Carl D. Perkins 
Vocational and Applied Technology Education Act, $13,497,000 shall be 
used by the Secretary for national programs under title IV, without 
regard to section 451: Provided further, That the Secretary may reserve 
up to $4,998,000 under section 313(d) of the Adult Education Act for 
activities carried out under section 383 of that Act: Provided further, 
That no funds shall be awarded to a State Council under section 112(f) 
of the Carl D. Perkins Vocational and Applied Technology Education Act, 
and no State shall be required to operate such a Council.] (Department 
of Education Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Vocational education:

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

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

    New budget authority (gross), detail:
      Current:

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

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

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

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

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

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

[[Page 330]]

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

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

                        [In millions of dollars]

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

    Vocational and adult education.--In 1997, the Administration 
proposed to restructure Federal workforce-related education and training 
programs, including those under the Carl D. Perkins Vocational and 
Applied Technology Education Act, the Adult Education Act, and the 
National Literacy Act. Absent new authorizing legislation, Congress 
extended the authority of the Perkins Act, the Adult Education Act, and 
the National Literacy Act through the 1998 appropriations act. The 1999 
budget request is proposed under pending legislation.

               Object Classification (in millions of dollars)

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

                              Personnel Summary

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

                                

                     Vocational and Adult Education

              (Legislative proposal, not subject to PAYGO)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Vocational education:

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

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

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

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

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

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

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

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

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

               Object Classification (in millions of dollars)

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

[[Page 331]]



                              Personnel Summary

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

                                


 
                    OFFICE OF POSTSECONDARY EDUCATION

                              Federal Funds

General and special funds:

                      Student Financial Assistance

    For carrying out subparts 1[, 3, and 4] and 3 of part A, part C 
[and], part E, part F, part G, and part H of title IV of the Higher 
Education Act of 1965, as amended, [$8,978,934,000] $9,203,000,000, 
which shall remain available through September 30, [1999] 2000.
    The maximum Pell Grant for which a student shall be eligible during 
award year [1998-1999] 1999-2000 shall be [$3,000] $3,100: Provided, 
That notwithstanding section 401(g) of the Act, if the Secretary 
determines, prior to publication of the payment schedule for such award 
year, that the amount included within this appropriation for Pell Grant 
awards in such award year, and any funds available from the fiscal year 
[1997] 1998 appropriation for Pell Grant awards, are insufficient to 
satisfy fully all such awards for which students are eligible, as 
calculated under section 401(b) of the Act, the amount paid for each 
such award shall be reduced by either a fixed or variable percentage, or 
by a fixed dollar amount, as determined in accordance with a schedule of 
reductions established by the Secretary for this purpose: [Provided 
further, That if the Secretary determines that the funds available to 
fund Pell Grants for award year 1998-1999 exceed the amount needed to 
fund Pell Grants at a maximum award of $3,000 for that award year, the 
Secretary may increase the income protection allowances in sections 
475(g)(2)(D), and 476(b)(1)(A)(iv) (I), (II), and (III) up to the 
amounts at which Pell Grant awards calculated using the increased income 
protection allowances equal the funds available to make Pell Grants in 
award year 1998-1999 with a $3,000 maximum award, except that the income 
protection allowance in section 475(g)(2)(D) may not exceed $2,200, the 
income protection allowance in sections 476(b)(1)(A)(iv)(I) and (II) may 
not exceed $4,250, and the income protection allowance in section 
476(b)(1)(A)(iv)(III) may not exceed $7,250] Provided further, That 
notwithstanding part F of the Higher Education Act, the income 
protection allowance in section 475(g)(2)(D) shall be $2,200, the income 
protection allowance in sections 476(b)(1)(A)(iv) (I) and (II) shall be 
$4,250, and the income protection allowance in section 
476(b)(1)(A)(iv)(III) shall be $7,250: Provided further, That Pell Grant 
funds shall not be awarded to a student who has received Pell Grants for 
a period in excess of 150 percent of the full-time equivalent of the 
period normally required for the completion of that student's course of 
study, except that a student may not receive Pell Grant funds for more 
than the full-time equivalent of eight academic years in the aggregate. 
Pell Grant funds may only be awarded to a student who has received Pell 
Grant funds for more than the full-time equivalent of eight academic 
years in the aggregate only if the institution determines that providing 
such funds is necessary to accommodate the rights of the student under 
section 504 of the Rehabilitation Act of 1973: Provided further, That 
none of the funds made available in this Act may be used to award 
student financial assistance under title IV of the Higher Education Act 
to students attending an institution of higher education that is 
ineligible to participate in a loan program authorized under parts B and 
D of such title as a result of a final default rate determination made 
by the Secretary, and issued by the Secretary on or after October 1, 
1998, except that this restriction shall not apply to an institution 
until it has had the opportunity to appeal its default rate 
determination under the appeal procedures provided at 34 CFR 668.17. 
This restriction shall not apply to an institution that was not 
participating in the loan programs authorized under part B or part D of 
title IV of the Higher Education Act on October 1, 1998, unless the 
institution subsequently participates in either such loan program. 
(Department of Education Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Federal Pell grants:

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

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

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

    New budget authority (gross), detail:
      Current:

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

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

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

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

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

               Status of Direct Loans (in millions of dollars)

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

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

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

[[Page 332]]

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

    Federal Pell Grants.--Undergraduate students establish eligibility 
for these grants under award and need determination rules set out in the 
authorizing statute and the annual appropriations act. The 1999 budget 
estimate reflects proposed changes to the Pell Grant program.

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

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

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

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

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

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

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

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

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

      AID FUNDS AVAILABLE FOR POSTSECONDARY EDUCATION AND TRAINING

                        [In millions of dollars]

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

                          NUMBER OF AID AWARDS

                             [In thousands]

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

[[Page 333]]

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

                           AVERAGE AID AWARDS

                           [In whole dollars]

                                     1997 actual  1998 est.   1999 est.
Pell grants.........................       1,699       1,894       1,936
Student loans:
  Guaranteed student loans:
    Stafford loans..................       3,397       3,389       3,425
    Unsubsidized Stafford loans.....       3,755       3,772       3,869
    PLUS............................       6,182       6,233       6,458
  Direct student loans:
    Stafford loans..................       3,291       3,403       3,438
    Unsubsidized Stafford loans.....       3,310       3,586       3,679
    PLUS............................       5,865       6,390       6,624
  Consolidation:
    FFEL............................      19,678      20,137      20,606
    Direct Loans....................      16,514      21,453      19,446
Work-study..........................       1,065       1,065       1,065
Supplemental educational opportunity 
grants..............................         745         745         745
Perkins loans.......................       1,342       1,342       1,342
State student incentive grants......         600         600

                        NUMBER OF STUDENTS AIDED

                             [In thousands]

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

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

                 ADMINISTRATIVE PAYMENTS TO INSTITUTIONS

                        [In millions of dollars]

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

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

                         DEFAULTED PERKINS LOANS

                        [In millions of dollars]

                                     1997 actual  1998 est.   1999 est.
Outstanding defaulted loans, 
    beginning of year:
  Assigned defaulted loans \1\......         207         141         158
  Unassigned defaulted loans \2\....         819         881         949
New defaulted loans.................         139         233         237
Collections on assigned loans.......         -25         -31         -30
Collections on unassigned loans.....         -90         -94         -98
Write-offs for assigned loans.......          -5          -8          -8
Write-offs for unassigned loans.....         -20         -15         -12
                                    ------------------------------------
Outstanding defaulted loans, end of 
year................................       1,025       1,107       1,196
                                    ====================================
    \1\ Permanently assigned to the Federal Government for collection. 
Does not include the following amounts in loans made to institutions to 
establish Perkins revolving funds: $94 thousand in 1997, $94 thousand in 
1998, and $94 thousand in 1999. These amounts are recorded as 
outstanding loans in the ``Status of Direct Loans'' schedule.
    \2\ Unassigned loans at institutions.

                                

                            Higher Education

    For carrying out, to the extent not otherwise provided, [parts A and 
B of title III, without regard to section 360(a)(1)(B)(ii), titles IV, 
V, VI, VII, and IX, and part A, subpart 1 of part B, and part E of title 
X and title XI of the Higher Education Act of 1965, as amended, part G 
of title XV of Public Law 102-325,] the Mutual Educational and Cultural 
Exchange Act of 1961, [and Public Law 102-423; $946,738,000, of which 
$13,700,000 for interest subsidies under title VII of the Higher 
Education Act shall remain available until expended: Provided, That 
funds available for part D of title IX of the Higher Education Act shall 
be available to fund new and noncompeting continuation awards for 
academic year 1998-1999 for fellowships awarded under part C of title IX 
of said Act, under the terms and conditions of part C: Provided further, 
That from the funds made available under Part A of title X of the Higher 
Education Act, $1,000,000 shall be awarded to the Advanced Technical 
Center at Mexico, Missouri for the delivery of technical education in 
cooperation with community colleges and State technical schools and 
$3,000,000 shall be for the delivery of technical education and distance 
learning at Empire State College in New York] $6,536,000. (Department of 
Education Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Aid for institutional development:

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

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

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

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

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

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

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

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

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

[[Page 334]]

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

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

               Object Classification (in millions of dollars)

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

                                

                            Higher Education

              (Legislative proposal, not subject to PAYGO)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Aid for institutional development:

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

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

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

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

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

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

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

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

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

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

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

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

[[Page 335]]

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

               Object Classification (in millions of dollars)

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

                                

                            Howard University

    For partial support of Howard University (20 U.S.C. 121 et seq.), 
$210,000,000[: Provided, That from the amount available, the University 
may at its discretion use funds for the endowment program as authorized 
under] of which not less than $3,530,000, shall be for a matching 
endowment grant pursuant to the Howard University Endowment Act (Public 
Law 98-480), of which $3,530,000 shall remain available until expended. 
(Department of Education Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

    Howard University is a private, nonprofit educational institution 
consisting of 12 schools and colleges. Federal funds are used to provide 
partial support for university programs as well as for the teaching 
hospital facilities. In 1996, direct Federal appropriations for the 
academic and research programs represented 65 percent of the 
university's educational and general expenditures.

                                

                       Perkins Loan Revolving Fund

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

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

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

                                

Credit accounts:

          Federal Direct Student Loan Program, Program Account

               Program and Financing (in millions of dollars)

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

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

[[Page 336]]


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

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

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

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

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

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

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

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

    This summary section outlines the structure of these two programs, 
highlights their differences and similarities, and provides text tables 
displaying program cost data; loan volume, subsidy, default, and 
interest rates; and other descriptive information. As part of his 1999 
Budget, the President is proposing a number of changes for the Direct 
Loan and FFEL programs. These changes are discussed as part of this 
program description.

    From its inception in 1965 through 1997, the FFEL program has 
provided over $240 billion in loans to postsecondary students and their 
parents. Since beginning on July 1, 1994, the Direct Loan program has 
provided almost $24 billion in new loans to students and parents. Taken 
together, the FFEL and Direct Loan programs will make almost $32 billion 
in new loans available in 1998. Because funding for these two programs 
is provided on a permanent indefinite basis, for budget purposes they 
are considered separately from other Federal student financial 
assistance programs. The FFEL and Direct Loan programs should be viewed 
in combination with these other programs, however, and with Perkins 
Loans in particular, as part of the overall Federal effort to ensure 
access to higher education.

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

    The Direct Loan program was created by the Student Loan Reform Act 
(SLRA) of 1993. Under this program, the Federal Government provides loan 
funds to postsecondary institutions directly or through an alternative 
originator. Direct Loans offer a streamlined system that is simpler for 
student and parent borrowers, less prone to waste and abuse, and less 
expensive for the Federal taxpayer than the FFEL program. The program 
also offers flexible repayment options that allow

[[Page 337]]

borrowers to consider lower-paying careers, such as public service, 
without fear of default.

    The Direct Loan program began operation in academic year 1994-1995 
with 7 percent of overall loan volume. The program grew to 31 percent of 
overall volume in academic year 1995-1996, and is expected to account 
for 35 percent in academic year 1997-1998. All eligible institutions are 
free to participate in either the Direct Loan or FFEL program.

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

    For new Stafford Loans, the interest rate equals the 91-day Treasury 
bill rate plus 2.5 percent during in-school, grace, and deferment 
periods, and the 91-day Treasury bill plus 3.1 percent at all other 
times, with a cap of 8.25 percent. These rates are adjusted annually. 
Interest payments for these loans are fully subsidized by the Government 
while a student is in school and during grace and deferment periods. 
Unsubsidized Stafford loans carry the same interest rate as Stafford 
loans, but have no interest subsidy. In the FFEL program, interest on 
Unsubsidized Stafford loans may be capitalized no more than quarterly, 
and upon entering repayment. In the Direct Loan program, interest on 
these loans is capitalized only upon entering repayment. The President 
is proposing to require FFEL lenders and loan holders to capitalize 
interest only upon entering repayment. For PLUS loans, the interest rate 
equals the 52-week Treasury bill rate plus 3.1 percent, with a cap of 9 
percent and no interest subsidy.

    Beginning July 1, 1998, current law requires that the interest rate 
for new Stafford and Unsubsidized Stafford loans equal the Department's 
borrowing rate--currently the 10-20-year bond rate--plus 1 percentage 
point, with a cap of 8.25 percent. This rate, adjusted annually, will 
apply throughout the life of the loan.

    Consolidation loans allow borrowers to combine loans made under 
Title IV of the Higher Education Act--FFEL, Direct Loans, and Perkins 
Loans--as well as some loans made under the Public Health Service Act. 
Borrowers holding one or more underlying Direct Loans may only 
consolidate in the Direct Loan program. The portion of Direct 
Consolidation loans made up of underlying Stafford and Unsubsidized 
Stafford loans carry the variable Stafford interest rate; the portion 
made up of underlying PLUS loans carry the variable PLUS interest rate. 
For FFEL Consolidation loans, the interest rate for loans made on or 
after July 1, 1994 equals the weighted average of the interest rate on 
the loans consolidated, rounded up to the nearest whole percent. Lenders 
may choose to offer a lower rate.

    The Emergency Student Loan Consolidation Act of 1997, which was 
included in the Department's 1998 appropriations act, temporarily 
changed a number of laws affecting Consolidation loans. Under this act, 
which is in effect until October 1, 1998, Direct Loan borrowers may 
consolidate their loans into the FFEL program, interest rates for FFEL 
Consolidation loans are calculated in the same way as is done for Direct 
Consolidation loans, and borrowers whose FFEL Consolidation loans 
include underlying Stafford loans maintain interest subsidy benefits 
associated with the Stafford portions of their loans. (Direct 
Consolidation loan borrowers already retain these benefits.)

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

    Guaranty agencies have the option of waiving this premium. In 
addition, FFEL lenders have the option of paying some or all of a 
borrower's original fee for Stafford Loan borrowers. The President is 
proposing to eliminate the 1 percent guaranty agency insurance premium 
and reduce the Direct Loan origination fee from 4 percent to 3 percent 
in 1999. The President is also proposing to further reduce fees for 
need-based (Stafford) loans in both FFEL and Direct Loans to 2 percent 
in 2001 and 1 percent in 2002, and to eliminate origination fees for all 
Stafford loans beginning in 2003. The President is also proposing that 
FFEL lenders be required to offer any benefits involving the partial or 
complete payment of borrower origination fees to all eligible borrowers.

    Loan limits are also identical across the two programs. In addition, 
loans made under both programs are discharged in cases where borrowers 
die, are totally and permanently disabled, or declare bankruptcy. Given 
the broad availability of income-contingent repayment, economic hardship 
deferments, and other flexible repayment options, the President is 
proposing to eliminate bankruptcy-related loan discharges.

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

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

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

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

    The President is proposing to reset the interest rate for special 
allowance payments on new loans on an annual basis, as is done with 
borrower interest rates. The President is also proposing to reduce 
special allowance payments on loans funded through tax-exempt 
securities.

    The President is proposing a number of changes to address serious 
structural problems with the FFEL default prevention system. 
Supplemental pre-claims assistance payments to guaranty agencies, which 
have proven ineffective in achieving their intended goal of enhancing 
agency default prevention activities, would be eliminated. As a more 
effective means of accomplishing this goal, the President is proposing 
that lenders make payments to guaranty agencies only on delin

[[Page 338]]

quent loans that have been brought current as a result of guaranty 
agency efforts.

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

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

    The President is also proposing to replace current statutorily set 
administrative cost allowances to guaranty agencies with fees paid on 
new and outstanding loans administered by each agency. In addition, the 
President is proposing to periodically recertify guaranty agency 
agreements, which will be revised to include specific, publicly released 
performance indicators. Among other things, these revised agreements 
will require that agencies be audited annually using a methodology that 
samples loans held in agency systems, and that guaranty agencies submit 
timely, accurate, and consistent data to the Department, including data 
for the National Student Loan Data System. The Secretary of Education 
will have the authority to terminate agreements based on agency 
performance, and to award contracts for services currently performed by 
guaranty agencies.

    In order to ensure the uninterrupted availability of aid funds for 
students and parents, Congress provided permanent funding to support 
student aid administration and expenses. These funds support Department 
personnel and contractors for Direct Loan origination and servicing, 
payments to guaranty agencies, as well as certain costs associated with 
activities common to Direct Loans, FFEL and other student assistance 
programs, such as application printing and processing. Discretionary 
funds requested for the FFEL program support additional Department 
personnel and administrative activities associated with operating the 
program.

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

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

                  Funding Levels (In thousands of dollars)

----------------------------------------------------------------------------
                                         1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
Budget Authority:
FFEL:
  Liquidating \1\.......................     745,336
  Program \2\...........................   3,144,260   1,988,127   1,938,815
  Reestimate of Prior Year Cost \2\.....      98,058
                                           ---------   ---------  ----------
    Subtotal, FFEL \2\..................   3,987,655   1,988,127   1,938,815
Direct Loans:
  Program \2\...........................     370,713     288,072     540,185
  Reestimate of Prior Year Cost \2\.....      82,157     123,190
                                           ---------   ---------  ----------
    Subtotal, Direct Loans \2\..........     288,556     411,262     540,185
Consolidation Loans:
  FFEL..................................      46,760    -142,525    -174,498
  Direct Loans..........................     -16,509     -23,185     -14,701
                                           ---------   ---------  ----------
    Subtotal, Consolidation Loans.......      30,251    -165,710    -189,200
Administration:
  FFEL \3\..............................      46,482      46,482      48,482
  Student Aid \4\.......................     491,000     532,000     610,000
                                           ---------   ---------  ----------
    Subtotal, Administration............     537,482     578,482     658,482
    Total, FFEL and Direct Loans........   4,843,944   2,812,161   2,948,283
Outlays:
FFEL:
  Liquidating \1\.......................     371,807    -189,735    -551,098
  Program \2\...........................   2,756,188   2,255,290   1,820,226
  Reestimate of Prior Year Costs \2\....      98,058
                                           ---------   ---------  ----------
    Subtotal, FFEL \2\..................   3,226,053   2,065,555   1,269,128
Direct Loans:
  Program \2\...........................     291,275     349,988     450,745
  Reestimate of Prior Year Costs \2\....     -82,157     123,190
                                           ---------   ---------  ----------
    Subtotal, Direct Loans \2\..........     209,118     473,178     450,745
Consolidation Loans:
  FFEL..................................      46,714    -142,318    -174,245
  Direct Loans..........................     -15,394     -20,899     -13,252
                                           ---------   ---------  ----------
    Subtotal, Consolidation Loans.......      31,321    -163,216    -187,497
Administration:
  FFEL \3\..............................      41,067      44,606      46,205
  Student Aid \4\.......................     465,796     488,749     554,596
                                           ---------   ---------  ----------
    Subtotal, Administration............     506,863     533,355     600,801
    Total, FFEL and Direct Loans........   3,973,355   2,908,872   2,133,177
---------------------------------------------------------------------------
    \1\ Liquidating account reflects loans made prior to 1992.
    \2\ Because these figures do not include totals for consolidation loans, 
they do not correspond with totals shown in account-specific schedules.
    \3\ Reflects annual discretionary appropriation.
    \4\ Supports administrative expense allowance payments to FFEL guaranty 
agencies, as well as a range of administrative activities, such as 
application printing, mailing, and processing, that are common to all 
Federal student financial assistance programs.

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

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

                       Number of Loans (In thousands)

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

[[Page 339]]

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

                    Average Loan Size (in whole dollars)

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

                     Composition of Consolidation Loans

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

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

----------------------------------------------------------------------------
                                         1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
Subsidy Rates (in percent) \1\
FFEL:
  Stafford..............................       22.03       17.31       15.66
  Unsubsidized Stafford.................        6.04        0.88
  PLUS..................................        4.36       -1.90       -2.78
                                           ---------   ---------  ----------
    Weighted Average, FFEL \2\..........       14.75        9.42        7.94
Direct Loans:
  Stafford..............................       11.97       12.62       14.07
  Unsubsidized Stafford.................       -8.64      -10.75       -7.54
  PLUS..................................       -7.69       -9.91       -9.35
                                           ---------   ---------  ----------
    Weighted Average, Direct Loans \2\..        3.21        2.31        4.04
Consolidation Loans:
  FFEL..................................        1.23       -3.52       -4.09
  Direct Loans..........................       -1.31       -0.86       -0.74
                                           ---------   ---------  ----------
    Weighted Average, Consolidation 
      Loans.............................        0.54       -2.45       -3.03
Default Rates (in percent) \3\
FFEL:
  Stafford..............................       22.70       21.87       20.99
  Unsubsidized Stafford.................       21.39       20.22       19.14
  PLUS..................................       11.08       11.58       12.06
                                           ---------   ---------  ----------
    Weighted Average, FFEL \2\..........       21.21       20.32       19.45
Direct Loans:
  Stafford..............................       22.16       21.58       20.65
  Unsubsidized Stafford.................       21.73       20.79       19.66
  PLUS..................................       10.40       10.78       11.15
                                           ---------   ---------  ----------
    Weighted Average, Direct Loans \2\..       20.95       20.31       19.45
Consolidation Loans:
  FFEL..................................       10.50       10.50       10.50
  Direct Loans..........................       13.08       11.95       12.08
                                           ---------   ---------  ----------
    Weighted Average, Consolidation 
      Loans.............................       11.17       11.06       10.98
Borrower Interest Rates (in percent)
FFEL:
  Stafford \4\..........................        8.25        7.11        7.03
  Unsubsidized Stafford \4\.............        8.25        7.11        7.03
  PLUS \4\..............................        8.68        8.21        8.13
Direct Loans
  Stafford \4\..........................        8.25        7.11        7.03
  Unsubsidized Stafford \4\.............        8.25        7.11        7.03
  PLUS \4\..............................        8.68        8.21        8.13
Consolidation Loans:
  FFEL\5\...............................
  Direct Loans \5\......................
Federal Borrowing Rate for Direct Loans 
    (in percent)                                6.77        6.11        6.03
---------------------------------------------------------------------------
    \1\ Subsidy rates represent the Federal portion of non-administrative 
costs--principally interest subsidies and defaults--associated with each 
borrowed dollar. For example, a $1,000 loan with Federal subsidy costs of 
$100 would have a subsidy rate of 10 percent.
    \2\ Because these figures do not include totals for Consolidation Loans, 
they do not correspond with totals shown in account-specific schedules.
    \3\ Default rates displayed in this table, which reflect projected 
defaults over the life of a loan cohort, are used in developing program cost 
estimates. The Department uses other rates based on defaults occurring in 
the first two years of repayment to determine institutional eligibility to 
participate in Federal loan programs. These two-year rates tend to be lower 
than those included in this table.
    \4\ Rates shown are those in effect beginning July 1st of each year.
    \5\ Under current law, interest rates under the FFEL Consolidation Loan 
program reflect a weighted average of the rates of the loans consolidated, 
rounded upward to the nearest whole percentage (In 1998 only, rates are not 
rounded upward, pursuant to a one-year statutory change.). For the Direct 
Loan Consolidation program, loans consolidated from the Stafford and 
Unsubsidized Stafford Loan programs are charged the Stafford Loan interest 
rate. Loans consolidated from the PLUS Loan program are charged the PLUS 
interest rate.

        Composition of Default Collections (In thousands of dollars)

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

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

----------------------------------------------------------------------------
                                         1997 cohort 1998 cohort 1999 cohort
----------------------------------------------------------------------------
FFEL:\1\
  Standard:
    Percent of Loan Volume: \2\
      Stafford..........................      100.00      100.00       64.88
      Unsubsidized Stafford.............      100.00      100.00       64.88
      PLUS..............................      100.00      100.00       80.68
      Consolidation.....................      100.00      100.00       69.59
  Subsidy Rate (in percent):
      Stafford..........................       22.03       17.31       15.90
      Unsubsidized Stafford.............        6.04        0.88        0.38
      PLUS..............................        4.36       -1.90       -2.58
      Consolidation.....................        1.23       -3.52       -4.01
  Graduated: \3\
    Percent of Loan Volume: \2\
      Stafford..........................                               28.73
      Unsubsidized Stafford.............                               28.73
      PLUS..............................                               14.00
      Consolidation.....................                               17.38
    Subsidy Rate (in percent):
      Stafford..........................                               15.20
      Unsubsidized Stafford.............                               -0.81
      PLUS..............................                               -3.77
      Consolidation.....................                               -4.27

[[Page 340]]

  Extended: \3\
    Percent of Loan Volume: \2\
      Stafford..........................                                6.39
      Unsubsidized Stafford.............                                6.39
      PLUS..............................                                5.32
      Consolidation.....................                               13.03
    Subsidy Rate (in percent):
      Stafford..........................                               15.24
      Unsubsidized Stafford.............                               -0.27
      PLUS..............................                               -3.23
      Consolidation.....................                               -4.09
  Direct Loans: \1\
  Standard:
    Percent of Loan Volume: \2\
      Stafford..........................       87.40       82.85       78.55
      Unsubsidized Stafford.............       84.01       78.21       72.82
      PLUS..............................       77.04       73.56       70.24
      Consolidation.....................       20.80       22.17       21.79
    Subsidy Rate (in percent):
      Stafford..........................       13.59       13.62       15.14
      Unsubsidized Stafford.............       -8.56       -9.67       -6.46
      PLUS..............................       -6.69       -7.62       -6.83
      Consilidation.....................        1.43        1.29        1.66
  Graduated: \3\
    Percent of Loan Volume: \2\
      Stafford..........................        9.22       12.89       16.37
      Unsubsidized Stafford.............       11.36       15.86       20.06
      PLUS..............................       16.83       19.38       21.81
      Consolidation.....................       18.32       20.00       19.54
    Subsidy Rate (in percent):
      Stafford..........................        9.67        7.90       10.58
      Unsubsidized Stafford.............      -12.43      -16.00      -11.12
      PLUS..............................      -12.25      -16.26      -15.27
      Consolidation.....................       -2.18       -3.11       -3.04
  Extended: \3\
    Percent of Loan Volume: \2\
      Stafford..........................        2.19        3.07        3.89
      Unsubsidized Stafford.............        3.26        4.55        5.75
      PLUS..............................        6.13        7.06        7.95
      Consolidation.....................       15.19       16.88       16.41
    Subsidy Rate (in percent):
      Stafford..........................       10.57        8.02       10.66
      Unsubsidized Stafford.............      -11.32      -15.91      -11.10
      PLUS..............................      -10.80      -16.27      -15.31
      Consolidation.....................       -1.15       -3.08       -3.10
  Income-Contingent:
    Percent of Loan Volume: \2\
      Stafford..........................        1.19        1.19        1.19
      Unsubsidized Stafford.............        1.38        1.38        1.38
      Consolidation.....................       45.69       40.94       42.26
    Subsidy Rate (in percent):
      Stafford..........................        9.38        5.49        2.54
      Unsubsidized Stafford.............        8.55        5.19        2.54
      Consolidation.....................       -2.06       -2.69       -5.51
---------------------------------------------------------------------------
    \1\ No data is included for the Alternative repayment plan under either 
FFEL or Direct Loans. Borrowers are not expected to participate in this plan 
due to the flexibility available under the other options. For FFEL, no data 
is included for income-sensitive repayment. This option, which has been 
available for a number of years, has never made up more than a tiny portion 
of overall loan volume. For Direct Loans, income-contingent repayment is not 
available for PLUS borrowers.
    \2\ Percent of Loan Volume represents aggregate data. Individual 
borrowers may move between plans over time.
    \3\ Maximum terms under the Extended and Graduated repayment plans 
reflect the following ``classes'' based on borrower debt levels.
                    Debt Level      Maximum Term 
                                     (in years)  Percent of 
                                                   Volume 
                                                   Within 
                                                  Extended 
                                                  Plan 1998

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

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

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

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

    The risk group data below also reflect proposed policy changes and 
interest rate projections in the President's 1999 Budget. These factors 
substantially decrease subsidy rates across years in the FFEL program. 
Subsidy rates in the Direct Loan program increase over the same period, 
primarily due to proposals to reduce borrower origination fees.

                  FFEL RISK CATEGORIES: STAFFORD LOANS

           Subsidy Rate (as a percentage of loan commitments)

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

                    Gross Default Rates (in percent)

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

                       UNSUBSIDIZED STAFFORD LOANS

           Subsidy Rate (as a percentage of loan commitments)

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

                    Gross Default Rates (in percent)

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

                               PLUS LOANS

           Subsidy Rate (as a percentage of loan commitments)

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

                    Gross Default Rates (in percent)

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


[[Page 341]]



               DIRECT LOAN RISK CATEGORIES: STAFFORD LOANS

           Subsidy Rate (as a percentage of loan commitments)

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

                    Gross Default Rates (in percent)

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

                       UNSUBSIDIZED STAFFORD LOANS

           Subsidy Rate (as a percentage of loan commitments)

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

                    Gross Default Rates (in percent)

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

                               PLUS LOANS

           Subsidy Rate (as a percentage of loan commitments)

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

                    Gross Default Rates (in percent)

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

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

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

               Object Classification (in millions of dollars)

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

      Personnel compensation:

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

                              Personnel Summary

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

[[Page 342]]



                                

          Federal Direct Student Loan Program, Program Account

                (Legislative proposal, subject to PAYGO)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

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

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

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

                                

         Federal Direct Student Loan Program, Financing Account

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Direct loans:

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

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

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

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

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

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

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

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

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

    Offsets:
      Against gross financing authority and 
          financing disbursements:

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

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

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

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

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

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

[[Page 343]]

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

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

               Status of Direct Loans (in millions of dollars)

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

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

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

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

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

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

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

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

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

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

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

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

                             Balance Sheet (in millions of dollars)

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

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

                                

         Federal Direct Student Loan Program, Financing Account

                (Legislative proposal, subject to PAYGO)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4253-4-3-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------

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

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

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

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

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

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

    Offsets:
      Against gross financing authority and 
          financing disbursements:

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

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

[[Page 344]]

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

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

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

                             Balance Sheet (in millions of dollars)

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

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

                                

              Federal Family Education Loan Program Account

    For Federal administrative expenses to carry out guaranteed student 
loans authorized by title IV, part B, of the Higher Education Act, as 
amended, [$46,482,000] $48,482,000. (Department of Education 
Appropriations Act, 1998.)
    Note.--The following tables display the program account which 
includes the subsidy costs and administrative expenses associated with 
guaranteed student loan commitments beginning in 1992.

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Guaranteed loan subsidy:

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

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

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

    New budget authority (gross), detail:
      Current:

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

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

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

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

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

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

[[Page 345]]

3590  Outlays...........................          45          45          44
---------------------------------------------------------------------------

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

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

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Full-time 
        permanent.......................          16          19          20
12.1  Civilian personnel benefits.......           3           4           4
21.0  Travel and transportation of 
        persons.........................           1
23.1  Rental payments to GSA............           2           2           2
23.3  Communications, utilities, and 
        miscellaneous charges...........           1           1           1
24.0  Printing and reproduction.........           2           1           2
25.2  Other services....................           1           1           1
25.3  Purchases of goods and services 
        from Government accounts........           1           1           1
25.7  Operation and maintenance of 
        equipment.......................          19          17          17
41.0  Grants, subsidies, and 
        contributions...................       4,232       2,004       1,987
                                           ---------   ---------  ----------
99.9    Total obligations...............       4,278       2,050       2,035
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
1001  Total compensable workyears: Full-
        time equivalent employment......         357         368         368
---------------------------------------------------------------------------

                                

              Federal Family Education Loan Program Account

                (Legislative proposal, subject to PAYGO)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0231-4-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Guaranteed loan subsidy:

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

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

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

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

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

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

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

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

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

                                

        Federal Family Education Loan Program, Financing Account

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

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4251-0-3-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Stafford loans:

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

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

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

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

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

[[Page 346]]

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

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

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

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

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

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

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

    Offsets:
      Against gross financing authority and 
          financing disbursements:

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

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

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

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

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

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

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

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

             Status of Guaranteed Loans (in millions of dollars)

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

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

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

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

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

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

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

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

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

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

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

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

[[Page 347]]


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                             Balance Sheet (in millions of dollars)

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

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

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

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

                                

        Federal Family Education Loan Program, Financing Account

                (Legislative proposal, subject to PAYGO)

               Program and Financing (in millions of dollars)

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

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

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

    Offsets:
      Against gross financing authority and 
          financing disbursements:

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

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

[[Page 348]]

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

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

                             Balance Sheet (in millions of dollars)

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

                                

            Federal Family Education Loan Liquidating Account

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

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-0-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Stafford loans:

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

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

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

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

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

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

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

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

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

             Status of Guaranteed Loans (in millions of dollars)

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

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

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

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

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

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

[[Page 349]]

      Adjustments:

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

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

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

2310    Outstanding, start of year......       2,970       2,766       2,534
2331    Disbursements for guaranteed 
          loan claims...................          47          77          51
2351    Repayments of loans receivable..        -166        -219        -219
2361    Write-offs of loans receivable..         -55         -51         -48
2364    Other adjustments, net..........         -30         -39         -39
                                           ---------   ---------  ----------
2390      Outstanding, end of year......       2,766       2,534       2,279
---------------------------------------------------------------------------
    \1\ Excludes interest and premium collections on insured loans.

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

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-0-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
25.2  Other services....................          89          71          87
33.0  Investments and loans.............         678         806         565
41.0  Grants, subsidies, and 
        contributions...................         739         399         250
42.0  Insurance claims and indemnities..          83         122         105
                                           ---------   ---------  ----------
99.9    Total obligations...............       1,589       1,398       1,007
---------------------------------------------------------------------------

                                

            Federal Family Education Loan Liquidating Account

                (Legislative proposal, subject to PAYGO)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Stafford loans:

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

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

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

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

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

             Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-4-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
          STAFFORD LOANS
    Cumulative balance of guaranteed loans 
                outstanding:
2210  Outstanding, start of year........
2261  Adjustments: Terminations for 
        default that result in loans 
        receivable......................                                  -2
                                           ---------   ---------  ----------
2290    Outstanding, end of year........                                  -2
----------------------------------------------------------------------------

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

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

2310    Outstanding, start of year......
2331    Disbursements for guaranteed 
          loan claims...................                                   2
2351    Repayments of loans receivable..                                 -16
2361    Write-offs of loans receivable..
2364    Other adjustments, net..........                                  -3
                                           ---------   ---------  ----------
2390      Outstanding, end of year......                                 -17
----------------------------------------------------------------------------

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

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

               Object Classification (in millions of dollars)

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

                                

          College Housing and Academic Facilities Loans Program

    For Federal administrative expenses to carry out activities related 
to facility loans entered into under title VII, part C and section 702 
of the Higher Education Act, as amended, $698,000. (Department of 
Education Appropriations Act, 1998.)

  Historically Black College and University Capital Financing Program 
                                 Account

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

[[Page 350]]

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

               Program and Financing (in millions of dollars)

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

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

    Budgetary resources available for obligation:
22.00 New budget authority (gross)......           1           1           1
22.10 Resources available from 
        recoveries of prior year 
        obligations.....................           1
22.70 Balance of authority to borrow 
        withdrawn.......................          -1
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......           1           1           1
23.95 New obligations...................          -1          -1          -1
----------------------------------------------------------------------------

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

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

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

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

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

----------------------------------------------------------------------------
Identification code 91-0241-0-1-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
    Direct loan subsidy outlays:
1340  Subsidy outlays...................           1
----------------------------------------------------------------------------

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

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

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

    In prior years, funding for CHAFL administration was in this 
account, and funding for CHL and HEFL administration was split between 
the Department's Program Administration account and the liquidating 
accounts for these two programs. Beginning in 1998, the Department has 
consolidated funding for administrative activities for CHAFL, HEFL and 
CHL under a single account. The 1999 request includes funding for 
personnel and other discretionary costs for all three programs. Loan 
servicing and architectural and engineering services for the HEFL and 
CHL programs are funded from their respective liquidating accounts.

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

    The first loan was issued in 1996 for $3.5 million, and another loan 
for $4.7 million was made in 1997. Additional loans are expected in 1998 
and 1999. No subsidy appropriations are required. The 1999 budget 
requests funds for continuing Federal administrative activities only.

                              Personnel Summary

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

                                

     College Housing and Academic Facilities Loans Financing Account

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

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4252-0-3-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------

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

    Budgetary resources available for obligation:
22.00 New financing authority (gross)...           1           2           2
23.95 New obligations...................          -1          -1          -1
----------------------------------------------------------------------------

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

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

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

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

[[Page 351]]


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

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

    Offsets:
      Against gross financing authority and 
          financing disbursements:

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

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

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4252-0-3-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
                                           ---------   ---------  ----------
1150    Total direct loan obligations...
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........          14          18          23
1231  Disbursements: Direct loan 
        disbursements...................           4           5           1
                                           ---------   ---------  ----------
1290    Outstanding, end of year........          18          23          24
---------------------------------------------------------------------------

    The reestimate of the subsidy from prior year obligations may 
require the Department to exercise its permanent indefinite authority to 
borrow funds to cover outstanding Treasury interest expenses due on 
September 30, 1999.

                             Balance Sheet (in millions of dollars)

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

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

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

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

                                

    College Housing and Academic Facilities Loans Liquidating Account

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

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

               Status of Direct Loans (in millions of dollars)

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

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

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

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

[[Page 352]]

ernment resulting from direct loans made prior to 1992 to schools and 
colleges for the reconstruction, renovation, and construction of 
academic facilities, housing and other postsecondary education 
facilities. Loans were made under three separate loan programs: Higher 
Education and Facilities Loans, College Housing Loans, and College 
Housing and Academic Facilities Loans. Beginning in 1998, the Department 
has consolidated the three loan programs into the CHAFL Liquidating 
account for budget presentation purposes only. The three individual 
programs continue to be administered separately.

                                

 Historically Black College and University Capital Financing, Financing 
                                 Account

             Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4254-0-3-502      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
    Cumulative balance of guaranteed loans 
                outstanding:
2210  Outstanding, start of year........                                   1
2231  Disbursements of new guaranteed 
        loans...........................                       1           4
                                           ---------   ---------  ----------
2290    Outstanding, end of year........                       1           5
----------------------------------------------------------------------------

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

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

                                


 
             OFFICE OF EDUCATIONAL RESEARCH AND IMPROVEMENT

                              Federal Funds

General and special funds:

             Education Research, Statistics, and Improvement

    For carrying out activities authorized by the Educational Research, 
Development, Dissemination, and Improvement Act of 1994, including part 
E; the National Education Statistics Act of 1994; section 2102 of title 
II, and parts A, B, I, and K and section 10601 of title X, and part C of 
title XIII of the Elementary and Secondary Education Act of 1965, as 
amended, and title VI of Public Law 103-227, [$431,438,000] 
$689,367,000: Provided, That [of the amount provided for section 10101 
of part A of title X of the Elementary and Secondary Education Act of 
1965, $1,000,000 shall be awarded to the National Museum of Women in the 
Arts; $500,000 shall be for enhanced teacher training in reading in the 
District of Columbia; $5,000,000 shall be for innovative learning 
opportunities for at-risk children at children's museums in 
Philadelphia, Baltimore, Boston and museums in Chicago; $8,000,000 shall 
be for a demonstration of public school facilities repair and 
construction to the Iowa Department of Education; $350,000 shall be 
awarded to the White Plains City School District to expand an after 
school program; $100,000 shall be for the Montgomery County, 
Pennsylvania library network; $55,000 shall be awarded to the St. 
Stephen Life Center in Louisville, Kentucky;] notwithstanding sections 
912 and 931 of the Educational Research, Development, Dissemination, and 
Improvement Act, $50,000,000 shall be available for education research 
to be planned and carried out in collaboration with the National Science 
Foundation and other appropriate agencies; and $25,000,000 shall be 
available to demonstrate effective approaches to comprehensive school 
reform to be allocated and expended in accordance with the instructions 
relating to this [proviso] activity in the statement of managers on the 
conference report accompanying [this Act] Public Law 105-78: Provided 
further, That the funds made available for comprehensive school reform 
shall become available on July 1, [1998] 1999, and remain available 
through September 30, [1999] 2000, and in carrying out this initiative, 
the Secretary and the States shall support only approaches that show the 
most promise of enabling children to meet challenging State content 
standards and challenging State student performance standards based on 
reliable research and effective practices, and include an emphasis on 
basic academics and parental involvement[: Provided further, That (1) of 
the amount appropriated under this heading and notwithstanding any other 
provision of law, the Secretary of Education may award $1,000,000 to a 
State educational agency (as defined in section 14101 of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 8801)) to pay for 
appraisals, resource studies, and other expenses associated with the 
exchange of State school trust lands within the boundaries of a national 
monument for Federal lands outside the boundaries of the monument; and 
(2) the State educational agency is eligible to receive a grant under 
paragraph (1) only if the agency serves a State that--]
        [(A) has a national monument declared within the State under the 
    authority of the Act entitled ``An Act for the preservation of 
    American antiquities'', approved June 8, 1906 (16 U.S.C. 431 et 
    seq.) (commonly known as the Antiquities Act of 1906) that 
    incorporates more than 100,000 acres of State school trust lands 
    within the boundaries of the national monument; and]
        [(B) ranks in the lowest 25 percent of all States when comparing 
    the average per pupil expenditure (as defined in section 14101 of 
    the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)) 
    in the State to the average per pupil expenditure for each State in 
    the United States]. (Department of Education Appropriations Act, 
    1998.)

               Program and Financing (in millions of dollars)

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

    Obligations by program activity:
      Research, development and dissemination:

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

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

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

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

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

[[Page 353]]

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

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

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

    Research, development, and dissemination.--
        National research institutes.--Funds support the activities of 
    five research institutes organized to address topics of national 
    concern in education. The institutes carry out comprehensive 
    programs of research and development by funding research centers, 
    field-initiated research studies, and other research projects.
        Interagency research initiative.--Funding for an education 
    research initiative is proposed as part of the Research Fund for 
    America. This proposal highlights the Administration's priority to 
    provide needed and sustained investments in important Federal 
    research programs on a deficit neutral basis. A discussion of the 
    Research Fund for America, and two other funds for the environment 
    and transportation, can be found in Section II of the Budget volume.
        Regional educational laboratories.--Ten laboratories provide 
    applied research and development, dissemination, and technical 
    assistance services to address needs in specified regions throughout 
    the country.
        National dissemination activities.--Funds support information 
    clearinghouses, a national dissemination system, and a national 
    library of education, which serves as a central location within the 
    Federal government for information on education.

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

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

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

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

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

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

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

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

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

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

               Object Classification (in millions of dollars)

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

                              Personnel Summary

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

                                


 
                         DEPARTMENTAL MANAGEMENT

                              Federal Funds

General and special funds:

                         Program Administration

    For carrying out, to the extent not otherwise provided, the 
Department of Education Organization Act, including rental of conference 
rooms in the District of Columbia and hire of two passenger motor 
vehicles, [$341,064,000] $362,000,000. (Department of Education 
Appropriations Act, 1998.)

               Program and Financing (in millions of dollars)

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

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

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

[[Page 354]]

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

    New budget authority (gross), detail:
      Current:

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

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

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

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

    Offsets:
      Against gross budget authority and outlays:

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

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

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

                        (In millions of dollars)                        
                                                                        
                                                           1997    1998 
                                                                        
Office of Elementary and Secondary Education, Indian                    
 education..............................................       3       3
                                                                        

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

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

    Reimbursable program.--Reimbursements to this account include the 
costs of providing administrative services to other agencies.

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

               Object Classification (in millions of dollars)

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

      Direct obligations:

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

                              Personnel Summary

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

                                

                         Office for Civil Rights

    For expenses necessary for the Office for Civil Rights, as 
authorized by section 203 of the Department of Education Organization 
Act, [$61,500,000] $68,000,000. (Department of Education Appropriations 
Act, 1998.)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

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

[[Page 355]]

of race, color, national origin, sex, disability, or age in the delivery 
of services or the provision of benefits in programs or activities of 
schools and institutions receiving financial assistance from the 
Department of Education. The authorities under which the Office for 
Civil Rights operates are title VI of the Civil Rights Act of 1964 
(racial and ethnic discrimination), title IX of the Education Amendments 
of 1972 (sex discrimination), section 504 of the Rehabilitation Act of 
1973 (discrimination against individuals with a disability), the Age 
Discrimination Act of 1975, and the Americans with Disabilities Act of 
1990.

               Object Classification (in millions of dollars)

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

      Personnel compensation:

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

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0700-0-1-751      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
1001  Total compensable workyears: Full-
        time equivalent employment......         681         724         724
---------------------------------------------------------------------------

                                

                     Office of the Inspector General

    For expenses necessary for the Office of the Inspector General, as 
authorized by section 212 of the Department of Education Organization 
Act, [$30,242,000] $31,242,000. (Department of Education Appropriations 
Act, 1998.)

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

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

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

               Object Classification (in millions of dollars)

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

      Personnel compensation:

11.1    Full-time permanent.............          16          17          18
11.5    Other personnel compensation....           1           1           1
                                           ---------   ---------  ----------
11.9      Total personnel compensation..          17          18          19
12.1  Civilian personnel benefits.......           4           4           4
21.0  Travel and transportation of 
        persons.........................           2           2           2
23.1  Rental payments to GSA............           2           2           2
25.1  Advisory and assistance services..                       1           1
25.3  Purchases of goods and services 
        from Government accounts........           1           1           1
25.7  Operation and maintenance of 
        equipment.......................           1           1           1
31.0  Equipment.........................           1
                                           ---------   ---------  ----------
99.0      Subtotal, direct obligations..          28          29          30
99.5  Below reporting threshold.........           2           1           1
                                           ---------   ---------  ----------
99.9    Total obligations...............          30          30          31
---------------------------------------------------------------------------

                              Personnel Summary

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

                                

                         Headquarters Renovation

               Program and Financing (in millions of dollars)

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

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

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

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

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

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

    This account provides the Department of Education's portion of funds 
to renovate its headquarters building, including costs for 
administrative services, information technology, telecommunications 
cabling, and systems furniture. The remain

[[Page 356]]

ing funds required for the renovation, which began in October 1994, will 
be provided by the General Services Administration.

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1500-0-1-503      1997 actual   1998 est.   1999 est.
----------------------------------------------------------------------------
25.2  Other services....................           1
25.7  Operation and maintenance of 
        equipment.......................           2
31.0  Equipment.........................           1           1
32.0  Land and structures...............           1
                                           ---------   ---------  ----------
99.9    Total obligations...............           5           1
---------------------------------------------------------------------------

                                

  


 
                      GENERAL FUND RECEIPT ACCOUNTS

                           (in millions of dollars)

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

                                


 
                           GENERAL PROVISIONS

    Sec. 301. No funds appropriated in this Act may be used for the 
transportation of students or teachers (or for the purchase of equipment 
for such transportation) in order to overcome racial imbalance in any 
school or school system, or for the transportation of students or 
teachers (or for the purchase of equipment for such transportation) in 
order to carry out a plan of racial desegregation of any school or 
school system.
    Sec. 302. None of the funds contained in this Act shall be used to 
require, directly or indirectly, the transportation of any student to a 
school other than the school which is nearest the student's home, except 
for a student requiring special education, to the school offering such 
special education, in order to comply with title VI of the Civil Rights 
Act of 1964. For the purpose of this section an indirect requirement of 
transportation of students includes the transportation of students to 
carry out a plan involving the reorganization of the grade structure of 
schools, the pairing of schools, or the clustering of schools, or any 
combination of grade restructuring, pairing or clustering. The 
prohibition described in this section does not include the establishment 
of magnet schools.
    Sec. 303. No funds appropriated under this Act may be used to 
prevent the implementation of programs of voluntary prayer and 
meditation in the public schools.

                           (transfer of funds)

    Sec. 304. Not to exceed 1 percent of any discretionary funds 
(pursuant to the Balanced Budget and Emergency Deficit Control Act, as 
amended) which are appropriated for the Department of Education in this 
Act may be transferred between appropriations, but no such appropriation 
shall be increased by more than 3 percent by any such transfer: 
Provided, That the Appropriations Committees of both Houses of Congress 
are notified at least fifteen days in advance of any transfer.
    [Sec. 305. (a) Notwithstanding any other provision of Federal law, 
no funds provided to the Department of Education or to an applicable 
program (as defined in section 400(c)(1) of the General Education 
Provisions Act (20 U.S.C. 1221(c)(1))), in this Act or in any other Act 
in fiscal year 1998, may be used to field test, pilot test, implement, 
administer or distribute in any way, any national tests.
     (b) Exception.--Subsection (a) shall not apply to the Third 
International Math and Science Study or the National Assessment of 
Educational Progress.]
    [Sec. 306. (a) Study.--The National Academy of Sciences, in 
consultation with the National Governors Association, the National 
Conference of State Legislatures, the White House, the National 
Assessment Governing Board, and the Congress, shall conduct a 
feasibility study to determine if an equivalency scale can be developed 
that would allow test scores from commercially available standardized 
tests and State assessments to be compared with each other and the 
National Assessment of Educational Progress.
     (b) Report of Findings to Congress.--(1) The National Academy of 
Sciences shall submit a written report to the White House, the Committee 
on Education and the Workforce of the House of Representatives, the 
Committee on Labor and Human Resources of the Senate, and the Committees 
on Appropriations of the House of Representatives and the Senate not 
later than September 1, 1998.
     (2) The National Academy of Sciences shall submit an interim report 
no later than June 15, 1998.]

                   National Assessment Governing Board

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

[[Page 357]]

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

                          [(transfer of funds)]

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

                              [impact aid]

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