Appendix - Department of Education

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

[[Page 345]]

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, and part I of title X of the Elementary and Secondary
Education Act of 1965, [$1,314,100,000] $1,947,000,000, of which
[$491,000,000] $459,000,000 for the Goals 2000[: Educate America] Act
and [$125,000,000] $55,000,000 for the School-to-Work Opportunities Act
shall become available on July 1, [1999] 2000 and remain available
through September 30, [2000] 2001, and of which [$87,000,000]
$177,000,000 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 $22,000,000 of the funds made available under
section 3136 shall be for a competition consistent with the subjects
outlined in the House and Senate reports and the statement of the
managers, and that such competition should be administered in a manner
consistent with the authorizing legislation and current departmental
practices and policies: Provided further, That $9,850,000 of the funds
made available for star schools shall be for a competition consistent
with the language outlined in the House and Senate reports and the
statement of the managers, and that such competition should be
administered in a manner consistent with current departmental practices
and policies: Provided further, That $8,000,000 shall be awarded to
continue and expand the Iowa Communications Network statewide fiber
optic demonstration project, and $800,000 shall be awarded to the School
of Agriculture and Land Resources Management at the University of
Alaska, Fairbanks to enhance distance delivery of natural resources
management courses; $350,000 shall be for multi-media classrooms for the
rural education technology center at the Western Montana College in
Dillon, Montana: Provided further, That of the funds made available for
section 3136, $2,500,000 shall be to establish the RUNet 2000 project at
Rutgers, The State University of New Jersey; $500,000 shall be for
state-of-the-art information technology systems at Mansfield University,
Mansfield, Pennsylvania; $1,000,000 shall be for professional
development for technology training at the Krell Institute, Ames, Iowa;
$850,000 shall be for Internet-based curriculum at the State of Alaska,
Department of Education; $2,000,000 shall be for ``Magnet E-School''
technology training and curriculum initiative at the Hawaii Department
of Education; $600,000 shall be for technology in the classroom pilot
program for the Green Bay Public School System, Green Bay, Wisconsin;
$250,000 shall be for the ``Passport to Chicago Community Network''
technology training project; $1,200,000 for LEARN North Carolina and the
University of North Carolina at Chapel Hill; and $1,500,000 for the Iowa
Department of Education for community college grants to low-income
schools for technology]: Provided further, That grantees receiving funds
under part I of title X shall be required to provide matching funds of
not less than 50 percent of the total cost over the project period from
sources other than funds under part I, in cash or in kind, and that
awards may be for periods of up to 5 years. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Goals 2000:

00.01 State and local education
systemic improvement.......... 469 477 461
00.02 Parental assistance............. 25 30 30
--------- --------- ----------
00.91 Total, goals 2000............. 494 507 491
01.01 School-to-work opportunities...... 175 313 55
Educational technology:

02.01 Technology literacy challenge
fund.......................... 425 425 450
02.02 Technology innovation challenge
grants........................ 106 115 110
02.03 Regional technology in education
consortia..................... 10 10 10
National activities:
02.04 Teacher training in technology 75 75
02.05 Community-based technology.... 10 65
02.06 Technology leadership
activities.................. 2 2
02.07 Middle school teacher training 30
02.08 Software development
initiative.................. 5
02.09 Star schools.................... 34 45 45
02.10 Ready to learn television....... 7 11 7
02.11 Telecommunications demonstration
project for mathematics....... 2 5 2
--------- --------- ----------
02.91 Total, educational technology. 584 698 801
03.01 21st Century community learning
centers......................... 600
--------- --------- ----------
10.00 Total new obligations........... 1,253 1,518 1,947
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Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 194 204
22.00 New budget authority (gross)...... 1,275 1,314 1,947
22.21 Unobligated balance transferred to
other accounts.................. -27
22.22 Unobligated balance transferred
from other accounts............. 16
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,458 1,518 1,947
23.95 Total new obligations............. -1,253 -1,518 -1,947
24.40 Unobligated balance available, end
of year......................... 204
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 1,275 1,314 1,947
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 902 1,409 1,660
73.10 Total new obligations............. 1,253 1,518 1,947
73.20 Total outlays (gross)............. -746 -1,267 -1,305
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1,409 1,660 2,303
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 114 66 97
86.93 Outlays from current balances..... 632 1,201 1,207
--------- --------- ----------
87.00 Total outlays (gross)........... 746 1,267 1,305
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,275 1,314 1,947
90.00 Outlays........................... 746 1,267 1,305
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Note.--Includes $600 million in budget authority in 2000 for 21st
Century community learning centers previously financed from:

(In millions of dollars)
1998 actual 1999 est.
Office of Educational Research and
Improvement, Education Research,
Statistics, and Improvement............ 40 200

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:

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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 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 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 all
States.

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.

Educational Technology:
Technology literacy challenge fund.--All States will receive the
fourth 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.
Technology innovation challenge grants.--Competitive grants are
made to consortia of schools districts and other partners to improve
teaching and learning through the development of effective and
innovative uses of technology.
Regional technology in education consortia.--Funds support
technical assistance in the development and implementation of
educational technology.
Teacher training in technology.--Funds 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 support computer learning
centers for students and adults in low-income neighborhoods.
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.
Middle school teacher training.--Funds will support grants to
middle schools to train teacher technology leaders in States that
agree to estalish technology literacy requirements.
Software development initiative.--Funds will support competitive
grants to encourage the development of high-quality educational
software by partnerships of students, university faculty, and
technology and content experts.
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.
21st Century community learning centers.--Funds support
competitive grants to centers providing school-based academic and
recreational services for youth and other members of the community
during after-school, weekend, and summer hours. Priority will be
given to projects that have policies for ending social promotion.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0500-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 5 6 7
25.2 Other services.................... 2 3 3
25.5 Research and development contracts 5 6 7
41.0 Grants, subsidies, and
contributions................... 1,241 1,503 1,930
--------- --------- ----------
99.9 Total new obligations........... 1,253 1,518 1,947
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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,
[$8,370,520,000] $8,743,920,000, of which [$2,198,134,000]
$2,561,134,000 shall become available on July 1, [1999] 2000, and shall
remain available through September 30, [2000] 2001, and of which
$6,148,386,000 shall become available on October 1, [1999] 2000 and
shall remain available through September 30, [2000] 2001, for academic
year [1999-2000] 2000-2001: Provided, That [$6,574,000,000]
$6,140,000,000 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, [1998] 1999, to obtain updated
local-educational-agency-level census poverty data from the Bureau of
the Census: Provided further, That [$1,102,020,000] $1,100,000,000 shall
be available for concentration grants under section 1124A, and
$756,020,000 shall be available for targeted grants under section 1125:
Provided further, That each State shall reserve 2.5 percent of its total
allocation under sections 1124, 1124A, and 1125 to support efforts to
improve schools identified under section 1116(c), pursuant to additional
guidance to be issued by the Secretary: Provided further, That
[$7,500,000] $8,900,000 shall be available for evaluations under
section 1501 and not more than $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 1998:] 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 activity in the statement of the managers on the conference report
accompanying Public Law 105-78 and in the statement of the managers on
the conference report accompanying [this Act] Public Law 105-277:
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 [no
funds appropriated under section 1002(g)(2) shall be available for
section 1503] sections 1116(c)(5)(B)(ii) and 1116(c)(5)(C) shall not
apply. (Department of Education Appropriations Act, 1999, as included in
Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Direct program:

Grants to local educational
agencies:
00.01 Basic grants.................. 5,935 2,982 6,894
00.02 Concentration grants.......... 1,279 1,102
00.03 Capital expenses.............. 41 24
00.04 Even start.................... 121 138 145
00.05 State agency programs........... 345 399 422
00.06 Evaluation...................... 7 8 9

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00.07 Demonstrations of comprehensive
school reform................. 63 177 150
00.08 Migrant education projects...... 10 13 22
--------- --------- ----------
10.00 Total new obligations........... 7,801 3,741 8,744
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Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 10 71
22.00 New budget authority (gross)...... 7,871 3,670 8,744
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 7,881 3,741 8,744
23.95 Total new obligations............. -7,801 -3,741 -8,744
23.98 Unobligated balance expiring...... -9
24.40 Unobligated balance available, end
of year......................... 71
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 6,573 2,222 2,596
Permanent:

65.00 Advance appropriation (definite) 1,298 1,448 6,148
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 7,871 3,670 8,744
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Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 7,306 7,304 4,358
73.10 Total new obligations............. 7,801 3,741 8,744
73.20 Total outlays (gross)............. -7,817 -6,687 -7,963
73.40 Adjustments in expired accounts... 14
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 7,304 4,358 5,139
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 354 111 130
86.93 Outlays from current balances..... 6,863 4,333 3,101
86.97 Outlays from new permanent
authority....................... 276 1,248 4,304
86.98 Outlays from permanent balances... 324 995 428
--------- --------- ----------
87.00 Total outlays (gross)........... 7,817 6,687 7,963
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 7,871 3,670 8,744
90.00 Outlays........................... 7,818 6,687 7,963
---------------------------------------------------------------------------

Summary of Program Level (in millions of dollars)

1998-1999
academic
year 1999-2000
academic year 2000-2001
academic year
Current Budget Authority............ 6,574 2,223 2,596
Advance appropriation............... 1,448 6,148 6,148
------------------------------------
Total program level............... 8,022 8,371 8,774
====================================
Increase in advance appropriation
over previous year.................. +150 +4,700 +0

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.

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 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.

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

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0900-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 9 9 9
25.2 Other services.................... 7 7 7
25.3 Purchases of goods and services
from Government accounts........ 2 2 2
41.0 Grants, subsidies, and
contributions................... 7,783 3,723 8,726
--------- --------- ----------
99.9 Total new obligations........... 7,801 3,741 8,744
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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, [$864,000,000] $736,000,000, of which
[$704,000,000] $684,000,000 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), [$70,000,000, to
remain available until expended, shall be for payments under section
8003(f),] $7,000,000 shall be for construction under section 8007, [and
$28,000,000 shall be for Federal property payments under section 8002]
and $5,000,000 to remain available until expended shall be for
facilities maintenance under section 8008: [Provided, That Section
8002(f) of the Elementary and Secondary Education Act of 1965 is
amended--
(1) by inserting ``(1)'' after the subsection heading; and
(2) by adding a new paragraph (2) at the end to read as follows:
``(2) For each fiscal year beginning with fiscal year 1999, the
Secretary shall treat the Webster School District, Day County, South
Dakota as meeting the eligibility requirements of subsection
(a)(1)(C) of this section.'':
Provided further, That Section 8002 of the Elementary and Secondary
Education Act of 1965 is amended by adding at the end thereof a new
subsection (k) to read as follows:
``(k) Special Rule.--For purposes of payments under this section for
each fiscal year beginning with fiscal year 1998--
``(1) the Secretary shall, for the Stanley County, South Dakota
local educational agency, calculate payments as if subsection (e)
had been in effect for fiscal year 1994; and
``(2) the Secretary shall treat the Delaware Valley,
Pennsylvania local educational agency as if it had filed a timely
application under section 2 of Public Law 81-874 for fiscal year
1994.'':
Provided further, That (a) from the funds appropriated for payments to
local educational agencies under section 8003(f) of the Elementary and
Secondary Education Act of 1965 (ESEA) for fiscal year 1999, the
Secretary of Education shall distribute supplemental payments for
certain local educational agencies, as follows:
(1) First, from the amount of $68,000,000, the Secretary shall
make supplemental payments to the following agencies under section
8003(b) of the ESEA:
(A) Local educational agencies that received assistance
under section 8003(f) for fiscal year 1998.
(B) Local educational agencies with Impact Aid applicant
numbers 20-0019, 51-0504, 51-2801, 51-1903, 51-0010, 51-
4203, 51-2101, 51-0811, and 51-0904.
(C) Any eligible local educational agency with at least
25,000 children in average daily attendance, at least 55
percent feder

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ally connected children described in section 8003(a)(1) in
average daily attendance, and at least 6,500 children
described in sections 8003(a)(1)(A) and (B) in average daily
attendance.
(2) From the remaining $2,000,000 and any amounts available
after making payments under paragraph (1), the Secretary shall then
make supplemental payments to local educational agencies that are
not described in paragraph (1) of this subsection, but that meet the
requirements of paragraphs (2) and (4) of section 8003(f) of the
ESEA for fiscal year 1999, except that such agencies may count for
purposes of eligibility for these supplemental payments, all
students described in section 8003(a)(1).
(3) After making payments under section 8003(f) to all eligible
applicants for fiscal years before fiscal year 1999, the Secretary
shall use the combined amount of any funds remaining available under
that subsection, and any amounts that may remain for fiscal year
1999 after making payments under paragraphs (1) and (2) of this
subsection, to make the following payments:
(A) First, an amount not to exceed $3,000,000 to Impact
Aid applicant number 20-0019.
(B) Second, from any remaining funds, an amount not to
exceed $3,000,000 to Impact Aid applicant number 53-0061.
(C) Third, from any remaining funds, increased basic
support payments under section 8003(b) for all eligible
applicants.
(b) In calculating the amounts of supplemental payments for agencies
described in subparagraphs (1)(A) and (B) and paragraph (2) of
subsection (a), the Secretary shall use the formula contained in section
8003(b)(1)(C) of the ESEA, except that--
(1) eligible local educational agencies may count all children
described in section 8003(a)(1) in computing the amount of those
payments;
(2) maximum payments for any of those agencies that use local
contribution rates identified in section 8003(b)(1)(C)(i) or (ii)
shall be computed by using four-fifths instead of one-half of those
rates;
(3) the learning opportunity threshold percentage of all such
agencies under section 8003(b)(2)(B) shall be deemed to be 100;
(4) for an eligible local educational agency with 35 percent or
more of its children in average daily attendance described in either
subparagraph (D) or (E) of section 8003(a)(1), the weighted student
unit figure from its regular basic support payment shall be
recomputed by using a factor of 0.55 for such children;
(5) for an eligible local educational agency with fewer than 100
children in average daily attendance, the weighted student unit
figure from its regular basic support payment shall be recomputed by
multiplying the total number of children described in section
8003(a)(1) by a factor of 1.5; and
(6) for an eligible local educational agency whose total number
of children in average daily attendance is at least 100, but fewer
than 750, the weighted student unit figure from its regular basic
support payment shall be recomputed by multiplying the total number
of children described in section 8003(a)(1) by a factor of 1.25.
(c) For a local educational agency described in subsection (a)(1)(C)
above, the Secretary shall use the formula contained in section
8003(b)(1)(C) of the ESEA, except that the weighted student unit total
from its regular basic support payment shall be increased by 35 percent
and its learning opportunity threshold percentage shall be deemed to be
100.
(d) For each eligible local educational agency, the calculated
supplemental basic support payment shall be reduced by subtracting the
agency's regular fiscal year 1999 section 8003(b) basic support payment.
(e) The actual supplemental basic support payment that local
educational agencies receive shall be treated under section 8009 in the
same manner as payments under section 8003(f).
(f) If the sums described in subsections (a)(1) and (2) above are
insufficient to pay in full the calculated supplemental basic support
payments for the local educational agencies identified in those
subsections, the Secretary shall ratably reduce the supplemental basic
support payment to each local educational agency: Provided further, 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 Prince Georges County, Maryland, 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 from the amount
appropriated for section 8008 the Secretary shall award $500,000 to the
Randolph Field Independent School District, Texas: Provided further,
That for the purposes of computing the amount of payment for a local
educational agency for children identified under section 8003, children
residing in housing initially acquired or constructed under section 801
of the Military Construction Authorization Act of 1984, (Public Law 98-
115) (``Build to Lease'' program) shall be considered as children
described under section 8003(a)(1)(B) if the property described is
within the fenced security perimeter of the military facility upon which
such housing is situated: Provided further, That if such property is not
owned by the Federal Government, is subject to taxation by a State or
political subdivision of a State, and thereby generates revenues for a
local educational agency which received a payment from the Secretary
under section 8003, the Secretary shall--
(A) require such local educational agency to provide
certification from an appropriate official of the Department of
Defense that such property is being used to provide military
housing; and
(B) reduce the amount of such payment by an amount equal to the
amount of revenue from such taxation received in the second
preceding fiscal year by such local educational agency, unless the
amount of such revenue was taken into account by the State for such
second preceding fiscal year and already resulted in a reduction in
the amount of State aid paid to such local educational agency:
Provided further, That of the funds available for payments under
section 8002, the Secretary shall pay the San Diego, California,
Centennial, Pennsylvania, and Hatboro-Horsham, Pennsylvania, local
educational agencies the sum of $500,000 each, in addition to their
regularly calculated payments, except that the total funds these
agencies receive under this section may not exceed 50 percent of
their maximum section 8002 payments] Provided, That payments and
eligibility under section 8003 shall be based only on federally
connected children described in sections 8003(a)(1)(A),
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)(A), 8003(a)(1)(B), and
8003(a)(1)(C) for fiscal year 1999 shall be eligible to receive a
payment under section 8003(b) for fiscal year 2000: Provided
further, That notwithstanding section 8003(d)(1), payments under
section 8003(d) for fiscal year 2000 for eligible local educational
agencies shall be based only on federally connected children
described in sections 8003(a)(1)(A)(ii), 8003(a)(1)(B), and
8003(a)(1)(C): 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)(A),
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 1997,
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)(A), 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 above: Provided further, That none of the
funds provided shall be used for payment under section 8003(e).
(Department of Education Appropriations Act, 1999, as included in
Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Payments for federally connected children:

00.01 Basic support payments.......... 662 704 684
00.02 Supplemental payments for
children with disabilities.... 50 50 40
00.03 Payments for heavily impacted
districts..................... 89 62 50
--------- --------- ----------
00.91 Subtotal, payments for federally
connected children............ 801 816 774
01.01 Facilities maintenance............ 1 14 5
02.01 Construction...................... 7 7 7
03.01 Payments for Federal property..... 24 28

[[Page 349]]

04.01 Construction (P.L. 81-815)........ 9 7
05.01 Penalty mail...................... 1
--------- --------- ----------
10.00 Total new obligations........... 843 872 786
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 95 73 65
22.00 New budget authority (gross)...... 808 864 736
22.10 Resources available from
recoveries of prior year
obligations..................... 14
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 917 937 801
23.95 Total new obligations............. -843 -872 -786
24.40 Unobligated balance available, end
of year......................... 73 65 15
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 808 864 736
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 334 407 294
73.10 Total new obligations............. 843 872 786
73.20 Total outlays (gross)............. -700 -985 -847
73.40 Adjustments in expired accounts... -57
73.45 Adjustments in unexpired accounts. -14
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 407 294 233
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 563 705 600
86.93 Outlays from current balances..... 137 280 248
--------- --------- ----------
87.00 Total outlays (gross)........... 700 985 847
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 808 864 736
90.00 Outlays........................... 700 985 847
---------------------------------------------------------------------------

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 (1) children of Federal employees who
both live and work on Federal property, (2) children of foreign military
officers living on Federal property, (3) children living on Indian
lands, and (4) military dependents living on Federal property.

Basic support payments.--Payments would be made on behalf of
approximately 292,000 federally connected children enrolled in
approximately 1,000 school districts across the country. The request
would provide an average payment of approximately $2,300 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.

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.

Construction.--Payments provide assistance for school construction
for certain school districts with large proportions of federally
connected children.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0102-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
23.3 Communications, utilities, and
miscellaneous charges........... 1
32.0 Land and structures............... 1 14 5
41.0 Grants, subsidies, and
contributions................... 841 858 781
--------- --------- ----------
99.9 Total new obligations........... 843 872 786
---------------------------------------------------------------------------

School Improvement Programs

For carrying out school improvement activities authorized by titles
II, IV, V-A and B, VI, IX, X, [XII] and XIII of the Elementary and
Secondary Education Act of 1965 (``ESEA''); the Stewart B. McKinney
Homeless Assistance Act; and the Civil Rights Act of 1964 and part B of
title VIII of the Higher Education Act; [$2,811,134,000] $2,722,534,000,
of which [$2,381,300,000] $2,205,700,000 shall become available on July
1, [1999] 2000, and remain available through September 30, [2000] 2001:
Provided, That of the amount appropriated, $335,000,000 shall be for
Eisenhower professional development State grants under title II-B and up
to $750,000 shall be for an evaluation of comprehensive regional
assistance centers under title XIII of [the Elementary and Secondary
Education Act of 1965, and $1,575,000,000 shall be for title VI, of
which $1,200,000,000 shall be available, notwithstanding any other
provision of law,] ESEA: Provided further, That with respect to funds
appropriated for title IV-A-1 of ESEA, State educational agencies shall,
in determining the local educational agencies that have the greatest
need for additional funds pursuant to section 4113(d)(2)(C)(ii), conduct
a competition and consider the quality of the programs proposed by
applicants: Provided further, That of the funds appropriated for title
IV-A-2 of ESEA, $12,000,000 shall become available on October 1, 1999,
to remain available until expended to help school districts and
communities respond to violent deaths and other traumatic crises:
Provided further, That notwithstanding any other provision of law,
$1,400,000,000 shall be available to carry out title VI of [the
Elementary and Secondary Education Act of 1965] ESEA in accordance with
section 307(b) through (g) of [this Act] the Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f), in order to reduce class size, particularly in the early grades,
using highly qualified teachers to improve educational achievement for
regular and special needs children, from which amount the Secretary of
Education--
(1) shall make available a total of $7,000,000 to the Secretary of
the Interior (on behalf of the Bureau of Indian Affairs) and the
outlying areas for activities under that section, and
(2) shall allocate the remainder by providing each State the greater
of the amount the State would receive if a total of $1,306,950,000 were
allocated in the same proportion as the amount it received under section
1122 or under section 2202(b) of ESEA for fiscal year 1999, except that
such allocations shall be ratably increased or decreased as may be
necessary: Provided further, That the Federal share of the cost of any
activities carried out with funds made available to a local educational
agency under the previous proviso that are in excess of its fiscal year
1999 allocation may be up to 100 percent in the case of a local
educational agency with a child-poverty rate of 50 percent or greater,
and shall not exceed 65 percent in the case of a local educational
agency with a child-poverty rate below 50 percent; and the non-Federal
share of such activities assisted shall be through cash expenditures
from non-Federal sources, except that if an agency has allocated funds
under section 1113(c) of ESEA to 1 or more schoolwide programs under
section 1114 of ESEA, the agency may use those funds for the non-Federal
share of activities under this program that benefit those schoolwide
programs, to the extent consistent with section 1120A(c) of ESEA and
notwithstanding section 1114(a)(3)(B) of ESEA. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Professional development and program
innovation:

00.01 Eisenhower professional
development State grants...... 332 338 335
00.02 Innovative education program
strategies State grants....... 350 375
00.03 Class size reduction............ 1,200 1,400
Safe and drug-free schools and communities:

00.04 State grants.................... 531 443 439
00.05 National programs............... 25 90 90
00.06 Coordinator Initiative.......... 35 50
00.07 Project SERV.................... 12
00.08 Inexpensive book distribution..... 12 18 18
00.09 Arts in education................. 11 11 11
00.10 Magnet schools assistance......... 101 104 114
00.11 Education for homeless children
and youth....................... 29 29 32
00.12 Women's educational equity........ 3 3 3
00.13 Training and advisory services.... 7 7 7
00.14 Ellender fellowships.............. 2 2

[[Page 350]]

00.15 Education for Native Hawaiians.... 18 20 20
00.16 Alaska Native education equity.... 8 10 10
00.17 Charter schools................... 80 100 130
00.18 Comprehensive regional assistance
centers......................... 27 28 32
00.19 Advanced placement incentives..... 4 20
--------- --------- ----------
10.00 Total obligations............... 1,536 2,817 2,723
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 3 5
22.00 New budget authority (gross)...... 1,538 2,811 2,723
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,541 2,816 2,723
23.95 Total new obligations............. -1,536 -2,817 -2,723
23.98 Unobligated balance expiring...... -1
24.40 Unobligated balance available, end
of year......................... 5
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 1,538 2,811 2,723
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 1,771 1,941 3,321
73.10 Total new obligations............. 1,536 2,817 2,723
73.20 Total outlays (gross)............. -1,366 -1,437 -2,175
73.40 Adjustments in expired accounts... 2
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1,941 3,321 3,869
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 62 141 136
86.93 Outlays from current balances..... 1,304 1,296 2,039
--------- --------- ----------
87.00 Total outlays (gross)........... 1,366 1,437 2,175
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,538 2,811 2,723
90.00 Outlays........................... 1,366 1,437 2,175
---------------------------------------------------------------------------

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.

Class size reduction.--Formula grants are provided to local school
districts to help them carry out effective approaches to reducing class
sizes with highly qualified teachers. School districts give particular
consideration to reducing class sizes in the early elementary grades.

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 drug
use and violence in the Nation's schools.
National programs.--Funds support activities to promote safe and
disciplined academic environments and to prevent illegal drug use
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 are awarded to local educational
agencies to recruit, hire, and train full-time drug and violence
prevention coordinators to plan, design, implement, and evaluate
drug and violence prevention programs in middle schools with
significant drug and violence problems.
Project SERV (School Emergency Response to Violence).--The
Administration proposes a new Federal response to violent deaths and
other crises affecting schools. Under this initiative, the
Department of Education, in collaboration with the Departments of
Justice and Health and Human Services and the Federal Emergency
Management Agency Administration, would provide immediate emergency
assistance to a community following a violent or traumatic incident
to help identify and meet urgent and unplanned local needs, such as
additional school security personnel, emergency mental health crisis
counseling, and longer-term counseling to students, faculty, and
families.

Other programs.--

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

Arts in education.--Funds support 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. The 2000 increase will support inter-
district programs.

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 equity
assistance centers that provide technical assistance to school districts
in addressing equity in education related to issues of race, gender, and
national origin.

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.--Grants are awarded to State educational agencies
and charter schools to support the planning, design, initial
implementation, and dissemination of information regarding 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.

Advanced placement incentives.--Funds are used by States to pay for
advanced placement test fees for low-income students who are enrolled in
advanced placement classes. In States in which no eligible low-income
individual is required to pay more than a nominal fee to take advanced
placement tests, funds may be used for other purposes to increase the
number of low-income students taking these tests, such as curriculum
development and training of teachers for advanced placement courses.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1000-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
24.0 Printing and reproduction......... 1 1 1
25.1 Advisory and assistance services.. 5 5 4
25.2 Other services.................... 20 21 17
25.5 Research and development contracts 2
41.0 Grants, subsidies, and
contributions................... 1,508 2,790 2,701
--------- --------- ----------

[[Page 351]]

99.9 Total new obligations........... 1,536 2,817 2,723
---------------------------------------------------------------------------

Reading Excellence

For necessary expenses to carry out the Reading Excellence Act,
[$260,000,000] $286,000,000, which shall become available on July 1,
[1999] 2000, and shall remain available through September 30, [2000]
2001. (Department of Education Appropriations Act, 1999, as included in
Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Reading Excellence................ 260 286
--------- --------- ----------
10.00 Total new obligations........... 260 286
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 260 286
23.95 Total new obligations............. -260 -286
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 260 286
Permanent:

61.00 Transferred to other accounts... -210
65.00 Advance appropriation (definite) 210
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 260 286
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 247
73.10 Total new obligations............. 260 286
73.20 Total outlays (gross)............. -13 -105
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 247 428
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 13 14
86.93 Outlays from current balances..... 91
--------- --------- ----------
87.00 Total outlays (gross)........... 13 105
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 260 286
90.00 Outlays........................... 13 105
---------------------------------------------------------------------------

Reading Excellence.--The Reading Excellence Act, authorized in 1999,
funds programs to provide our children with the readiness skills and
support they need in early childhood to learn to read once they enter
school, to help ensure that all children read well and independently by
the end of the third grade, and to improve the instructional practices
of teachers and other instructional staff in elementary schools. States
that receive competitive grants will make subgrants on a competitive
basis to school districts to help them provide professional development
opportunities for instructional staff, operate tutoring programs, and
provide family literacy services.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0011-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 5 5
25.2 Other services.................... 4 5
41.0 Grants, subsidies, and
contributions................... 251 276
--------- --------- ----------
99.9 Total new obligations........... 260 286
---------------------------------------------------------------------------

Chicago Litigation Settlement

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0220-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 2 5
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 7 5
23.95 Total new obligations............. -2 -5
24.40 Unobligated balance available, end
of year......................... 5
----------------------------------------------------------------------------

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

Outlays (gross), detail:
86.93 Outlays from current balances..... 2 4 3
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 2 4 3
---------------------------------------------------------------------------

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, [$66,000,000] $77,000,000. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Grants to local educational
agencies........................ 60 62 62
00.02 Special programs for Indian
children........................ 3 13
00.03 National activities............... 1 2
00.04 Federal administration............ 3
--------- --------- ----------
10.00 Total new obligations........... 63 66 77
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 63 66 77
23.95 Total new obligations............. -63 -66 -77
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 63 66 77
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 67 77 78
73.10 Total new obligations............. 63 66 77
73.20 Total outlays (gross)............. -53 -65 -69
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 77 78 87
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 2 8 9

[[Page 352]]

86.93 Outlays from current balances..... 51 57 59
--------- --------- ----------
87.00 Total outlays (gross)........... 53 65 69
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 63 66 77
90.00 Outlays........................... 53 65 69
---------------------------------------------------------------------------

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 1998, 1,274 formula grants were made to local
educational agencies and certain tribal schools enrolling approximately
460,782 Indian students.

Special Programs for Indian children.--Competitive grants are made
for a demonstration grants program and a professional development
program. Increased funding in 2000 will support an initiative to train
and recruit 1,000 new Indian teachers for positions in school districts
with high concentrations of Indian students.

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

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0101-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 2
25.2 Other services.................... 1 1
41.0 Grants, subsidies, and
contributions................... 60 65 77
--------- --------- ----------
99.9 Total new obligations........... 63 66 77
---------------------------------------------------------------------------

Personnel Summary

OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS

Federal Funds

General and special funds:

Bilingual and Immigrant Education

For carrying out, to the extent not otherwise provided, bilingual,
foreign language and immigrant education activities authorized by parts
A and C and section 7203 of title VII of the Elementary and Secondary
Education Act of 1965, [without regard to section 7103(b), $380,000,000]
$415,000,000: Provided, That State educational agencies may use all, or
any part of, their part C allocation for competitive grants to local
educational agencies. (Department of Education Appropriations Act, 1999,
as included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Instructional services............ 160 160 170
00.02 Support services.................. 14 14 14
00.03 Training grants................... 25 50 75
00.04 Foreign language assistance....... 5 6 6
00.05 Immigrant education............... 150 150 150
--------- --------- ----------
10.00 Total new obligations........... 354 380 415
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 354 380 415
23.95 Total new obligations............. -354 -380 -415
23.98 Unobligated balance expiring...... -1
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 354 380 415
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 319 465 460
73.10 Total new obligations............. 354 380 415
73.20 Total outlays (gross)............. -207 -385 -416
73.40 Adjustments in expired accounts... -1
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 465 460 459
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 3 46 50
86.93 Outlays from current balances..... 204 340 366
--------- --------- ----------
87.00 Total outlays (gross)........... 207 385 416
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 354 380 415
90.00 Outlays........................... 207 385 416
---------------------------------------------------------------------------

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 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 3 3 3
25.2 Other services.................... 3 3
41.0 Grants, subsidies, and
contributions................... 351 374 409
--------- --------- ----------
99.9 Total new obligations........... 354 380 415
---------------------------------------------------------------------------

[[Page 353]]

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

Federal Funds

General and special funds:

Special Education

For carrying out the Individuals with Disabilities Education Act,
[$5,124,146,000] $5,449,896,000, of which [$4,879,885,000]
$3,226,635,000 shall become available for obligation on July 1, [1999]
2000, and shall remain available through September 30, [2000: Provided,
That $1,500,000 shall be awarded to The Organizing Committee for The
1999 Special Olympics World Summer Games and $1,500,000, to remain
available until expended, shall be for preparation and planning and
shall be awarded to The Organizing Committee of The 2001 Special
Olympics World Winter Games: Provided further, That $600,000 shall be
for the Early Childhood Development Project of the National Easter Seal
Society for the Mississippi Delta Region, which funds shall be used to
provide training, technical support, services, and equipment to address
personnel and other needs] 2001, and of which $1,925,000,000 shall
become available on October 1, 2000 and shall remain available through
September 30, 2001, for academic year 2000-2001. (Department of
Education Appropriations Act, 1999, as included in Public Law 105-277,
section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
State grants:

00.01 Grants to States................ 3,841 4,336 2,389
00.02 Preschool grants................ 380 374 402
00.03 Grants for infants and families. 418 439 390
--------- --------- ----------
00.91 Subtotal, State grants........ 4,639 5,149 3,181
National activities:

01.01 State improvement............... 14 57 45
01.02 Research and innovation......... 64 65 65
01.03 Technical assistance and
dissemination................. 44 45 45
01.04 Personnel preparation........... 81 82 82
01.05 Parent information centers...... 19 19 23
01.06 Technology and media services... 33 35 35
01.07 Primary education intervention.. 50
--------- --------- ----------
01.91 Subtotal, National activities. 255 302 343
--------- --------- ----------
10.00 Total new obligations........... 4,895 5,451 3,525
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 203 118 1
22.00 New budget authority (gross)...... 4,811 5,334 3,525
22.10 Resources available from
recoveries of prior year
obligations..................... 6
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 5,020 5,452 3,526
23.95 Total new obligations............. -4,895 -5,451 -3,525
23.98 Unobligated balance expiring...... -7
24.40 Unobligated balance available, end
of year......................... 118 1 1
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 4,811 5,124 3,525
Permanent:

62.00 Transferred from other accounts. 210
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 4,811 5,334 3,525
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 4,778 5,990 7,177
73.10 Total new obligations............. 4,895 5,451 3,525
73.20 Total outlays (gross)............. -3,659 -4,264 -5,129
73.40 Adjustments in expired accounts... -18
73.45 Adjustments in unexpired accounts. -6
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 5,990 7,177 5,573
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 182 256 273
86.93 Outlays from current balances..... 3,477 3,997 4,720
86.97 Outlays from new permanent
authority....................... 11
86.98 Outlays from permanent balances... 137
--------- --------- ----------
87.00 Total outlays (gross)........... 3,659 4,264 5,129
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 4,811 5,334 3,525
90.00 Outlays........................... 3,658 4,264 5,129
---------------------------------------------------------------------------

Summary of Program Level (in millions of dollars)

1998-1999
academic
year 1999-2000
academic year 2000-2001
academic year
Current Budget Authority............ 4,811 5,334 3,525
Advance appropriation............... 0 0 1,925
------------------------------------
Total program level............... 4,811 5,334 5,450
====================================
Increase in advance appropriation
over previous year.................. +0 +0 +1,925

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.
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. Research and Innovation is included in
the 21st Century Research Fund. The new Primary Education Intervention
program would help achieve this goal by assisting school districts in
addressing the needs of children with developmental delays ages 5
through 9 with marked problems in learning to read or behavioral
problems.

Performance data related to these goals include:

1998 actual 1999 est. 2000 est.
Number of children served in first
quarter of fiscal year:
Ages 3 through 21..................... 5,976,000 6,125,000 6,248,000
Ages 3 through 5...................... 571,888 582,200 592,700
Birth through 2....................... 197,376 203,300 208,400

1993-1994 ac1994-1995 actual 1995-1996
actual
Educational Environment
Percent of children ages 6 through 21
provided special education in:
Regular classrooms.................... 43.4 44.5 45.3
Resource rooms........................ 29.5 28.8 28.7
Separate classes...................... 22.7 22.4 21.7
Separate schools...................... 3.1 3.0 3.1
Residential facilities................ .8 .7 .7
Home or hospital...................... .6 .6 .6
Status of Exiting Students
Percent of students with disabilities
aged 14-21 leaving school:
Graduated with a diploma.............. 51.7 52.3 52.6
Graduated through certification....... 10.9 11.1 10.9

[[Page 354]]

Reached maximum age and other......... 2.7 2.5 2.4
Dropped out of school................. 34.7 34.2 34.1

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0300-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.2 Other services.................... 5 5 5
41.0 Grants, subsidies, and
contributions................... 4,890 5,446 3,520
--------- --------- ----------
99.9 Total new obligations........... 4,895 5,451 3,525
---------------------------------------------------------------------------

Rehabilitation Services and Disability Research

For carrying out, to the extent not otherwise provided, the
Rehabilitation Act of 1973, the Assistive Technology[-Related Assistance
for Individuals with Disabilities] Act of 1998, [or successor
legislation] and the Helen Keller National Center Act, [as amended,
$2,652,584,000] $2,717,114,000: Provided, That $15,000,000 shall be used
to support grants for up to three years to States under title III of the
Assistive Technology Act, of which the Federal share shall not exceed 75
percent in the first year, 50 percent in the second year, and 25 percent
in the third year, and that the requirements in section 302 of that Act
shall not apply to such grants. (Department of Education Appropriations
Act, 1999, as included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0301-0-1-506 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
Direct program:

00.01 Vocational rehabilitation State
grants........................ 2,247 2,304 2,339
00.02 Client assistance State grants.. 11 11 11
00.03 Training........................ 40 40 42
00.04 Demonstration and training
programs...................... 16 19 17
00.05 Migrant and seasonal farmworkers 2 2 2
00.06 Recreational programs........... 2 2 2
00.07 Protection and advocacy of
individual rights............. 10 11 11
00.08 Projects with industry.......... 22 22 22
00.09 Supported employment State
grants........................ 38 38 38
00.10 Independent living.............. 78 80 84
00.11 Program improvement............. 3 2 2
00.12 Evaluation...................... 2 2 2
00.13 Helen Keller National Center.... 7 9 9
00.14 National Institute on Disability
and Rehabilitation Research... 77 81 91
00.15 Assistive technology............ 36 30 45
--------- --------- ----------
01.00 Total direct program............ 2,591 2,653 2,717
09.01 Reimbursable program.............. 3 3 3
--------- --------- ----------
10.00 Total new obligations........... 2,594 2,656 2,720
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 2,594 2,656 2,720
23.95 Total new obligations............. -2,594 -2,656 -2,720
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 2,591 2,653 2,717
Permanent:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 3 3 3
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 2,594 2,656 2,720
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 997 1,100 875
73.10 Total new obligations............. 2,594 2,656 2,720
73.20 Total outlays (gross)............. -2,485 -2,881 -2,699
73.40 Adjustments in expired accounts... -6
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1,100 875 896
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1,620 1,857 1,902
86.93 Outlays from current balances..... 862 1,021 794
86.97 Outlays from new permanent
authority....................... 2 2 2
86.98 Outlays from permanent balances... 1 1 1
--------- --------- ----------
87.00 Total outlays (gross)........... 2,485 2,881 2,699
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -3 -3 -3
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 2,591 2,653 2,717
90.00 Outlays........................... 2,482 2,878 2,696
---------------------------------------------------------------------------

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 significant disabilities. Current law requires that
between 1.0 percent and 1.5 percent of the funds appropriated for the VR
State grants program be set aside for Grants for Indians in 2000.

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 whose service records were closed in fiscal years
1996 (351,525) and 1997 (347,619). The 2000 target is to increase the
number of individuals with disabilities achieving an employment outcome
by one percent over the previous year while maintaining the employment
outcome rate at 61 percent.

CONSUMER OUTCOMES (CASES CLOSED)

1996 actual 1997 actual
Individuals achieving employment
outcomes............................... 213,520 211,520
Percent with severe disabilities....... 78 80
Employment outcomes as a percent all of
individuals receiving services......... 61 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 and to upgrade the skills of those already
employed.

Demonstration and training programs.--Grants are made for programs
that expand, improve, or further the purpose of activities supported
under the Rehabilitation Act.

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

Recreational programs.--Grants are made to provide individuals with
disabilities with recreational 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 (PWI).--Grants are made to a variety of
public and private organizations to facilitate the establishment of
partnerships between rehabilitation service providers and business and
industry in order to create and expand employment and career advancement
opportunities for individuals with disabilities. In 1997, PWI projects
placed in competitive employment approximately 59 percent (11,300) of
the 19,109 individuals with disabilities served by the 119 projects.

[[Page 355]]

The 2000 target for this program is to place 62 percent of the
individuals served in competitive employment.

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 significant disabilities who require on-going support
services to enter or retain competitive employment. In 1997, 70.6
percent of individuals with a supported employment goal achieved a
competitive employment outcome. The 2000 target for this program is for
71.5 percent to achieve competitive employment outcomes.

Independent living.--Grants are awarded to States and nonprofit
agencies to assist individuals with significant disabilities in their
achievement of self-determined independent living goals. State agencies
and centers for independent living provide training and other direct
services and also engage in advocacy activities. Performance indicators
focus on customer satisfaction, achievement of individual goals, and
broader systemic reforms in the community.

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

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

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

National Institute on Disability and Rehabilitation Research.--The
Institute carries out a comprehensive and coordinated program of
rehabilitation research and related activities. Through grants and
contracts, it supports the conduct and disseminating of research aimed
at improving the lives of individuals with disabilities. The Institute
is included in the 21st Century Research Fund.

Assistive technology.--Activities include the Assistive Technology
State grant program, protection and advocacy services, and technical
assistance designed to develop and implement consumer-responsive
comprehensive statewide programs of technology-related assistance for
individuals with disabilities. Grants also are made to States to
establish alternative loan financing programs to increase access to
assistive technology for individuals with disabilities.

Object Classification (in millions of dollars)

Direct obligations:

25.1 Advisory and assistance services 6 6 6
25.2 Other services.................. 3 3 3
25.5 Research and development
contracts..................... 1 2 1
41.0 Grants, subsidies, and
contributions................. 2,581 2,642 2,707
--------- --------- ----------
99.0 Subtotal, direct obligations.. 2,591 2,653 2,717
99.0 Reimbursable obligations.......... 3 3 3
--------- --------- ----------
99.9 Total new obligations........... 2,594 2,656 2,720
---------------------------------------------------------------------------

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.), [$8,661,000] $8,973,000. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0600-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 8 9 9
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 8 9 9
23.95 Total new obligations............. -8 -9 -9
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 8 9 9
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 2 2 1
73.10 Total new obligations............. 8 9 9
73.20 Total outlays (gross)............. -8 -10 -9
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 2 1 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 6 8 8
86.93 Outlays from current balances..... 2 2 1
--------- --------- ----------
87.00 Total outlays (gross)........... 8 10 9
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 8 9 9
90.00 Outlays........................... 8 10 9
---------------------------------------------------------------------------

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 1998, the portion of the Federal appropriation
allocated to educational materials represented approximately 44.1
percent of the Printing House's total sales. The full appropriation
represented approximately 40.4 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.),
[$45,500,000] $47,925,000, of which $2,651,000 shall be for construction
and shall remain available until expended: Provided, That from the total
amount available, the Institute may at its discretion use funds for the
endowment program as authorized under section 207. (Department of
Education Appropriations Act, 1999, as included in Public Law 105-277,
section 101(f).)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0601-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Operations........................ 44 46 45
00.02 Construction...................... 3
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 44 46 48
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 44 46 48
23.95 Total new obligations............. -44 -46 -48
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 44 46 48
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 1 3

[[Page 356]]

73.10 Total new obligations............. 44 46 48
73.20 Total outlays (gross)............. -44 -43 -47
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1 3 3
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 44 43 44
86.93 Outlays from current balances..... 1 3
--------- --------- ----------
87.00 Total outlays (gross)........... 44 43 47
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 44 46 48
90.00 Outlays........................... 44 43 47
---------------------------------------------------------------------------

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 1998, Federal appropriations
represented 81 percent of the Institute's operating budget. The
Institute may use appropriated funds for the Endowment Grant program.
The request also includes funds for the first phase of a construction
project to renovate the Institute's dormitories.

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.), [$83,480,000] $85,120,000, of which $2,500,000
shall be for construction and shall remain available until expended:
Provided, That from the total amount available, the University may at
its discretion use funds for the endowment program as authorized under
section 207. (Department of Education Appropriations Act, 1999, as
included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0602-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Operations........................ 81 83 83
00.02 Construction...................... 2
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 81 83 85
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 81 83 85
23.95 Total new obligations............. -81 -83 -85
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 81 83 85
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 2 2 5
73.10 Total new obligations............. 81 83 85
73.20 Total outlays (gross)............. -82 -80 -85
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 2 5 6
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 80 78 78
86.93 Outlays from current balances..... 2 2 5
--------- --------- ----------
87.00 Total outlays (gross)........... 82 80 85
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 81 83 85
90.00 Outlays........................... 82 80 85
---------------------------------------------------------------------------

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 1998, the Federal appropriation represented 64 percent of the
University's operating budget, excluding Federal financial aid,
vocational rehabilitation, and competitive grants, and 97.4 percent of
the operating budgets of the related elementary and secondary schools.
The University may also use appropriated funds for the Endowment Grant
program. The request also includes funds for a construction project to
renovate facilities at the Model Secondary School for the Deaf.

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] Technical Education Act
[and], the Adult Education and Family Literacy Act, and title VIII-D of
the Higher Education Act of 1965, as amended, [$1,539,247,000]
$1,750,250,000, of which $3,500,000 shall remain available until
expended, and of which [$1,535,147,000] $1,734,150,000 shall become
available on July 1, [1999] 2000 and shall remain available through
September 30, [2000: 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] 2001: Provided,
That of the amounts made available for the Perkins Act, $4,100,000 shall
be for tribally controlled vocational institutions under section 117:
Provided further, That, of the amounts made available for the Adult
Education and Family Literacy Act, [$6,000,000] $101,000,000 shall be
for national leadership activities under section 243 and $6,000,000
shall be for the National Institute for Literacy under section 242[:
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]: Provided further, That of the amounts made available for
title I of the Perkins Act, the Secretary may reserve up to 0.54 percent
for incentive grants under section 503 of the Workforce Investment Act,
without regard to section 111(a)(1)(C) of the Perkins Act: Provided
further, That of the amounts made available for the Adult Education and
Family Literacy Act, the Secretary may reserve up to 1.72 percent for
incentive grants under section 503 of the Workforce Investment Act,
without regard to section 211(a)(3) of the Adult Education and Family
Literacy Act. (Department of Education Appropriations Act, 1999, as
included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Vocational education:

Annual appropriations:
Basic grants:
00.01 Basic State grants.......... 1,010 1,013 1,013
00.02 Territorial set-aside....... 2 3 2
00.03 Indian and Hawaiian natives
set-aside................. 15 31 15
--------- --------- ----------
00.91 Subtotal, basic grants.... 1,027 1,047 1,030

[[Page 357]]

01.01 National programs............. 13 27 18
01.02 Tribally controlled
postsecondary vocational
institutions................ 3 4 4
01.03 Tech-prep education........... 103 106 111
--------- --------- ----------
01.91 Direct Program by
Activities--Subtotal (1
level).................... 119 137 133
--------- --------- ----------
02.00 Total, vocational education. 1,146 1,184 1,163
Adult education:
03.01 State grants................ 345 365 468
03.02 National Institute for
Literacy.................. 5 11 6
03.03 National leadership
activities................ 5 19 101
03.04 Literacy programs for
prisoners................. 5 5
--------- --------- ----------
03.91 Total, adult education...... 360 400 575
04.01 State grants for incarcerated
youth offenders............... 12
--------- --------- ----------
10.00 Total new obligations........... 1,506 1,584 1,750
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 44 45
22.00 New budget authority (gross)...... 1,508 1,539 1,750
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,552 1,584 1,750
23.95 Total new obligations............. -1,506 -1,584 -1,750
24.40 Unobligated balance available, end
of year......................... 45
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 1,508 1,539 1,750
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 1,735 1,781 2,045
73.10 Total new obligations............. 1,506 1,584 1,750
73.20 Total outlays (gross)............. -1,451 -1,320 -1,486
73.40 Adjustments in expired accounts... -9
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1,781 2,045 2,310
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 83 78 88
86.93 Outlays from current balances..... 1,361 1,241 1,397
86.98 Outlays from permanent balances... 7 2
--------- --------- ----------
87.00 Total outlays (gross)........... 1,451 1,320 1,486
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,508 1,539 1,750
90.00 Outlays........................... 1,451 1,320 1,486
---------------------------------------------------------------------------
Note.--Includes $12 million in budget authority in 2000 for State grants
for incarcerated youth offenders previously financed from:
(In millions of dollars)
1998 actual 1999 estimate
Office of Postsecondary Education,
Higher Education...................... 12 17

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

[In millions of dollars]

1998 actual 1999 est. 2000 est.
1. Vocational education:
a. Basic grants................. 1,028 1,031 1,031
b. National programs............ 13 13 18
c. Tribally controlled
postsecondary vocational
institutions.................. 3 4 4
d. Tech-prep education.......... 103 106 111
2. Adult education:
a. State grants................. 345 365 468
b. National Institute for
Literacy...................... 5 6 6
c. National leadership
activities.................... 5 14 101
d. Literacy programs for
prisoners..................... 5 0 0
3. State grants for incarcerated
youth offenders............... 0 0 12
------------------------------------
Total..................... 1,508 1,539 1,750
====================================

Vocational education.--
Basic grants.--Formula grants provide funds to States and
localities to expand and improve their programs of vocational
education and promote equal opportunity in vocational education
programs for historically underserved populations. Funds under the
Indian program are awarded to federally recognized Indian tribes and
are in addition to services provided under other provisions of the
Perkins Act. Funds under the Hawaiian Natives program are awarded to
organizations primarily serving and representing Hawaiian Natives.
Funds under the Territorial set-aside support the expansion and
improvement of vocational education programs in American Samoa,
Guam, the Northern Marianas, and the Freely Associated States.
National programs.--Funds are awarded on a competitive basis for
activities that contribute to knowledge of how to improve access to
vocational education for underserved populations and how to improve
vocational education nationally. Activities include a national
center for research in vocational education and a program of
discretionary research and development projects, including a
national assessment of vocational education.
Tribally controlled postsecondary vocational institutions.--
Grants support the operation and improvement of tribally controlled
postsecondary vocational institutions, to ensure continued and
expanded educational opportunities for Indian students.
Tech-prep education.--Formula grants to States support planning
and demonstration grants to consortia of local educational agencies
and postsecondary institutions to develop and operate model 4-year
programs. Programs begin in high school and provide students with
the mathematical, scientific, communications, and technological
skills needed to earn a 2-year associate degree or a 2-year
certificate in a specific occupational field.

Adult Education.--
State programs.--Formula grants are made to States to help
eliminate functional illiteracy among the Nation's adults, to assist
adults in obtaining a high school diploma or its equivalent, and to
promote family literacy.
National Institute for Literacy.--Funds support the Institute's
national leadership activities to improve and expand the Nation's
system for delivery of literacy services.
National leadership activities.--Funds support discretionary
activities to evaluate the effectiveness of Federal, State, and
local adult education programs and to test and demonstrate methods
of improving program quality. New activities initiated in 2000 will
include development of model programs for providing English language
and citizenship education to recent immigrants, and models for using
technology to expand service delivery.
State Grants for Incarcerated Youth Offenders.--Formula grants
are made to State correctional agencies to assist and encourage
incarcerated youths to acquire functional literacy skills and life
and job skills.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0400-0-1-501 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
11.3 Personnel compensation: Other than
full-time permanent............. 1 1 1
23.1 Rental payments to GSA............ 1
25.1 Advisory and assistance services.. 2 1
25.2 Other services.................... 1 1
25.5 Research and development contracts 11 5 6
25.7 Operation and maintenance of
equipment....................... 1
41.0 Grants, subsidies, and
contributions................... 1,491 1,573 1,741
--------- --------- ----------
99.0 Subtotal, direct obligations.. 1,505 1,583 1,749
99.5 Below reporting threshold......... 1 1 1
--------- --------- ----------
99.9 Total new obligations........... 1,506 1,584 1,750
---------------------------------------------------------------------------

[[Page 358]]

Personnel Summary

OFFICE OF POSTSECONDARY EDUCATION

Federal Funds

General and special funds:

Student Financial Assistance

For carrying out subparts 1, 3 and 4 of part A, part C and part E of
title IV of the Higher Education Act of 1965, as amended,
[$9,348,000,000] $9,183,000,000, which shall remain available through
September 30, [2000] 2001.
The maximum Pell Grant for which a student shall be eligible during
award year [1999-2000] 2000-2001 shall be [$3,125] $3,250: 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
[1998] 1999 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 1999-2000 exceed the amount needed to
fund Pell Grants at a maximum award of $3,125 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 1999-2000 with a $3,125 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]. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Federal Pell grants:

01.01 Federal Pell grants............. 6,678 7,667 7,555
Campus-based aid:

02.01 Federal supplemental educational
opportunity grants (SEOG)..... 621 619 631
02.02 Federal work-study.............. 838 870 934
02.03 Federal Perkins loans: Federal
capital contributions......... 136 100 100
02.05 Federal Perkins loans: Loan
cancellations................. 30 30 30
--------- --------- ----------
02.91 Subtotal, Campus-based
activities.................. 1,625 1,619 1,695
03.01 State student incentive grants/
Leveraging educational
assistance partnership.......... 25 25 25
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 8,328 9,311 9,275
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 2,150 2,891 2,928
22.00 New budget authority (gross)...... 8,979 9,348 9,183
22.10 Resources available from
recoveries of prior year
obligations..................... 91
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 11,220 12,239 12,111
23.95 Total new obligations............. -8,328 -9,311 -9,275
23.98 Unobligated balance expiring...... -1
24.40 Unobligated balance available, end
of year......................... 2,891 2,928 2,836
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 8,979 9,348 9,183
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 4,421 4,704 4,663
73.10 Total new obligations............. 8,328 9,311 9,275
73.20 Total outlays (gross)............. -7,934 -9,352 -9,144
73.40 Adjustments in expired accounts... -21
73.45 Adjustments in unexpired accounts. -91
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 4,704 4,663 4,793
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1,658 1,950 1,749
86.93 Outlays from current balances..... 6,276 7,402 7,395
--------- --------- ----------
87.00 Total outlays (gross)........... 7,934 9,352 9,144
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 8,979 9,348 9,183
90.00 Outlays........................... 7,934 9,352 9,144
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0200-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 141 137 154
1251 Repayments: Repayments and
prepayments..................... -25 -26 -27
Write-offs for default:

1263 Direct loans.................... -7 -9 -8
1264 Other adjustments, net.......... 28 52 55
--------- --------- ----------
1290 Outstanding, end of year........ 137 154 174
---------------------------------------------------------------------------
\1\ Includes in all years institutional matching share of defaulted
notes assigned from institutions to the Education Department.

Federal Pell Grants.--Undergraduate students establish eligibility
for these grants under award and need determination rules set out in the
authorizing statute and the annual appropriations act.

The Administration is proposing a $125 increase in the maximum Pell
Grant award to $3,250 for 2000.

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.

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, and for
students working as math tutors for children in kindergarten through 9th
grade in support of the America Counts Challenge.

Perkins Loan Program.--Institutions award low-interest loans from
institutional revolving funds, which are comprised

[[Page 359]]

of Federal Capital Contributions, institutional matching funds, and
student repayments on outstanding loans.

The Higher Education Amendments of 1998 eliminated the Perkins Loan
Revolving Fund, which was previously authorized under section 467(c) of
the Higher Education Act. Collections from assigned loans and audits
would have been deposited into this revolving fund for redistribution to
institutions to make new loans.

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.

Leveraging Educational Assistance Partnership Program.--Under this
program, formerly known as the State Student Incentive Grant (SSIG)
Program, Federal matching funds are awarded to assist States in
providing programs of grants and work-study assistance to needy students
attending qualifying institutions. When appropriations are $30 million
or less, States must match these Federal funds on at least a dollar-for-
dollar basis and comply with statutory maintenance of effort
requirements. State awards to students may not exceed $5,000 per
academic year.

When appropriations exceed $30 million, those funds in excess of $30
million are reserved for a new program: Special Leveraging Educational
Assistance Partnership Program. Under Special LEAP, States may use the
grant funds for several new authorized activities including increasing
the dollar amount of LEAP grants to students who demonstrate financial
need. The Federal share of the cost of these new authorized activities
may not exceed 33\1/3\ percent.

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.

AID FUNDS AVAILABLE FOR POSTSECONDARY EDUCATION AND TRAINING

[In millions of dollars]

1998 actual 1999 est. 2000 est.
Pell grants......................... 7,211 7,373 7,893
Student loans:
Guaranteed student loans:
Stafford loans.................. 10,762 10,905 11,344
Unsubsidized Stafford loans..... 7,292 7,858 8,477
PLUS............................ 1,949 2,158 2,422
Direct student loans:
Stafford loans.................. 5,842 6,210 6,463
Unsubsidized Stafford loans..... 3,501 3,896 4,204
PLUS............................ 1,057 1,257 1,411
Consolidation:
FFEL............................ 3,234 2,656 2,763
Direct Loans.................... 2,431 4,869 4,077
------------------------------------
Student loans, subtotal..... 26,067 39,809 41,161
Work-study.......................... 1,002 1,044 1,123
Supplemental educational opportunity
grants.............................. 777 784 799
Perkins loans....................... 1,058 1,058 1,058
Leveraging Educational Assistance
Partnership......................... 50 50 50
------------------------------------
Total aid available......... 46,166 50,118 52,084
====================================
Note: Detail may not add to totals due to rounding.

NUMBER OF AID AWARDS

[In thousands]

1998 actual 1999 est. 2000 est.
Pell grants......................... 3,838 3,811 3,864
Student loans:
Guaranteed student loans:
Stafford loans.................. 3,169 3,227 3,329
Unsubsidized Stafford loans..... 1,904 2,068 2,189
PLUS............................ 305 331 361
Direct student loans:
Stafford loans.................. 1,787 1,840 1,898
Unsubsidized Stafford loans..... 1,059 1,092 1,157
PLUS............................ 171 191 208
Consolidation:
FFEL............................ 194 168 173
Direct Loans.................... 107 194 167
------------------------------------
Student loans, subtotal..... 8,696 9,110 9,481
Work-study........................ 892 930 1,000
Supplemental educational
opportunity grants.............. 1,109 1,118 1,139
Perkins loans..................... 698 698 698
Leveraging Educational Assistance
Partnership..................... 83 83 83
------------------------------------
Total awards................ 15,317 15,751 16,265
====================================
Note: Detail may not add to totals due to rounding.

AVERAGE AID AWARDS

[In whole dollars]

1998 actual 1999 est. 2000 est.
Pell grants......................... 1,879 1,935 2,043
Student loans:
Guaranteed student loans:
Stafford loans.................. 3,396 3,379 3,408
Unsubsidized Stafford loans..... 3,830 3,799 3,873
PLUS............................ 6,395 6,514 6,710
Direct student loans:
Stafford loans.................. 3,269 3,376 3,405
Unsubsidized Stafford loans..... 3,306 3,568 3,634
PLUS............................ 6,174 6,593 6,791
Consolidation:
FFEL............................ 16,643 15,827 15,964
Direct Loans.................... 22,772 25,116 24,427
Work-study.......................... 1,123 1,123 1,123
Supplemental educational opportunity
grants.............................. 701 701 701
Perkins loans....................... 1,516 1,516 1,516
Leveraging Educational Assistance
Partnership......................... 600 600 600

NUMBER OF STUDENTS AIDED

[In thousands]

1998 actual 1999 est. 2000 est.
Unduplicated student count.......... 8,245 8,462 8,769

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

ADMINISTRATIVE PAYMENTS TO INSTITUTIONS

[In millions of dollars]

1998 actual 1999 est. 2000 est.
Pell grants......................... 20 20 20
Work-study.......................... 63 65 70
Supplemental educational opportunity
grants.............................. 31 31 32
Perkins loans....................... 42 42 41

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

DEFAULTED PERKINS LOANS

[In millions of dollars]

1998 actual 1999 est. 2000 est.
Outstanding defaulted loans,
beginning of year:
Assigned defaulted loans \1\...... 141 137 154
Unassigned defaulted loans \2\.... 932 994 1,060
New defaulted loans................. 197 226 235
Collections on assigned loans....... -25 -26 -27
Collections on unassigned loans..... -94 -98 -102
Write-offs for assigned loans....... -7 -9 -8
Write-offs for unassigned loans..... -13 -10 -7
------------------------------------
Outstanding defaulted loans, end of
year................................ 1,131 1,214 1,305
====================================
\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 1998, $94 thousand in
1999, and $94 thousand in 2000. These amounts are recorded as
outstanding loans in the ``Status of Direct Loans'' schedule.
\2\ Unassigned loans at institutions.

[[Page 360]]

Higher Education

For carrying out, to the extent not otherwise provided, section 121
and titles II, III, IV, V, VI, VII, and VIII of the Higher Education Act
of 1965, as amended, and the Mutual Educational and Cultural Exchange
Act of 1961 [and Public Law 102-73; $1,307,846,000] $1,527,206,000, of
which [$13,000,000] $12,000,000 for interest subsidies authorized by
section 121 of the Higher Education Act, shall remain available until
expended: [Provided, That $16,723,000 shall be for Youth Offender
Grants, of which $4,723,000, which shall become available on July 1,
1999, and remain available until September 30, 2000, shall be used in
accordance with section 601 of Public Law 102-73 as that section was in
effect prior to enactment of Public Law 105-220: Provided further, That
$4,800,000, to be available until expended, shall be for Salem State
College in Salem, Massachusetts for activities authorized under Title
III, part A, section 311(c)(2), of the Higher Education Act of 1965, as
amended: Provided further, That of the funds made available under title
VII, part B, $5,000,000 shall be awarded to the St. Petersburg Junior
College for a demonstration of a national method for increasing access
to four year degrees and work force training for students attending
community college; $2,000,000 shall be for the Technology-Assisted
Learning Campus in New Rochelle, New York for high-tech equipment;
$250,000 shall be awarded to the Center for Urban Research and Learning,
Loyola University, Chicago; $1,150,000 shall be awarded to the Southeast
Community College in Letcher County, Kentucky; $3,000,000 shall be for
the Oregon State University Distance Education Alliance; $1,000,000
shall be for the Appalachian Center for Economic Networks in Athens,
Ohio; $6,000,000 shall be to establish the Robert J. Dole Institute for
Public Service and Public Policy on the University of Kansas campus in
Lawrence, Kansas; $1,000,000 shall be for the Oregon Institute of Public
Service and Constitutional Studies at the Mark O. Hatfield School of
Government at Portland State University; $2,150,000 shall be awarded to
the College of Natural Resources, University of Wisconsin at Stevens
Point for technology-enhanced learning; $1,500,000 shall be for the
Touro Law Center in Central Islip, New York for the use of technology to
bridge the gap between legal education and the actual practice of law;
$1,000,000 shall be for the International Center for Educational
Technology and Distance Learning at Empire State College; $500,000 shall
be for the University of Northern Iowa National Institute of Technology
for Inclusive Education; $1,500,000 shall be for a demonstration project
to expand the successful college student preparation at Prairie View
A&M, Texas; $750,000 shall be to identify and provide models of alcohol
and drug abuse prevention and education in higher education at the
college level; $500,000 shall be for a teacher training program in
experiential learning to be awarded to the Department of Language
Teacher Education, School for International Training, Brattleboro,
Vermont; and $1,000,000 shall be for the Paul Simon Public Policy
Institute at Southern Illinois University at Carbondale, Illinois:
Provided further, That $9,500,000 of the funds made available for title
VII, part B shall be for a competition consistent with the subject areas
outlined in the House and Senate reports and the statement of the
managers, and that such competition should be administered in a manner
consistent with current departmental practices and policies] Provided,
That notwithstanding section 210 of the Higher Education Act, of the
funds provided under this heading for title II of the Higher Education
Act, not less than $35,000,000 shall be for section 204, with the
remainder divided evenly between sections 202 and 203: Provided further,
That funds available for part A, subpart 2 of title VII of the Higher
Education Act shall be available to fund awards for academic year 2000-
2001 for fellowships under part A, subpart 1 of title VII of said Act,
under the terms and conditions of part A, subpart 1; Provided further,
That $15,000,000 is for college awareness and preparation activities for
middle and secondary school students and adults to inform them of the
importance of postsecondary education and the availability of Federal
student financial assistance: Provided further, That $4,000,000 is for
data collection and evaluation activities for programs under the Higher
Education Act, including such activities needed to comply with the
Government Performance and Results Act of 1993. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Aid for institutional development:

00.01 Strengthening institutions...... 55 60 62
00.02 Strengthening tribally
controlled colleges and
universities.................. 3 6
00.03 Strengthening Alaska Native and
Native Hawaiian-serving
institutions.................. 3 3
00.04 Strengthening historically black
colleges and universities..... 119 134 149
00.05 Strengthening historically black
graduate institutions......... 25 30 32
00.06 Minority science and engineering
improvement................... 5 8 8
--------- --------- ----------
00.91 Subtotal, aid for
institutional development... 204 238 260
Other aid for institutions:

01.01 Developing Hispanic-serving
institutions.................. 12 28 42
01.02 International education and
foreign language studies...... 60 68 69
01.03 Fund for the Improvement of
Postsecondary Education....... 25 50 28
01.04 Urban community service......... 5 5
01.05 Demonstration projects to ensure
quality higher education for
students with disabilities.... 5 5
01.06 Interest subsidy grants......... 12 13 12
01.07 Mary McLeod Bethune Memorial
Fine Arts Center.............. 7
--------- --------- ----------
01.91 Subtotal, other aid for
institutions................ 121 169 156
Assistance for students:

02.01 Federal TRIO programs........... 530 600 630
02.02 Gaining early awareness and
readiness for undergraduate
programs (GEAR UP)............ 120 240
02.03 National early intervention
scholarships and partnerships. 4
02.04 Byrd honors scholarships........ 39 39 39
02.05 Graduate assistance in areas of
national need................. 30 31 41
02.06 Child care access means parents
in school..................... 5 5
02.07 Learning anytime anywhere
partnerships.................. 10 20
02.08 Preparing for college campaign.. 15
02.09 Advanced placement fees......... 3
02.10 State grants for incarcerated
youth offenders............... 12 17
--------- --------- ----------
02.91 Subtotal, aid for students.... 618 822 990
03.01 Teacher quality enhancement....... 77 115
03.02 Minority teacher recruitment...... 2
03.03 Underground railroad program...... 2 2
03.04 GPRA data/program evaluation...... 4
--------- --------- ----------
03.91 Subtotal, Other Aid............. 2 79 121
--------- --------- ----------
10.00 Total new obligations........... 945 1,308 1,527
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 4 5 5
22.00 New budget authority (gross)...... 947 1,308 1,527
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 951 1,313 1,532
23.95 Total new obligations............. -945 -1,308 -1,527
24.40 Unobligated balance available, end
of year......................... 5 5 5
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 947 1,308 1,527
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 936 1,095 1,340
73.10 Total new obligations............. 945 1,308 1,527
73.20 Total outlays (gross)............. -785 -1,062 -1,242
73.40 Adjustments in expired accounts... -1
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1,095 1,340 1,626
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 52 166 192
86.93 Outlays from current balances..... 733 895 1,051
--------- --------- ----------
87.00 Total outlays (gross)........... 785 1,062 1,242
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 947 1,308 1,527
90.00 Outlays........................... 785 1,062 1,242
---------------------------------------------------------------------------

[[Page 361]]

Summary of Budget Authority and Outlays

(in millions of dollars)

1998 actual 1999 est. 2000 est.
Enacted/requested:
Budget Authority.................. 947 1,308 1,527
Outlays........................... 785 1,061 1,243
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 52
Outlays........................... 6
------------------------------------
Total:
Budget Authority.................. 947 1,308 1,579
Outlays........................... 785 1,061 1,249
====================================
Note.--Excludes $12 million in budget authority in 2000 for State grants
for incarcerated youth offenders, which is transferred to the Office of
Vocational and Adult Education, vocational and adult education account.
Comparable amounts for 1998 ($12 million) and 1999 ($17 million) are
included above.

Aid for institutional development.--
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 tribally controlled colleges and universities.--
Funds will support grants to American Indian tribally controlled
colleges and universities with scarce resources to enable them to
improve and expand their capacity to serve Indian students.
Strengthening Alaska Native and Native Hawaiian-serving
institutions.--Funds will support Alaska Native and native Hawaiian-
serving institutions to enable them to improve and expand their
capacity to serve students.
Strengthening historically black colleges and universities.--
Funds will support grants to help historically black undergraduate
institutions to improve and expand their capacity to serve students,
and to strengthen management and fiscal operations.
Strengthening historically black graduate institutions.--Funds
will support grants to help historically black graduate institutions
to improve and expand their capacity to serve students, and to
strengthen management and fiscal operations.
Minority science and engineering improvement.--Funds will
support grants to predominantly minority institutions to help them
make long-range improvements in science and engineering education
and to increase the participation of minorities in scientific and
technological careers.
Other aid for institutions.--
Developing Hispanic-serving institutions.--Funds will support
Hispanic-serving institutions to enable them to improve and expand
their capacity to serve students.
International education and foreign language studies programs.--
Funds will promote the development and improvement of international
and foreign language programs.
Fund for the improvement of postsecondary education.--Funds will
support flexible, field-initiated postsecondary improvement projects
in a broad range of activities, as well as special focus programs.
Demonstration projects to ensure students with disabilities
receive a quality higher education.--Funds will support model
demonstration projects to provide technical assistance or
professional development for faculty and administrators in
institutions of higher education in order to provide students with
disabilities a quality postsecondary education.
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 major programs to help prepare
disadvantaged students for college and graduate studies.
Gaining early awareness and readiness for undergraduate programs
(GEAR UP).--Funds will support State and partnership grants designed
to increase secondary school achievement and college enrollment of
students in high-poverty schools by providing early college
preparation and awareness activities.
Byrd honors scholarships.--Funds will support postsecondary
scholarships for outstanding high school students who show promise
of continued academic excellence.
Graduate assistance in areas of national need.--Funds will
support fellowships to financially needy graduate students who are
studying in areas of national need, and who are or traditionally
have been under-represented in these areas. Funds will also support
students of superior ability completing graduate-level education.
Child care access means parents in school.--Funds will support a
new program designed to bolster the participation of low-income
parents in postsecondary education through the provision of campus-
based child care services.
Learning anytime anywhere partnerships.--Funds will support
pilot projects using distance learning technology and other
innovations to promote and enhance the delivery of postsecondary
education and lifelong learning opportunities.
Preparing for college.--Funds are for college awareness and
preparation activities for middle and secondary school students and
adults to inform them of the importance of postsecondary education
and the availability of Federal student financial assistance.
Other Programs.--
Teacher quality enhancement.--Funds will support programs that
seek to make lasting changes in the ways our Nation recruits,
prepares, licenses, and supports teachers.
Underground railroad program.--Funds will support grants to one
or more nonprofit educational organizations to establish facilities
to house, display, and interpret artifacts relating to the history
of the Underground Railroad.
GPRA data/HEA program evaluation.--Funds are for data collection
and evaluation activities for programs under the Higher Education
Act of 1965, including such activities needed to comply with the
Government Performance and Results Act of 1993.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0201-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 3
25.2 Other services.................... 2 5 4
25.3 Purchases of goods and services
from Government accounts........ 1
41.0 Grants, subsidies, and
contributions................... 938 1,303 1,523
--------- --------- ----------
99.0 Subtotal, direct obligations.. 944 1,308 1,527
99.5 Below reporting threshold......... 1
--------- --------- ----------
99.9 Total new obligations........... 945 1,308 1,527
---------------------------------------------------------------------------

Higher Education

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
Assistance for students:

01.01 College completion challenge
grants........................ 35
01.02 D.C. resident tuition support... 17
--------- --------- ----------
10.00 Total new obligations........... 52
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 52
23.95 Total new obligations............. -52
----------------------------------------------------------------------------

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

Change in unpaid obligations:
73.10 Total new obligations............. 52
73.20 Total outlays (gross)............. -6
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 46
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 6
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 52
90.00 Outlays........................... 6
---------------------------------------------------------------------------

The Administration will propose legislation that will authorize the
use of funds for the following purposes:
College completion challenge grants.--Funds will support grants
to help institutions of higher education increase the persistence
rate of students at risk of dropping out of col

[[Page 362]]

lege by providing intensive summer programs, larger grant awards,
and support services.
D.C. resident tuition support.--Funds will pay the difference
between in-State and out-of-State tuition at public institutions of
higher education in Maryland and Virginia on behalf of eligible D.C.
residents.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0201-2-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.2 Other services.................... 1
41.0 Grants, subsidies, and
contributions................... 51
--------- --------- ----------
99.9 Total new obligations........... 52
---------------------------------------------------------------------------

Howard University

For partial support of Howard University (20 U.S.C. 121 et seq.),
[$214,489,000] $219,444,000, 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) [and], of which $3,530,000 shall
remain available until expended. (Department of Education Appropriations
Act, 1999, as included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0603-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 General support................... 181 185 189
00.02 Howard University Hospital........ 29 29 30
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 210 214 219
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 210 214 219
23.95 Total new obligations............. -210 -214 -219
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 210 214 219
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 5 10 13
73.10 Total new obligations............. 210 214 219
73.20 Total outlays (gross)............. -206 -211 -219
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 10 13 13
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 204 201 206
86.93 Outlays from current balances..... 2 10 13
--------- --------- ----------
87.00 Total outlays (gross)........... 206 211 219
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 210 214 219
90.00 Outlays........................... 206 211 219
---------------------------------------------------------------------------

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 1998, direct Federal appropriations for general
support represented approximately 58 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 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Collection costs.................. 3
--------- --------- ----------
10.00 Total obligations (object class
25.2)......................... 3
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 1 53
22.00 New budget authority (gross)...... 55
22.40 Capital transfer to general fund.. -53
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 56
23.95 Total new obligations............. -3
24.40 Unobligated balance available, end
of year......................... 53
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 55
----------------------------------------------------------------------------

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

Outlays (gross), detail:
86.98 Outlays from permanent balances... 3
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -55
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -55 3
---------------------------------------------------------------------------

The Higher Education Amendments of 1998 repealed the Perkins Loan
Revolving fund. Pursuant to section 467 of the Higher Education
Amendments of 1998, these funds will be returned to the general fund of
the Treasury.

Federal Family Education Loan Insurance Fund

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4256-0-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 47
22.00 New budget authority (gross)...... 47
22.40 Capital transfer to general fund.. -47
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 47
24.40 Unobligated balance available, end
of year......................... 47
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 47
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -47
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -47
---------------------------------------------------------------------------

The Federal Family Education Loan Insurance Fund was established
under Section 431 of the Higher Education Act of 1965, as amended, for
use by the Secretary of Education to pay administrative costs related to
default management

[[Page 363]]

and prevention, guaranty agency oversight, and related expenses. In late
1998, the Department of Education transferred $46.8 million into this
insurance fund; these funds had been identified during an account
reconciliation project as FFEL-related receipts from 1994, 1995, and
1996 that had never been applied to specific activities. Pursuant to
section 434 of the Higher Education Amendments of 1998, these funds will
be returned to the general fund of the Treasury.

Credit accounts:

Federal Direct Student Loan Program, Program Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct loan subsidy............... 218 70
00.05 Upward reestimates of subsidy..... 169
00.06 Interest on upward reestimate..... 64
--------- --------- ----------
00.91 Direct Program by Activities--
Subtotal (1 level)............ 451 70
07.09 Student loan administrative
expenses........................ 530 617 735
07.10 Y2K Actvities..................... 1
--------- --------- ----------
07.91 Direct Program by Activities--
Subtotal (1 level)............ 530 618 735
--------- --------- ----------
10.00 Total new obligations........... 981 688 735
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 2 4 4
22.00 New budget authority (gross)...... 983 689 735
22.10 Resources available from
recoveries of prior year
obligations..................... 18
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,003 693 739
23.95 Total new obligations............. -981 -688 -735
23.98 Unobligated balance expiring...... -18
24.40 Unobligated balance available, end
of year......................... 4 4 4
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

42.00 Transferred from other accounts. 1
Permanent:

60.00 Appropriation................... 507 618 735
60.05 Appropriation (indefinite)...... 390
--------- --------- ----------
63.00 Appropriation (total)......... 897 618 735
Spending authority from
offsetting collections:
68.00 Offsetting collections (cash). 86 361 651
68.27 Capital transfer to general
fund........................ -291 -651
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)................... 86 70
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 983 689 735
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 322 323 306
73.10 Total new obligations............. 981 688 735
73.20 Total outlays (gross)............. -962 -703 -703
73.45 Adjustments in unexpired accounts. -18
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 323 306 338
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1
86.97 Outlays from new permanent
authority....................... 699 468 467
86.98 Outlays from permanent balances... 263 235 237
--------- --------- ----------
87.00 Total outlays (gross)........... 962 703 703
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -86 -361 -651
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 897 328 84
90.00 Outlays........................... 876 342 52
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

1998 actual 1999 est. 2000 est.
Enacted/requested:
Budget Authority.................. 897 328 84
Outlays........................... 876 343 53
Legislative proposal, subject to
PAYGO:
Budget Authority.................. 98 15
Outlays........................... 96 15
Legislative proposal, discretionary
offset:
Budget Authority.................. -110
Outlays........................... -110
------------------------------------
Total:
Budget Authority.................. 897 426 -11
Outlays........................... 876 439 -42
====================================

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

----------------------------------------------------------------------------
Identification code 91-0243-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Direct loan levels supportable by subsidy
budget authority:
1150 Stafford.......................... 6,192 6,872 7,151
1150 Unsubsidized Stafford............. 3,904 4,396 4,743
1150 PLUS.............................. 1,175 1,557 1,747
1150 Consolidated...................... 2,589 4,947 2,699
--------- --------- ----------
1159 Total direct loan levels........ 13,860 17,772 16,340
Direct loan subsidy (in percent):
1320 Stafford.......................... 13.12 9.19 4.06
1320 Unsubsidized Stafford............. -9.22 -9.65 -16.38
1320 PLUS.............................. -9.26 -8.95 -13.41
1320 Consolidated...................... -4.88 0.04 -7.72
--------- --------- ----------
1329 Weighted average subsidy rate... 1.57 0.39 -5.69
Direct loan subsidy budget authority:
1330 Stafford.......................... 813 632 189
1330 Unsubsidized Stafford............. -360 -424 -503
1330 PLUS.............................. -109 -139 -132
1330 Consolidated...................... -126 2 -205
1330 Reestimates of subsidy............ 173 -361
--------- --------- ----------
1339 Total subsidy budget authority.. 391 -290 -651
Direct loan subsidy outlays:
1340 Stafford.......................... 813 607 348
1340 Unsubsidized Stafford............. -338 -359 -604
1340 PLUS.............................. -90 -102 -166
1340 Consolidated...................... -114 -2 -205
1340 Reestimates of subsidy............ 173 -361
--------- --------- ----------
1349 Total subsidy outlays........... 444 -217 -627
----------------------------------------------------------------------------

Student loan administrative expense data:
3510 Budget authority.................. 507 618 735
3590 Outlays........................... 432 559 679
---------------------------------------------------------------------------

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 2000
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 1998, the FFEL program has
provided over $260 billion in loans to postsecondary students and their
parents. Since July 1, 1994, the Direct Loan program has provided almost
$45 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 1999. Because funding for these two programs

[[Page 364]]

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 collection
of some defaulted loans, default avoidance activities, and counseling to
schools, students, and 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 Higher Education Amendments of 1998 (HEA) fundamentally
restructured the guaranty agency system, reducing the need for agencies
to hold Federal reserve funds. Accordingly, the President is proposing
to bring forward $165 million in reserve recalls included in the HEA. In
addition, the President is proposing $1.6 billion in new recalls over
2000-2004. (Amounts recalled in 2000 will be used to offset
discretionary spending.) To provide guaranty agencies the maximum
flexibility under this new structure, the President is also proposing to
allow the Secretary of Education to expand the use of voluntary flexible
agreements. These agreements, a limited number of which were authorized
in the HEA, afford agencies greater discretion in their financial and
operational organization.

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 income-contingent repayment options that allow borrowers to
consider lower-paying careers, such as public service, without fear of
default.

The Direct Loan program began operation in academic year 1994-1995
with 7 percent of overall loan volume. The program grew to 31 percent of
overall volume in academic year 1995-1996, and is expected to account
for 33 percent in academic year 1998-1999. 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.

As a result of the HEA, the borrower interest rate for new Stafford
Loans equals the 91-day Treasury bill rate plus 1.7 percent during in-
school, grace, and deferment periods, and the 91-day Treasury bill plus
2.3 percent at all other times, with a cap of 8.25 percent, 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 borrower interest
rate as Stafford loans, but have no interest subsidy. For new PLUS
loans, the borrower interest rate equals the 91-day Treasury bill rate
plus 3.1 percent, with a cap of 9 percent and no interest subsidy.

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 new 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 2.8 percent--or 2.2 percent during in-school, grace, or deferment
periods--is higher than the current interest rate charged borrowers.

The Administration is proposing to reduce interest subsidy payments
to 20 basis points on FFEL loans funded through tax-exempt securities.
This reduction will bring lender returns on these loans in line with
those realized on loans funded with private capital.

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.
As a result of the HEA, the interest rate for new FFEL Consolidation
loans equals the weighted average of the interest rate on the loans
consolidated, rounded up to the nearest one-eighth of one percent.
Lenders may choose to offer a lower rate.

The interest rate for new Direct Consolidation Loans for which
applications are received prior to February 1, 1999, equals the 91-day
Treasury bill plus 2.3 percent. The rate for Direct Consolidation Loans
for which applications are received after January 30, equals the
weighted average of the interest rate on the loans consolidated, rounded
up to the nearest one-eighth of one percent. Interest rates for all new
FFEL and Direct Consolidation Loans are capped at 8.25 percent.

The Administration is proposing to extend the temporary
Consolidation Loan policies included in the recent Higher Education
Amendments of 1998 (HEA) through the end of 2000, producing significant
savings for students while encouraging competition between the Direct
Loan and Federal Family Education Loan programs. The proposal would also
maintain the FFEL Consolidated Loan holder fee at 0.62 percent of
outstanding volume, rather increase the fee to 1.05 percent on February
1, 1999, as required under the HEA. (The fee would increase to 1.05
percent as of October 1, 2000.)

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 origination fee for Stafford Loan borrowers.

Loan limits are also identical across the two programs. In addition,
loans made under both programs are discharged when borrowers die, are
totally and permanently disabled, or, under some circumstances, declare
bankruptcy. The HEA limited discharges due to bankruptcy to borrowers
who can demonstrate that repayment would constitute an ``undue
hardship.''

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).

FFEL borrowers may choose from among four repayment plans. Repayment
periods under standard, graduated, and income-sensitive repayment may
not exceed 10 years. The

[[Page 365]]

HEA created an extended repayment plan of up to 25 years for new
borrowers with outstanding loans totalling more than $30,000. FFEL
borrowers may change repayment plans annually.

The President is proposing a number of changes to improve the
management and collection of defaulted loans which build on provisions
enacted in the HEA. The amount guaranty agencies may retain on default
collections will be reduced from 24 percent to 18.5 percent--
approximately the rate paid on loans collected by the Department of
Education through competitively awarded contracts. (The HEA lowered the
guaranty agency retention rate from 27 percent to 24 percent through
fiscal year 2003, and to 23 percent thereafter.) Second, the HEA lowered
the amount guaranty agencies are reimbursed for most defaulted loans
from 98 percent to 95 percent of outstanding principal and accrued
interest. The President is proposing to create true risk-sharing by
eliminating provisions that allow agencies to recoup this 5 percent cost
from subsequent default collections.

Third, the HEA extended the time before lenders may submit a default
claim on a delinquent loan by 90 days--from 180 days to 270 days. In
order to promote risk-sharing and increase lenders' incentive to bring
these loans back into repayment, the President is proposing that
interest not continue to accrue during this additional 90-day period.

Lastly, data from the Department of Health and Human Services'
National Directory of New Hires will be made available to assist in the
Department of Education's default collection efforts.

This proposal will increase collections by enhancing the
Department's ability to locate and garnish the wages of borrowers in
default. Savings from this proposal will be used as an offset to
discretionary spending.

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 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)

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Budget Authority:
FFEL:
Liquidating \1\....................... 550,973 -411,421 -665,069
Program \2\........................... 2,054,499 3,397,638 3,250,195
Reestimate of Prior Year Costs........ -- -687,572 --
Non-Contractual Modifications \3\..... -- -- -539,522
--------- --------- ----------
Subtotal, FFEL \2\.................. 2,605,422 2,298,645 2,045,604
Direct Loans:
Program \2\........................... 217,551 67,956 -447,678
Reestimate of Prior Year Costs........ 229,613 -552,730 --
Non-Contractual Modifications \3\..... -- -- -108,000
--------- --------- ----------
Subtotal, Direct Loans \2\.......... 447,164 -484,774 -555,678
Consolidation Loans:
FFEL.................................. -73,208 127,674 116,786
Reestimate of Prior Year Costs........ -- 534,438 --
Non-Contractual Modifications \3\..... -- -- -51,918
Direct Loans.......................... -126,382 99,923 -189,646
Reestimate of Prior Year Costs........ -56,921 191,850 --
Non-Contractual Modifications \3\..... -- -- --
--------- --------- ----------
Subtotal, Consolidation Loans....... -256,510 953,885 -124,778
Administration:
FFEL \4\.............................. 46,371 47,276 48,000
Student Aid \5\....................... 532,000 617,531 735,000
--------- --------- ----------
Subtotal, Administration............ 578,371 617,531 783,000
Total, FFEL and Direct Loans........ 3,374,447 3,432,563 2,148,148
Outlays:
FFEL:
Liquidating \1\....................... -117,527 213,055 -626,817
Program \2\........................... 2,351,721 2,800,813 2,948,393
Reestimate of Prior Year Costs \2\.... -- -687,572 --
Non-Contractual Modifications \3\..... -- -- -539,522
--------- --------- ----------
Subtotal, FFEL \2\.................. 2,234,194 2,326,296 1,782,054
Direct Loans:
Program \2\........................... 217,403 145,909 -423,569
Reestimate of Prior Year Costs \2\.... 229,613 -552,730 --
Non-Contractual modification.......... -- -- 108,000
--------- --------- ----------
Subtotal, Direct Loans \2\.......... 501,016 -406,821 -315,569
Consolidation Loans:
FFEL.................................. -104,355 158,622 116,603
Reestimate of Prior Year Costs........ -- 534,438 --
Non-Contractual Modifications \3\..... -- -- -51,918
Direct Loans.......................... -114,401 94,225 -189,646
Reestimate of Prior Year Costs........ -56,921 191,850 --
Non-Contractual Modifications \3\..... -- -- --
--------- --------- ----------
Subtotal, Consolidation Loans....... -275,676 979,135 -124,961
Administration:
FFEL \4\.............................. 37,811 46,742 51,310
Student Aid \5\....................... 456,167 559,524 679,347
--------- --------- ----------
Subtotal, Administration............ 493,978 606,266 730,657
Total, FFEL and Direct Loans........ 2,953,512 3,504,876 2,072,181
---------------------------------------------------------------------------
\1\ Liquidating account reflects loans made prior to 1992.
\2\ Account-specific totals are derived by combining program and
consolidation loan totals.
\3\ Reflect costs and savings associated with policy changes that do not
change the terms of existing or future loans.
\4\ Reflects annual discretionary appropriation. Amount for 1999
reflects transfer from Treasury of $794,000 for Year 2000-related
activities.
\5\ Supports account maintenance fee 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. Amount for 1998 reflects transfer of $25
million from Higher Education Assistance Foundation Account. Amount for 1999
reflects transfer from Treasury of $531,000 for Year 2000-related
activities.

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

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
FFEL:
Stafford.............................. 10,762 10,905 11,344
Unsubsidized Stafford................. 7,292 7,858 8,477
PLUS.................................. 1,949 2,158 2,422
--------- --------- ----------
Total, FFEL......................... 20,003 20,921 22,243
Direct Loans:
Stafford.............................. 5,842 6,210 6,463
Unsubsidized Stafford................. 3,501 3,896 4,204
PLUS.................................. 1,057 1,257 1,411
--------- --------- ----------
Total, Direct Loans................. 10,400 11,363 12,078
Consolidation Loans:
FFEL.................................. 3,234 2,656 2,763
Direct Loans.......................... 2,431 4,869 4,077
--------- --------- ----------
Subtotal, Consolidation Loans....... 5,665 7,525 6,840
Total, All Loans.................... 36,067 39,809 41,161
---------------------------------------------------------------------------
\1\ Net commitments equal gross commitments minus loan cancellations.

Number of Loans (In thousands)

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
FFEL:
Stafford.............................. 3,169 3,227 3,329
Unsubsidized Stafford................. 1,904 2,068 2,189
PLUS.................................. 305 331 361
--------- --------- ----------
Total, FFEL......................... 5,378 5,627 5,878
Direct Loans:
Stafford.............................. 1,787 1,840 1,898

[[Page 366]]

Unsubsidized Stafford................. 1,059 1,092 1,157
PLUS.................................. 171 191 208
--------- --------- ----------
Total, Direct Loans................. 3,018 3,122 3,263
Consolidation Loans:
FFEL.................................. 194 168 173
Direct Loans.......................... 107 194 167
--------- --------- ----------
Subtotal, Consolidation Loans....... 301 362 340
Total, All Loans.................... 8,696 9,110 9,481
---------------------------------------------------------------------------

Average Loan Size (in whole dollars)

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
FFEL:
Stafford.............................. 3,396 3,379 3,408
Unsubsidized Stafford................. 3,830 3,799 3,873
PLUS.................................. 6,395 6,514 6,710
--------- --------- ----------
Weighted Average, FFEL.............. 3,720 3,718 3,784
Direct Loans:
Stafford.............................. 3,269 3,376 3,405
Unsubsidized Stafford................. 3,306 3,568 3,634
PLUS.................................. 6,174 6,593 6,791
--------- --------- ----------
Weighted Average, Direct Loans...... 3,447 3,640 3,702
Consolidation Loans:
FFEL.................................. 16,643 15,827 15,964
Direct Loans.......................... 22,772 25,116 24,427
--------- --------- ----------
Subtotal, Consolidation Loans....... 18,816 20,806 20,118
Weighted Average, All Loans......... 4,147 4,370 4,341
---------------------------------------------------------------------------

Composition of Consolidation Loans

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Net commitments (in millions of
dollars):
FFEL:
Standard consolidations............... 2,790 2,291 2,383
Consolidations from Default........... 444 365 380
--------- --------- ----------
Subtotal, FFEL...................... 3,234 2,656 2,763
Direct Loans:
Standard consolidations............... 1,886 4,257 3,440
Consolidations from Default........... 545 612 636
--------- --------- ----------
Subtotal, Direct Loans.............. 2,431 4,869 4,077
Total:
Standard consolidations............... 5,195 7,744 7,115
Consolidations from Default........... 1,072 1,168 1,222
--------- --------- ----------
Total, Consolidated Loans........... 5,665 7,525 6,840
---------------------------------------------------------------------------

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

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Subsidy Rates (in percent) \1\
FFEL:
Stafford.............................. 20.25 21.02 19.70
Unsubsidized Stafford................. 5.73 7.80 6.21
PLUS.................................. 5.18 6.05 5.93
--------- --------- ----------
Weighted Average, FFEL \2\.......... 13.42 14.44 12.99
Direct Loans:
Stafford.............................. 9.99 10.14 5.83
Unsubsidized Stafford................. (10.13) (8.70) (14.15)
PLUS.................................. (6.87) (6.78) (10.45)
--------- --------- ----------
Weighted Average, Direct Loans \2\.. 1.33 1.63 (3.20)
Consolidation Loans:
FFEL.................................. 2.91 4.80 4.22
Direct Loans.......................... 3.29 6.75 2.89
--------- --------- ----------
Weighted Average, Consolidation
Loans............................. 3.07 6.07 3.42
Default Rates (in percent) \3\
FFEL:
Stafford.............................. 16.64 15.99 15.69
Unsubsidized Stafford................. 15.66 15.53 15.23
PLUS.................................. 9.81 9.80 9.63
--------- --------- ----------
Weighted Average, FFEL \2\.......... 15.62 15.18 14.85
Direct Loans:
Stafford.............................. 16.05 16.46 16.16
Unsubsidized Stafford................. 15.81 16.21 15.91
PLUS.................................. 9.33 9.55 9.56
--------- --------- ----------
Weighted Average, Direct Loans \2\.. 15.29 15.61 15.30
Consolidation Loans:
FFEL.................................. 22.11 22.02 21.96
Direct Loans.......................... 22.11 22.02 21.96
--------- --------- ----------
Weighted Average, Consolidation
Loans............................. 22.11 22.02 21.96
Borrower Interest Rates (in percent)
FFEL:
Stafford \4\.......................... 8.25 7.46 6.71
Unsubsidized Stafford \4\............. 8.25 7.46 6.71
PLUS \4\.............................. 8.98 8.26 7.51
Direct Loans:
Stafford \4\.......................... 8.25 7.46 6.71
Unsubsidized Stafford \4\............. 8.25 7.46 6.71
PLUS \4\.............................. 8.98 8.26 7.51
Consolidation Loans:
FFEL\5\............................... -- -- --
Direct Loans \5\...................... -- -- --
Federal Borrowing Rate for Direct Loans
(in percent)........................ 5.85 6.03 5.01
---------------------------------------------------------------------------
\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. For comparative purposes, the
subsidy rates shown for Direct Loans reflect only the standard repayment
option.
\2\ Account-specific totals are derived by combining program and
consolidation loan totals.
\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 three years of repayment to determine institutional eligibility to
participate in Federal loan programs. These three-year rates tend to be
lower than those included in this table.
\4\ Rates shown are those set beginning July 1st of the previous fiscal
year.
\5\ Interest rates under the FFEL Consolidation Loan program reflect a
weighted average of the rates of the loans consolidated, rounded up to the
nearest eighth of a percent. For Direct Loan Consolidation Loans, interest
rates reflect the 91-day Treasury bill rate plus 2.3 percent.

Composition of Loan Collections (In thousands of dollars)

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
FFEL:
Collections by Guaranty Agencies \1\.. 1,154,544 1,355,582 1,401,324
Collections by Department of Education 427,824 422,537 430,809
Internal Revenue Service Tax Refund
Offsets............................. 598,085 552,975 560,156
--------- --------- ----------
Total, FFEL \2\................... 2,180,453 2,331,095 2,392,288
Direct Loans:
Collections by Department of Education 10,270 76,822 149,461
Internal Revenue Service Tax Refund
Offsets............................. 4,558 10,976 24,997
--------- --------- ----------
Total, Direct Loans \2\............. 14,828 87,798 174,458
Total, FFEL and Direct Loan......... 2,195,281 2,418,893 2,566,747
---------------------------------------------------------------------------
\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 percent)

----------------------------------------------------------------------------
1998 cohort 1999 cohort 2000 cohort
----------------------------------------------------------------------------
Direct Loans \1\
Standard:
Percent of Loan Volume: \2\
Stafford.......................... 83.08 78.97 75.06
Unsubsidized Stafford............. 79.24 74.75 70.52
PLUS.............................. 76.90 76.90 76.90
Consolidation..................... 25.26 25.26 25.26
Subsidy Rate (in percent):
Stafford.......................... 9.99 10.14 5.83
Unsubsidized Stafford............. -10.13 -8.70 -14.15
PLUS.............................. -6.87 -6.78 -10.45
Consolidation..................... 3.29 6.75 2.89
Graduated: \3\
Percent of Loan Volume: \2\
Stafford.......................... 12.10 15.24 18.22
Unsubsidized Stafford............. 14.31 17.61 20.71
PLUS.............................. 16.77 16.77 16.77
Consolidation..................... 23.44 23.44 23.44
Subsidy Rate (in percent):
Stafford.......................... 5.65 6.12 -0.99
Unsubsidized Stafford............. -15.61 -13.51 -22.47

[[Page 367]]

PLUS.............................. -15.10 -15.64 -23.10
Consolidation..................... -3.49 2.63 -5.23
Extended: \3\
Percent of Loan Volume: \2\
Stafford.......................... 3.74 4.71 5.63
Unsubsidized Stafford............. 5.22 6.42 7.55
PLUS.............................. 6.32 6.32 6.32
Consolidation..................... 20.22 20.22 20.22
Subsidy Rate (in percent):
Stafford.......................... 5.71 6.10 -0.99
Unsubsidized Stafford............. -15.51 -13.41 -22.44
PLUS.............................. -15.18 -15.72 -23.35
Consolidation..................... -3.26 2.68 -5.10
Income-Contingent:
Percent of Loan Volume: \2\
Stafford.......................... 1.08 1.08 1.08
Unsubsidized Stafford............. 1.22 1.22 1.22
Consolidation..................... 31.08 31.08 31.08
Subsidy Rate (in percent):
Stafford.......................... 4.25 2.71 -4.15
Unsubsidized Stafford............. 4.16 2.76 -4.20
Consolidation..................... -3.58 -3.21 -10.98
---------------------------------------------------------------------------
\1\ No data is included for the Alternative repayment plan. Borrowers
are not expected to participate in this plan due to the flexibility
available under the other options. 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
Direct
Extended and
Graduated
Plans
(Stafford)
FY 1999

Below $10,000........ 12 12.65
$10,000-$20,000...... 15 22.89
$20,000-$40,000...... 20 31.97
$40,000-$60,000...... 25 15.81
Above $60,000........ 30 16.68

The Higher Education Amendments of 1998 broadened the availability
of alternative repayment plans in the FFEL program. Data on the extent
to which FFEL borrowers will take advantage of these plans is not yet
available.

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 2000 Budget. These factors
substantially decrease subsidy rates across years in the FFEL program.

FFEL RISK CATEGORIES: STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 24.62 25.56 24.39
Category 2: 4 year college, 3rd
and 4th year students........... 16.91 18.08 16.96
Category 3: 2 year college, all
students........................ 20.76 21.56 19.84
Category 4: Proprietary school,
all students.................... 23.00 23.55 21.54
Category 5: Graduate students..... 18.91 20.14 19.32

Gross Default Rates (in percent)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 19.58 19.56 19.23
Category 2: 4 year college, 3rd
and 4th year students........... 13.14 13.16 12.92
Category 3: 2 year college, all
students........................ 32.70 32.66 32.07
Category 4: Proprietary school,
all students.................... 49.13 49.21 48.29
Category 5: Graduate students..... 8.83 8.84 8.69

UNSUBSIDIZED STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 5.99 8.52 6.94
Category 2: 4 year college, 3rd
and 4th year students........... 3.58 5.99 4.68
Category 3: 2 year college, all
students........................ 9.83 11.76 9.94
Category 4: Proprietary school,
all students.................... 15.48 16.81 14.64
Category 5: Graduate students..... 3.61 6.15 5.05

Gross Default Rates (in percent)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 19.07 19.11 18.79
Category 2: 4 year college, 3rd
and 4th year students........... 13.06 13.09 12.87
Category 3: 2 year college, all
students........................ 32.06 32.09 31.51
Category 4: Proprietary school,
all students.................... 47.96 48.16 47.30
Category 5: Graduate students..... 8.71 8.73 8.58

PLUS LOANS

Subsidy Rate (as a percentage of loan commitments)

1998 actual 1999 est. 2000 est.
All PLUS Loans.................... 5.18 6.05 5.93

Gross Default Rates (in percent)

All PLUS Loans.................... 9.81 9.80 9.63

DIRECT LOAN RISK CATEGORIES: STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 14.30 14.27 9.72
Category 2: 4 year college, 3rd
and 4th year students........... 7.28 7.23 2.94
Category 3: 2 year college, all
students........................ 11.53 12.21 7.65
Category 4: Proprietary school,
all students.................... 16.16 17.21 13.21
Category 5: Graduate students..... 9.26 9.08 4.95

Gross Default Rates (in percent)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 19.89 20.14 19.80
Category 2: 4 year college, 3rd
and 4th year students........... 13.10 13.15 12.92
Category 3: 2 year college, all
students........................ 33.01 33.25 32.64
Category 4: Proprietary school,
all students.................... 49.16 49.44 48.52
Category 5: Graduate students..... 8.81 8.82 8.66

UNSUBSIDIZED STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... -9.48 -7.78 -14.01
Category 2: 4 year college, 3rd
and 4th year students........... -11.66 -10.37 -15.71
Category 3: 2 year college, all
students........................ -6.34 -4.09 -9.58
Category 4: Proprietary school,
all students.................... 0.37 3.26 -1.71
Category 5: Graduate students..... -11.06 -10.29 -15.55

Gross Default Rates (in percent)

1998 actual 1999 est. 2000 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 20.02 20.26 19.92

[[Page 368]]

Category 2: 4 year college, 3rd
and 4th year students........... 13.01 13.05 12.82
Category 3: 2 year college, all
students........................ 31.10 32.53 31.95
Category 4: Proprietary school,
all students.................... 48.01 48.33 47.47
Category 5: Graduate students..... 8.70 8.71 8.56

PLUS LOANS

Subsidy Rate (as a percentage of loan commitments)

1998 actual 1999 est. 2000 est.
All PLUS Loans.................... -6.87 -6.78 -10.45

Gross Default Rates (in percent)

All PLUS Loans.................... 9.33 9.55 9.56

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

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Interest costs:
Interest benefits:
FFEL Liquidating...................... 98,311 8,105 1,960
FFEL Program.......................... 3,099,000 1,947,809 1,785,488
Direct Loans \1\...................... 817,352 900,569 912,983
--------- --------- ----------
4,014,663 2,856,483 2,700,431
Special allowance:
FFEL Liquidating...................... 321,979 293,716 211,759
FFEL Program.......................... 320,000 237,779 378,190
--------- --------- ----------
641,979 531,494 589,949
Default costs and offsets:
Default costs \2\:
FFEL Liquidating...................... 356,943 261,507 166,399
FFEL Program.......................... 1,699,000 2,979,425 3,247,440
Direct Loans.......................... 76,490 184,555 348,906
--------- --------- ----------
2,132,433 3,425,486 3,762,744
Gross default collections:
FFEL Liquidating...................... 898,676 1,315,627 1,092,054
FFEL Program.......................... 1,281,777 1,015,468 1,300,234
Direct Loans.......................... 14,828 87,798 174,458
--------- --------- ----------
2,195,281 2,418,893 2,566,747
Default collection costs:
FFEL Liquidating:
Contract collection costs........... 95,612 46,467 42,785
Guaranty agency retention........... 107,918 139,983 88,075
--------- --------- ----------
203,530 186,450 130,860
FFEL Program:
Contract collection costs........... 8,000 11,499 19,805
Guaranty agency retention........... 180,777 172,381 171,170
--------- --------- ----------
188,777 183,880 190,975
Direct Loans:
Collection costs \3\................ 1,129 254 847
Net default costs:\4\
FFEL Liquidating.................. (338,203) (867,670) (794,795)
FFEL Program...................... 606,000 2,147,838 2,138,180
Direct Loans...................... 62,790 97,010 175,295
--------- --------- ----------
330,587 1,377,178 1,518,680
Death, disability, and bankruptcy
costs:
FFEL Liquidating.................... 43,618 37,656 26,825
FFEL Program........................ 243,000 223,169 252,586
Direct Loans........................ 28,419 54,989 80,629
--------- --------- ----------
315,037 315,814 360,039
Administrative Costs:
Federal administration:
FFEL.................................. 46,371 47,276 48,000
Student Aid Management \7\............ 529,970 617,531 735,000
Guaranty agency administrative payments:
Account Maintenance Fee............... 170,000 177,000 180,000
Loan Issuance and Processing Fee...... -- 152,895 162,580
Supplemental preclaims assistance \5\. 91,463 -- --
Lender-paid default prevention fee.... -- -- --
Fees:
Borrower origination fees:
FFEL................................ 924,000 626,833 665,449
Direct Loans........................ 381,968 447,010 475,044
Lender origination fee \5\............ 154,000 104,472 110,908
Sallie Mae offset fee \5\............. 102,000 27,300 20,900
Consolidation loan holder fees \5\.... 233,000 165,621 169,877
---------------------------------------------------------------------------
\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\ Amount for 1999 reflects transfer from Treasury of $794,000 for Year
2000-related activities.
\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, account maintenance fee payments to guaranty agencies, is
shown as a separate line. Amount for 1998 reflects transfer of $25 million
from the Higher Education Assistance Foundation Account. Amount for FY 1999
includes transfer from Treasury of $531,000 for Year 2000-related
activities.

Object Classification (in millions of dollars)

Personnel compensation:

11.1 Full-time permanent............. 28 32 34
11.3 Other than full-time permanent.. 1 1 1
--------- --------- ----------
11.9 Total personnel compensation.. 29 33 35
12.1 Civilian personnel benefits....... 6 7 8
21.0 Travel and transportation of
persons......................... 3 4 3
23.1 Rental payments to GSA............ 5 5 6
23.3 Communications, utilities, and
miscellaneous charges........... 30 36 40
24.0 Printing and reproduction......... 6 7 9
25.1 Advisory and assistance services.. 1 1
25.2 Other services.................... 6 10 8
25.3 Purchases of goods and services
from Government accounts........ 6 2 3
25.7 Operation and maintenance of
equipment....................... 265 334 438
26.0 Supplies and materials............ 1 1 1
31.0 Equipment......................... 2 1 3
32.0 Land and structures............... 1
41.0 Grants, subsidies, and
contributions................... 621 247 180
--------- --------- ----------
99.9 Total new obligations........... 981 688 735
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0243-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 517 571 571
---------------------------------------------------------------------------

Federal Direct Student Loan Program, Program Account

(Legislative proposal, subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
02.01 Direct loan subsidy............... 98
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 98
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 98
23.95 Total new obligations............. -98
----------------------------------------------------------------------------

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

68.00 Offsetting collections (cash)... -15
68.27 Capital transfer to general fund 98 15
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 98
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 1
73.10 Total new obligations............. 98
73.20 Total outlays (gross)............. -96
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 96
----------------------------------------------------------------------------

[[Page 369]]

Offsets:
Against gross budget authority and outlays:

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

Net budget authority and outlays:
89.00 Budget authority.................. 98 15
90.00 Outlays........................... 96 15
---------------------------------------------------------------------------

The Administration will propose legislation to extend the temporary
consolidation loan policies included in the HEA through 2000.

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

----------------------------------------------------------------------------
Identification code 91-0243-4-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Direct loan levels supportable by subsidy
budget authority:
1150 Consolidated...................... 1,443
--------- --------- ----------
1159 Total direct loan levels........ 1,443
Direct loan subsidy (in percent):
1320 Consolidated...................... 1.98 3.07
--------- --------- ----------
1329 Weighted average subsidy rate... 0.55 0.53
Direct loan subsidy budget authority:
1330 Consolidated...................... 98 16
1330 Non-contractual modifications.....
--------- --------- ----------
1339 Total subsidy budget authority.. 98 16
Direct loan subsidy outlays:
1340 Consolidated...................... 96
--------- --------- ----------
1349 Total subsidy outlays........... 96
---------------------------------------------------------------------------

Federal Direct Student Loan Program, Program Account

(Legislative proposal, discretionary offset)

Program and Financing (in millions of dollars)

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

68.00 Offsetting collections (cash)... 110
68.27 Capital transfer to general fund -110
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total).....................
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -110
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -110
90.00 Outlays........................... -110
---------------------------------------------------------------------------

The Administration will propose legislation to improve the
collection of defaulted student loans. Data from the National Directory
of New Hires will be made available to assist the Department of
Education's default collection efforts and will apply the offset to
discretionary spending.

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

----------------------------------------------------------------------------
Identification code 91-0243-6-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Direct loan subsidy budget authority:
1330 Stafford.......................... -2
1330 Unsubsidized Stafford............. -1
1330 Non-contractual modifications..... -108
--------- --------- ----------
1339 Total subsidy budget authority.. -111
Direct loan subsidy outlays:
1340 Stafford.......................... -1
1340 Unsubsidized Stafford............. -1
1340 Non-contractual modifications..... -108
--------- --------- ----------
1349 Total subsidy outlays........... -110
---------------------------------------------------------------------------

Federal Direct Student Loan Program, Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
Direct loans:

01.01 Stafford........................ 6,191 6,872 7,151
01.02 Unsubsidized Stafford........... 3,905 4,396 4,743
01.03 PLUS............................ 1,175 1,557 1,747
01.04 Consolidated.................... 2,589 4,947 2,699
--------- --------- ----------
01.91 Subtotal, direct loans
obligations................. 13,860 17,772 16,340
Payment for consolidations:

02.04 Consolidated.................... 13 22 14
Payment of contract collection costs:

03.01 Stafford........................ 1
04.01 Interest payment to Treasury...... 2,320 2,379 3,213
08.01 Payment of negative subsidy to
program account................. 651
08.02 Payment of downward reestimate to
program account................. 61 361
--------- --------- ----------
08.91 Direct Program by Activities--
Subtotal (1 level)............ 61 361 651
--------- --------- ----------
10.00 Total new obligations........... 16,255 20,534 20,218
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New financing authority (gross)... 16,238 20,535 20,219
22.10 Resources available from
recoveries of prior year
obligations..................... 18
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 16,256 20,535 20,219
23.95 Total new obligations............. -16,255 -20,534 -20,218
----------------------------------------------------------------------------

New financing authority (gross), detail:
67.15 Authority to borrow (indefinite).. 13,703 18,048 17,185
Spending authority from offsetting
collections:

68.00 Offsetting collections (cash)... 3,889 3,629 4,966
68.10 From Federal sources: Change in
receivables and unpaid,
unfilled orders............... -72 -59 -194
68.47 Portion applied to debt
reduction..................... -1,282 -1,083 -1,738
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 2,535 2,487 3,034
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 16,238 20,535 20,219
----------------------------------------------------------------------------

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

72.40 Obligated balance, start of year 3,872 5,396 3,549
72.95 Receivables from program account 160 88 29
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 4,032 5,484 3,578
73.10 Total new obligations............. 16,255 20,534 20,218
73.20 Total financing disbursements
(gross)......................... -14,785 -22,441 -19,988
73.45 Adjustments in unexpired accounts. -18
Unpaid obligations, end of year:

74.40 Obligated balance, end of year.. 5,396 3,549 3,973
74.95 Receivables from program account 88 29 -165
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 5,484 3,578 3,808
87.00 Total financing disbursements
(gross)......................... 14,785 22,441 19,988
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

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

88.00 Stafford.................. -814 -607
88.00 Unsubsidized Stafford..... 338 359
88.00 PLUS...................... 90 102
88.00 Consolidated.............. 114 2
88.00 Upward reestimate......... -233
88.25 Interest on uninvested funds.. -634
Non-Federal sources:
Stafford loans:

88.40 Repayment of principal,
Stafford................ -838 -554 -895
88.40 Interest received on
loans, Stafford......... -165 -598 -827
88.40 Fees, Stafford............ -216 -246 -256
88.40 Repayment of principal,
Unsubsidized Stafford... -459 -325 -552

[[Page 370]]

Unsubsidized Stafford loans:

88.40 Interest received on
loans, Unsubsidized
Stafford................ -154 -363 -531
88.40 Fees, Unsubsidized
Stafford................ -130 -152 -165
88.40 Repayment of principal,
PLUS.................... -272 -162 -236
88.40 Interest received on
loans, PLUS............. -145 -246 -305
PLUS loans:

88.40 Fees, PLUS................ -36 -48 -55
88.40 Payment of principal,
Consolidated............ -188 -273 -432
88.40 Interest received on
loans, Consolidated..... -147 -518 -712
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -3,889 -3,629 -4,966
88.95 Change in receivables from program
accounts........................ 72 59 194
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 12,421 16,965 15,447
90.00 Financing disbursements........... 10,894 18,812 15,022
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4253-0-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
STAFFORD
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 6,192 6,953 7,236
--------- --------- ----------
1150 Total direct loan obligations... 6,192 6,953 7,236
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 11,443 15,988 21,545
1231 Disbursements: Direct loan
disbursements................... 5,448 6,156 6,392
1251 Repayments: Repayments and
prepayments..................... -837 -576 -928
1261 Adjustments: Capitalized interest. 50
Write-offs for default:

1263 Direct loans.................... -1 -3
1264 Other adjustments, net.......... -116 -22 -32
--------- --------- ----------
1290 Outstanding, end of year........ 15,988 21,545 26,974
----------------------------------------------------------------------------

UNSUBSIDIZED STAFFORD
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 3,905 4,396 4,743
--------- --------- ----------
1150 Total direct loan obligations... 3,905 4,396 4,743
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 5,887 8,769 12,228
1231 Disbursements: Direct loan
disbursements................... 3,237 3,809 4,120
1251 Repayments: Repayments and
prepayments..................... -459 -337 -570
1261 Adjustments: Capitalized interest. 197
Write-offs for default:

1263 Direct loans.................... -1 -1
1264 Other adjustments, net.......... -93 -12 -18
--------- --------- ----------
1290 Outstanding, end of year........ 8,769 12,228 15,759
----------------------------------------------------------------------------

PLUS
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 1,175 1,557 1,747
--------- --------- ----------
1150 Total direct loan obligations... 1,175 1,557 1,747
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 1,539 2,180 3,200
1231 Disbursements: Direct loan
disbursements................... 915 1,210 1,364
1251 Repayments: Repayments and
prepayments..................... -272 -176 -257
1261 Adjustments: Capitalized interest. 13
Write-offs for default:

1263 Direct loans.................... -1
1264 Other adjustments, net.......... -15 -14 -20
--------- --------- ----------
1290 Outstanding, end of year........ 2,180 3,200 4,286
----------------------------------------------------------------------------

CONSOLIDATED
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 2,589 4,947 2,699
--------- --------- ----------
1150 Total direct loan obligations... 2,589 4,947 2,699
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 2,343 4,733 9,390
1231 Disbursements: Direct loan
disbursements................... 2,540 4,942 2,696
1251 Repayments: Repayments and
prepayments..................... -188 -279 -443
1261 Adjustments: Capitalized interest. 75
Write-offs for default:

1263 Direct loans.................... -1
1264 Other adjustments, net.......... -36 -6 -11
--------- --------- ----------
1290 Outstanding, end of year........ 4,733 9,390 11,632
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4253-0-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 4,032 5,396 3,549 3,973
Net value of assets related to
post-1991 direct loans
receivable:

Direct loans receivable, gross:
1401 Stafford...................... 11,443 15,988 21,544 26,974
1401 Unsubsidized Stafford......... 5,887 8,769 12,228 15,760
1401 PLUS.......................... 1,539 2,180 3,199 4,285
1401 Consolidated.................. 2,343 4,733 9,390 11,631
Interest receivable:
1402 Interest receivable, Stafford. 41 80 107 134
1402 Interest receivable, Unsub
Stafford.................... 239 462 644 830
1402 Interest receivable, PLUS..... 11 3 4 6
1402 Interest receivable,
Consolidated................ 46 77 153 190
1405 Allowance for subsidy cost (-).. -764 -1,575 -2,019 -1,857
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 20,785 30,717 45,250 57,953
------------ -------------- ------------ -------------
1999 Total assets.................... 24,817 36,113 48,799 61,926
LIABILITIES:
2103 Federal liabilities: Debt......... 22,713 35,097 52,063 67,509
------------ -------------- ------------ -------------
2999 Total liabilities............... 22,713 35,097 52,063 67,509
NET POSITION:
3100 Appropriated capital.............. 2,104 1,016 -3,263 -5,582
------------ -------------- ------------ -------------
3999 Total net position.............. 2,104 1,016 -3,263 -5,582
------------ -------------- ------------ -------------
4999 Total liabilities and net position 24,817 36,113 48,800 61,927
-----------------------------------------------------------------------------------------------

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

Federal Direct Student Loan Program, Financing Account

(Legislative proposal, subject to PAYGO)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4253-4-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
01.04 Consolidated...................... 1,443
Payment of consolidations:

03.04 Consolidated.................... 6
05.01 Interest Payments to Treasury..... -2 29
08.01 Payment of negative subsidy to
program account................. -15
--------- --------- ----------
10.00 Total new obligations........... -2 1,463
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New financing authority (gross)... -2 1,463
23.95 Total new obligations............. 2 -1,463
----------------------------------------------------------------------------

New financing authority (gross), detail:
67.15 Authority to borrow (indefinite).. -96 1,428
Spending authority from offsetting
collections:

68.00 Offsetting collections (cash)... 90 49

[[Page 371]]

68.47 Portion applied to debt
reduction..................... 4 -14
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 94 35
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... -2 1,463
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. -2 1,463
73.20 Total financing disbursements
(gross)......................... 2 -1,463
87.00 Total financing disbursements
(gross)......................... -2 1,463
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
88.00 Federal sources............... -96
Consolidated:
Non-Federal sources:

88.40 Payment of prinipcal...... -2 -28
88.40 Interest received on loans 8 -21
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -90 -49
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... -92 1,414
90.00 Financing disbursements........... -92 1,414
---------------------------------------------------------------------------

The Administration will propose legislation to extend the temporary
consolidation loan policies included in the HEA through 2000.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4253-4-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................
Net value of assets related to
post-1991 direct loans
receivable:

1401 Direct loans receivable, gross.. -2 1,412
1403 Accounts receivable from
foreclosed property........... 23
1405 Allowance for subsidy cost (-).. -164
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... -2 1,271
------------ -------------- ------------ -------------
1999 Total assets.................... -2 1,271
LIABILITIES:
2103 Federal liabilities: Debt......... -93 1,321
------------ -------------- ------------ -------------
2999 Total liabilities............... -93 1,321
NET POSITION:
3100 Appropriated capital.............. 91 -50
------------ -------------- ------------ -------------
3999 Total net position.............. 91 -50
------------ -------------- ------------ -------------
4999 Total liabilities and net position -2 1,271
-----------------------------------------------------------------------------------------------

Federal Direct Student Loan Program Financing Account

(Legislative proposal, discretionary offset)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4253-6-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
05.01 Interest payments to treasury..... 2
08.01 Payment of negative subsidy to
program account................. 2
08.05 Payment of non-contract
modifications to program account 108
--------- --------- ----------
08.91 Direct Program by Activities--
Subtotal (1 level)............ 110
--------- --------- ----------
10.00 Total new obligations........... 112
----------------------------------------------------------------------------

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

New financing authority (gross), detail:
67.15 Authority to borrow (indefinite).. 111
Spending authority from offsetting
collections:

68.00 Offsetting collections (cash)... 12
68.10 From Federal sources: Change in
receivables and unpaid,
unfilled orders............... -1
68.47 Portion applied to debt
reduction..................... -10
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 1
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 112
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 112
73.20 Total financing disbursements
(gross)......................... -112
Unpaid obligations, end of year:

74.40 Obligated balance, end of year.. 1
74.95 Receivables from program account -1
--------- --------- ----------
74.99 Total unpaid obligations, end
of year.....................
87.00 Total financing disbursements
(gross)......................... 112
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Payment of principal-
Stafford.................. -7
88.40 Payment of principal-
Unsubsidized Stafford..... -4
88.40 Payment of principal-PLUS... -1
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -12
88.95 Change in receivables from program
accounts........................ 1
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 101
90.00 Financing disbursements........... 100
---------------------------------------------------------------------------

The Administration will propose legislation to improve the
collection of defaulted student loans. Data from the National Directory
of New Hires will be made available to assist the Department of
Education's default collection efforts. The offset will be applied to
discretionary spending.

Status of Direct Loans (in millions of dollars)

1111 Limitation on direct loans......
--------- --------- ----------
1150 Total direct loan obligations.
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:

1210 Outstanding, start of year......
1251 Repayments: Repayments and
prepayments................... -7
--------- --------- ----------
1290 Outstanding, end of year...... -7
----------------------------------------------------------------------------

Unsubsidized Stafford
Cumulative balance of direct loans
outstanding:

1210 Outstanding, start of year......
1251 Repayments: Repayments and
prepayments................... -4
--------- --------- ----------
1290 Outstanding, end of year...... -4
----------------------------------------------------------------------------

PLUS
Cumulative balance of direct loans
outstanding:

1210 Outstanding, start of year......
1251 Repayments: Repayments and
prepayments................... -1
--------- --------- ----------
1290 Outstanding, end of year...... -1
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4253-6-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
Stafford
ASSETS:

1101 Federal assets: Fund balances
with Treasury................. 1
Net value of assets related to
post-1991 direct loans
receivable:
Direct loans receivable,
gross:
1401 Stafford.................... -7

[[Page 372]]

1401 Unsubsidized Stafford....... -4
1401 PLUS........................ -1
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans... -12
------------ -------------- ------------ -------------
1999 Total assets.................. -11
LIABILITIES:

2103 Federal liabilities: Debt....... 101
------------ -------------- ------------ -------------
2999 Total liabilities............. 101
NET POSITION:

3100 Appropriated capital............ -113
------------ -------------- ------------ -------------
3999 Total net position............ -112
------------ -------------- ------------ -------------
4999 Total liabilities and net
position...................... -12
-----------------------------------------------------------------------------------------------

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] $48,000,000. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)
Note.--The following tables display the program account which
includes the subsidy costs and administrative expenses associated with
guaranteed student loan commitments beginning in 1992.

Program and Financing (in millions of dollars)

Obligations by program activity:
Guaranteed loan subsidy:

02.01 Stafford........................ 1,964 2,554 2,685
02.02 Unsubsidized Stafford........... 161 695 759
02.03 PLUS............................ 3 149 174
02.05 Consolidated.................... -73 91 65
02.07 Upward reestimate............... 1,150
02.08 Interest on reestimate.......... 157
--------- --------- ----------
02.91 Subtotal, subsidy cost........ 2,055 4,796 3,683
Administrative expenses:

07.01 Administrative expenses due to
limitations................... 46 46 48
07.02 Y2K Activities.................. 1
--------- --------- ----------
07.91 Direct Program by Activities--
Subtotal (1 level).......... 46 47 48
--------- --------- ----------
10.00 Total new obligations........... 2,101 4,843 3,731
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 2,101 4,842 3,732
23.95 Total new obligations............. -2,101 -4,843 -3,731
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation (Federal
administration)............... 46 46 48
42.00 Transferred from other accounts. 1
--------- --------- ----------
43.00 Appropriation (total)......... 46 47 48
Permanent:

60.05 Appropriation (indefinite)...... 2,055 3,335 3,684
68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 1,460
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 2,101 4,842 3,732
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 1,148 859 1,426
73.10 Total new obligations............. 2,101 4,843 3,731
73.20 Total outlays (gross)............. -2,390 -4,276 -3,281
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 859 1,426 1,875
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 29 35 36
86.93 Outlays from current balances..... 9 12 15
86.97 Outlays from new permanent
authority....................... 1,228 3,402 2,200
86.98 Outlays from permanent balances... 1,124 827 1,031
--------- --------- ----------
87.00 Total outlays (gross)........... 2,390 4,276 3,281
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -1,460
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 2,101 3,382 3,732
90.00 Outlays........................... 2,390 2,816 3,281
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

1998 actual 1999 est. 2000 est.
Enacted/requested:
Budget Authority.................. 2,101 3,382 3,732
Outlays........................... 2,390 2,816 3,282
Legislative proposal, subject to
PAYGO:
Budget Authority.................. 37 -746
Outlays........................... 37 -597
Legislative proposal, discretionary
offset:
Budget Authority.................. -768
Outlays........................... -766
------------------------------------
Total:
Budget Authority.................. 2,101 3,419 2,218
Outlays........................... 2,390 2,853 1,919
====================================

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

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Guaranteed loan levels supportable by subsidy
budget authority:
2150 Stafford.......................... 12,199 12,146 12,635
2150 Unsubsidized Stafford............. 8,458 8,916 9,618
2150 PLUS.............................. 2,114 2,460 2,760
2150 Consolidated...................... 4,048 2,660 2,767
--------- --------- ----------
2159 Total loan guarantee levels..... 26,819 26,182 27,780
Guaranteed loan subsidy (in percent):
2320 Stafford.......................... 17.31 21.02 21.25
2320 Unsubsidized Stafford............. 0.88 7.80 7.89
2320 PLUS.............................. -1.90 6.05 6.32
2320 Consolidated...................... -3.52 3.41 2.35
--------- --------- ----------
2329 Weighted average subsidy rate... 7.47 13.32 13.26
Guaranteed loan subsidy budget authority:
2330 Stafford.......................... 1,964 2,554 2,685
2330 Unsubsidized Stafford............. 161 695 759
2330 PLUS.............................. 3 149 174
2330 Consolidated...................... -73 91 65
2330 Upward reestimate................. 1,307
2330 Downward reestimate............... -1,460
--------- --------- ----------
2339 Total subsidy budget authority.. 2,055 3,336 3,683
Guaranteed loan subsidy outlays:
2340 Stafford.......................... 2,222 2,201 2,370
2340 Unsubsidized Stafford............. 222 499 650
2340 PLUS.............................. 12 101 145
2340 Consolidated...................... -104 121 65
2340 Upward reestimate................. 1,307
2340 Downward reestimate............... -1,460
--------- --------- ----------
2349 Total subsidy outlays........... 2,352 2,769 3,230
----------------------------------------------------------------------------

Administrative expense data:
3510 Budget authority.................. 46 47 47
3590 Outlays........................... 38 47 51
---------------------------------------------------------------------------

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

[[Page 373]]

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 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 19 20 22
12.1 Civilian personnel benefits....... 4 4 4
23.1 Rental payments to GSA............ 2 2 2
23.3 Communications, utilities, and
miscellaneous charges........... 1 1 1
24.0 Printing and reproduction......... 1 1 1
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....................... 17 17 16
41.0 Grants, subsidies, and
contributions................... 2,055 4,796 3,683
--------- --------- ----------
99.9 Total new obligations........... 2,101 4,843 3,731
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 361 368 368
---------------------------------------------------------------------------

Family Federal Education Loan Program Account

(Legislative proposal, subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
Guaranteed loan subsidy:

02.01 Stafford........................ -192
02.02 Unsubsidized Stafford........... -161
02.03 PLUS............................ -11
02.05 Consolidated.................... 37 52
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 37 -312
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 37 -312
23.95 Total new obligations............. -37 312
----------------------------------------------------------------------------

New budget authority (gross), detail:
60.05 Appropriation (indefinite)........ 37 -746
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 434
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 37 -312
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 37 -312
73.20 Total outlays (gross)............. -37 163
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. -149
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 37 -163
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -434
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 37 -746
90.00 Outlays........................... 37 -597
---------------------------------------------------------------------------

The Administration will propose legislation to do the following:
improve the management and collection of defaulted loans; extend the
temporary loan consolidation policies included in the HEA; reduce
interest subsidy on loans financed through tax exempt securities; and
expand the availability of Voluntary Flexible Agreements.

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

----------------------------------------------------------------------------
Identification code 91-0231-4-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Guaranteed loan subsidy (in percent):
2320 Stafford.......................... 0.00 -1.52
2320 Unsubsidized Stafford............. 0.00 -1.67
2320 PLUS.............................. 0.00 -0.39
2320 Consolidated...................... 1.39 1.87
--------- --------- ----------
2329 Weighted average subsidy rate... 0.14 -1.12
Guaranteed loan subsidy budget authority:
2330 Stafford.......................... -192
2330 Unsubsidized Stafford............. -161
2330 PLUS.............................. -11
2330 Consolidated...................... 37 52
2330 Non-contract Modifications........ -434
--------- --------- ----------
2339 Total subsidy budget authority.. 37 -746
Guaranteed loan subsidy outlays:
2340 Stafford.......................... -115
2340 Unsubsidized Stafford............. -94
2340 PLUS.............................. -6
2340 Consolidated...................... 37 52
2340 Non-contract Modifications........ -434
--------- --------- ----------
2349 Total subsidy outlays........... 37 -597
---------------------------------------------------------------------------

Family Federal Education Loan Program Account

(Legislative proposal, discretionary offset)

Program and Financing (in millions of dollars)

Obligations by program activity:
Guaranteed loan subsidy:

02.01 Stafford........................ -4
02.02 Unsubsidized Stafford........... -1
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... -5
----------------------------------------------------------------------------

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

New budget authority (gross), detail:
60.05 Appropriation (indefinite)........ -768
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 763
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... -5
----------------------------------------------------------------------------

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

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... -3
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -763
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -768
90.00 Outlays........................... -766
---------------------------------------------------------------------------

[[Page 374]]

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

----------------------------------------------------------------------------
Identification code 91-0231-6-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Guaranteed loan subsidy (in percent):
2320 Stafford.......................... -0.03
2320 Unsubsidized Stafford............. -0.01
--------- --------- ----------
2329 Weighted average subsidy rate... -0.02
Guaranteed loan subsidy budget authority:
2330 Stafford.......................... -4
2330 Unsubsidized Stafford............. -1
2330 Non-contract modifications........ -763
--------- --------- ----------
2339 Total subsidy budget authority.. -768
Guaranteed loan subsidy outlays:
2340 Stafford.......................... -3
2340 Unsubsidized Stafford............. -1
2340 Non-contract modifications........ -763
--------- --------- ----------
2349 Total subsidy outlays........... -767
---------------------------------------------------------------------------

Federal Family Education Loan Program, Financing Account

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

Program and Financing (in millions of dollars)

Obligations by program activity:
Stafford loans:

01.01 Interest benefits............... 3,099 1,948 1,785
01.02 Special allowance............... 169 136 218
01.03 Default claims.................. 934 1,511 1,593
01.04 Death, disability, and
bankruptcy claims............. 101 103 113
01.06 Supplemental preclaims
assistance.................... 25
01.07 Contract collection costs....... 2 7 12
01.08 Loan Processing Fee............. 79 82
--------- --------- ----------
01.91 Subtotal, Stafford loans...... 4,330 3,784 3,803
Unsubsidized Stafford loans:

02.02 Special allowance............... 62 77 137
02.03 Default claims.................. 260 691 853
02.04 Death, disability, and
bankruptcy claims............. 37 39 50
02.06 Supplemental preclaims
assistance.................... 7
02.07 Contract collection costs....... 3 1 2
02.08 Loan Processing Fee............. 58 63
--------- --------- ----------
02.91 Subtotal, Unsubsidized
Stafford loans.............. 369 866 1,105
PLUS loans:

03.02 Special allowance............... 27 22 25
03.03 Default claims.................. 63 128 147
03.04 Death, disability, and
bankruptcy claims............. 31 45 51
03.05 Supplemental preclaims
assistance.................... 3
03.06 Contract collection costs....... 1
03.07 Loan Processing Fee............. 16 18
--------- --------- ----------
03.91 Subtotal, PLUS loans.......... 125 211 241
SLS loans:

04.02 Special allowance............... 9 3 2
04.03 Default claims.................. 123 134 101
04.04 Death, disability and bankruptcy
claims........................ 13 11 9
04.06 Supplemental preclaims
assistance.................... 4
04.07 Contract collection costs....... 1 3 3
--------- --------- ----------
04.91 Subtotal, SLS loans........... 150 151 115
Consolidation loans:

05.02 Special allowance............... 53 8
05.03 Default claims.................. 319 515 553
05.04 Death, disability, and
bankruptcy claims............. 61 25 29
05.06 Supplemental preclaims
assistance.................... 13
05.07 Contract collection costs....... 1 1 2
--------- --------- ----------
05.91 Subtotal, Consolidations loans 447 541 592
07.01 Interest paid to Treasury......... 26 9
08.02 Downward reestimate............... 1,128
08.03 Interest on downward reestimate... 331
--------- --------- ----------
08.91 Direct Program by Activities--
Subtotal (1 level)............ 1,459
--------- --------- ----------
10.00 Total new obligations........... 5,447 7,021 5,856
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 9,292 8,657 8,340
22.00 New financing authority (gross)... 4,812 6,704 6,066
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 14,104 15,361 14,406
23.95 Total new obligations............. -5,447 -7,021 -5,856
24.40 Unobligated balance available, end
of year......................... 8,657 8,340 8,549
----------------------------------------------------------------------------

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

68.00 Offsetting collections (cash)... 5,381 6,821 5,862
68.10 From Federal sources: Change in
receivables and unpaid,
unfilled orders............... -332 204
68.47 Portion applied to debt
reduction..................... -237 -117
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 4,812 6,704 6,066
----------------------------------------------------------------------------

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

72.40 Obligated balance, start of year -981 -557 -479
72.95 Receivables from program account 1,159 827 827
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 178 270 348
73.10 Total new obligations............. 5,447 7,021 5,856
73.20 Total financing disbursements
(gross)......................... -5,355 -6,943 -5,915
Unpaid obligations, end of year:

74.40 Obligated balance, end of year.. -557 -479 -740
74.95 Receivables from program account 827 827 1,031
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 270 348 291
87.00 Total financing disbursements
(gross)......................... 5,355 6,943 5,915
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

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

88.00 Stafford loans............ -1,963 -2,293 -2,411
88.00 Unsubsidized Stafford..... -161 -613 -669
88.00 PLUS loans................ -3 -131 -153
88.00 Consolidated loans........ 73 -91 -65
88.00 Upward reestimate......... -1,307
88.00 Scheduled payments from
Liquidating account for
noncontractual
modifications........... -263 -125
88.25 Interest on uninvested funds:
Stafford loans.............. -550 -491 -493
Non-Federal sources:
Stafford loans:

88.40 Recoveries on defaults.... -707 -509 -631
88.40 Origination fees.......... -575 -378 -392
88.40 Sallie Mae offset fees.... -65 -14 -11
88.40 Recoveries on defaults.... -115 -112 -174
88.40 Origination fees.......... -384 -268 -289
Unsubsidized Stafford:

88.40 Sallie Mae offset fees.... -24 -6 -6
88.40 Recoveries on defaults.... -73 -38 -47
88.40 Origination fees.......... -96 -72 -81
PLUS:

88.40 Sallie Mae offset fees.... -13 -3 -2
88.40 Recoveries on defaults.... -165 -89 -98
88.40 Recoveries on defaults.... -41 -95 -137
SLS:

88.40 Origination fees.......... -23 -13 -14
88.40 Consolidated Loan Holders
Fee..................... -233 -173 -189
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -5,381 -6,821 -5,862
88.95 Change in receivables from program
accounts........................ 332 -204
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... -237 -117
90.00 Financing disbursements........... -26 122 53
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4251-0-3-502 1998 actual 1999 est. 2000 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................. 12,199 12,146 12,635
--------- --------- ----------

[[Page 375]]

2150 Total guaranteed loan
commitments................... 12,199 12,146 12,635
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 43,955 47,355 51,455
2231 Disbursements of new guaranteed
loans........................... 10,382 10,802 11,194
2251 Repayments and prepayments........ -5,274 -5,150 -6,487
Adjustments:

2261 Terminations for default that
result in loans receivable.... -1,607 -1,449 -1,608
2263 Terminations for default that
result in claim payments...... -101 -103 -113
--------- --------- ----------
2290 Outstanding, end of year........ 47,355 51,455 54,441
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 47,355 51,455 54,441
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 2,709 3,515 4,394
2331 Disbursements for guaranteed
loan claims................... 1,607 1,449 1,608
2351 Repayments of loans receivable.. -707 -509 -632
2361 Write-offs of loans receivable.. -94 -61 -76
--------- --------- ----------
2390 Outstanding, end of year...... 3,515 4,394 5,294
----------------------------------------------------------------------------

UNSUBSIDIZED STAFFORD
Position with respect to appropriations act
limitation on commitments:
2131 Guaranteed loan commitments exempt
from limitation................. 8,458 8,916 9,618
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 8,458 8,916 9,618
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 14,284 19,229 24,468
2231 Disbursements of new guaranteed
loans........................... 6,915 7,649 8,269
2251 Repayments and prepayments........ -1,506 -1,734 -2,525
Adjustments:

2261 Terminations for default that
result in loans receivable.... -427 -637 -843
2263 Terminations for default that
result in claim payments...... -37 -39 -50
--------- --------- ----------
2290 Outstanding, end of year........ 19,229 24,468 29,319
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 19,229 24,468 29,319
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 320 617 1,129
2331 Disbursements for guaranteed
loan claims................... 427 637 843
2351 Repayments of loans receivable.. -115 -112 -174
2361 Write-offs of loans receivable.. -15 -13 -21
--------- --------- ----------
2390 Outstanding, end of year...... 617 1,129 1,777
----------------------------------------------------------------------------

PLUS
Position with respect to appropriations act
limitation on commitments:
2131 Guaranteed loan commitments exempt
from limitation................. 2,114 2,460 2,760
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 2,114 2,460 2,760
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 4,635 5,107 6,157
2231 Disbursements of new guaranteed
loans........................... 1,722 2,064 2,325
2251 Repayments and prepayments........ -1,103 -849 -1,071
Adjustments:

2261 Terminations for default that
result in loans receivable.... -116 -120 -147
2263 Terminations for default that
result in claim payments...... -31 -45 -51
--------- --------- ----------
2290 Outstanding, end of year........ 5,107 6,157 7,213
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 5,107 6,157 7,213
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 335 368 445
2331 Disbursements for guaranteed
loan claims................... 116 120 147
2351 Repayments of loans receivable.. -73 -38 -47
2361 Write-offs of loans receivable.. -10 -5 -6
--------- --------- ----------
2390 Outstanding, end of year...... 368 445 539
----------------------------------------------------------------------------

SLS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 4,116 3,036 2,263
2251 Repayments and prepayments........ -862 -627 -636
Adjustments:

2261 Terminations for default that
result in loans receivable.... -205 -135 -108
2263 Terminations for default that
result in claim payments...... -13 -11 -9
--------- --------- ----------
2290 Outstanding, end of year........ 3,036 2,263 1,510
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 3,036 2,263 1,510
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 829 847 882
2331 Disbursements for guaranteed
loan claims................... 205 135 108
2351 Repayments of loans receivable.. -165 -89 -98
2361 Write-offs of loans receivable.. -22 -11 -12
--------- --------- ----------
2390 Outstanding, end of year...... 847 882 880
----------------------------------------------------------------------------

CONSOLIDATED
Position with respect to appropriations act
limitation on commitments:
2131 Guaranteed loan commitments exempt
from limitation................. 4,049 2,660 2,767
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 4,049 2,660 2,767
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 8,396 9,675 10,744
2231 Disbursements of new guaranteed
loans........................... 2,947 2,655 2,762
2251 Repayments and prepayments........ -1,118 -1,067 -1,309
Adjustments:

2261 Terminations for default that
result in loans receivable.... -489 -494 -557
2263 Terminations for default that
result in claim payments...... -61 -25 -29
--------- --------- ----------
2290 Outstanding, end of year........ 9,675 10,744 11,611
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 9,675 10,744 11,611
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 293 736 1,124
2331 Disbursements for guaranteed
loan claims................... 489 494 557
2351 Repayments of loans receivable.. -41 -95 -137
2361 Write-offs of loans receivable.. -5 -11 -16
--------- --------- ----------
2390 Outstanding, end of year...... 736 1,124 1,528
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4251-0-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 9,292 7,830 8,340 8,549
Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:

1501 Defaulted guaranteed loans
receivable, gross............. 4,485 6,083 7,974 10,018
------------ -------------- ------------ -------------
1599 Net present value of assets
related to defaulted
guaranteed loans............ 4,485 6,083 7,974 10,018

[[Page 376]]

1704 Net value of assets related to
pre-1992 direct loans receivable
and acquired defaulted
guaranteed loans receivable:
Defaulted guaranteed loans and
interest receivable, net........
------------ -------------- ------------ -------------
1999 Total assets.................... 13,777 13,913 16,314 18,567
LIABILITIES:
2103 Federal liabilities: Debt......... 680 354 117
------------ -------------- ------------ -------------
2999 Total liabilities............... 680 354 117
NET POSITION:
3100 Appropriated capital.............. 13,097 13,559 16,197 18,567
------------ -------------- ------------ -------------
3999 Total net position.............. 13,097 13,559 16,197 18,567
------------ -------------- ------------ -------------
4999 Total liabilities and net position 13,777 13,913 16,314 18,567
-----------------------------------------------------------------------------------------------

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 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
Stafford loans:

01.02 Special allowance............... -7
01.06 Contract collection costs....... 1
--------- --------- ----------
01.91 Subtotal, Stafford loans...... -6
Unsubsidized Stafford loans:

02.02 Special allowance............... -5
08.05 Payment of non-contractual
modifications to program account 434
--------- --------- ----------
10.00 Total new obligations........... 423
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 31
22.00 New financing authority (gross)... 31 -192
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 31 -161
23.95 Total new obligations............. -423
24.40 Unobligated balance available, end
of year......................... 31 -584
----------------------------------------------------------------------------

New financing authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 31 -192
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 423
73.20 Total financing disbursements
(gross)......................... -425
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. -2
87.00 Total financing disbursements
(gross)......................... 425
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
Federal sources:
88.00 Stafford loans.............. 172
88.00 Unsubsidized Stafford loans. 142
88.00 PLUS loans.................. 9
88.00 Consolidated loans.......... -37 -52
88.00 Payment from liquidating
account for non-
contractual modifications. -69
88.25 Interest on uninvested funds.. -1 13
Non-Federal sources:
88.40 Recoveries on defaults-
Stafford loans............ -24
88.40 Recoveries on defaults-Unsub
Stafford loans............ -7
88.40 Recoveries on defaults-PLUS
loans..................... -2
88.40 Recoveries on defaults-SLS
loans..................... -3
88.40 Recoveries on defaults-
Consolidated loans........ -6
88.40 Consolidated loan holder's
fee....................... 7 19
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -31 192
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... -31 617
---------------------------------------------------------------------------

The Administration will propose legislation to do the following:
improve the management and collection of defaulted loans; extend the
temporary loan consolidation policies included in the HEA; reduce
interest subsidy on loans financed through tax exempt securities; and,
expand the availability of Voluntary Flexible Agreements.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4251-4-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 30 -585
Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:

1501 Defaulted guaranteed loans
receivable, gross............. -47
------------ -------------- ------------ -------------
1599 Net present value of assets
related to defaulted
guaranteed loans............ -47
------------ -------------- ------------ -------------
1999 Total assets.................... 30 -632
LIABILITIES:
------------ -------------- ------------ -------------
2999 Total liabilities...............
NET POSITION:
3100 Appropriated capital.............. 30 -632
------------ -------------- ------------ -------------
3999 Total net position.............. 30 -632
------------ -------------- ------------ -------------
4999 Total liabilities and net position 30 -632
-----------------------------------------------------------------------------------------------

Family Federal Education Loan Program, Financial Account

(Legislative proposal, discretionary offset)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4251-6-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
08.05 Payment to Program account for
non-contractual modifications... 763
--------- --------- ----------
10.00 Total new obligations........... 763
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New financing authority (gross)... 554
23.95 Total new obligations............. -763
24.40 Unobligated balance available, end
of year......................... -210
----------------------------------------------------------------------------

New financing authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 554
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 763
73.20 Total financing disbursements
(gross)......................... -763
87.00 Total financing disbursements
(gross)......................... 763
----------------------------------------------------------------------------

[[Page 377]]

Offsets:
Against gross financing authority and
financing disbursements:

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

88.00 Stafford loans............ 4
88.00 Payment from liquidating
account for non-
contractual
modifications........... -537
88.25 Interest on uninvested funds:
Stafford loans.............. 5
Non-Federal sources:
Stafford loans:

88.40 Recoveries on defaults.... -20
88.40 Recoveries on defaults.... -4
88.40 Recoveries on defaults.... -2
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -554
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... 209
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

2111 Limitation on guaranteed loans
made by private lenders.......
--------- --------- ----------
2150 Total guaranteed loan
commitments.................
----------------------------------------------------------------------------

Addendum:

Cumulative balance of defaulted
guaranteed loans that result
in loans receivable:
2310 Outstanding, start of year....
2351 Repayments of loans receivable -20
--------- --------- ----------
2390 Outstanding, end of year.... -20
----------------------------------------------------------------------------

Unsubsidized stafford loans
Position with respect to appropriations act
limitation on commitments:

Addendum:

Cumulative balance of defaulted
guaranteed loans that result
in loans receivable:
2310 Outstanding, start of year....
2351 Repayments of loans receivable -4
--------- --------- ----------
2390 Outstanding, end of year.... -4
----------------------------------------------------------------------------

PLUS loans
Position with respect to appropriations act
limitation on commitments:

Addendum:

Cumulative balance of defaulted
guaranteed loans that result
in loans receivable:
2310 Outstanding, start of year....
2351 Repayments of loans receivable -2
--------- --------- ----------
2390 Outstanding, end of year.... -2
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4251-6-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ -210
Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:

1501 Defaulted guaranteed loans
receivable, gross............. -26
------------ -------------- ------------ -------------
1599 Net present value of assets
related to defaulted
guaranteed loans............ -26
------------ -------------- ------------ -------------
1999 Total assets.................... -236
LIABILITIES:
------------ -------------- ------------ -------------
2999 Total liabilities...............
NET POSITION:
3100 Appropriated capital.............. -236
------------ -------------- ------------ -------------
3999 Total net position.............. -236
-----------------------------------------------------------------------------------------------

Federal Family Education Loan Liquidating Account

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

Program and Financing (in millions of dollars)

Obligations by program activity:
Stafford loans:

01.01 Interest benefits, net of
origination fees.............. 98 8 2
01.02 Special allowance net of
origination fees.............. 316 292 210
01.03 Default claims.................. 325 215 141
01.04 Death, disability, and
bankruptcy claims............. 33 31 23
01.06 Supplemental preclaims
assistance.................... 33
01.07 Contract collection costs....... 85 40 35
--------- --------- ----------
01.91 Subtotal, Stafford loans...... 890 586 411
PLUS/SLS loans:

02.01 Default claims.................. 32 48 26
02.02 Death, disability, and
bankruptcy claims............. 11 7 4
02.04 Supplemental preclaims
assistance.................... 7
02.05 Contract collection costs....... 10 9 7
02.06 Special allowance net of
origination fees.............. 6 2 2
--------- --------- ----------
02.91 Subtotal, PLUS/SLS loans...... 66 66 39
Miscellaneous costs:

03.01 Scheduled payments to finance
account for non-contractual
modifications................. 263 125
--------- --------- ----------
10.00 Total new obligations........... 1,219 777 450
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 149
22.00 New budget authority (gross)...... 1,342 777 450
22.10 Resources available from
recoveries of prior year
obligations..................... 26
22.40 Capital transfer to general fund.. -149
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,368 777 450
23.95 Total new obligations............. -1,219 -777 -450
24.40 Unobligated balance available, end
of year......................... 149
----------------------------------------------------------------------------

New budget authority (gross), detail:
60.05 Appropriation (indefinite)........ 551
Spending authority from offsetting
collections:

68.00 Offsetting collections (cash)... 791 1,188 989
68.27 Capital transfer to general fund -411 -539
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 791 777 450
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 1,342 777 450
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 220 741 117
73.10 Total new obligations............. 1,219 777 450
73.20 Total outlays (gross)............. -673 -1,401 -499

[[Page 378]]

73.45 Adjustments in unexpired accounts. -26
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 741 117 68
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 453 660 383
86.98 Outlays from permanent balances... 220 741 116
--------- --------- ----------
87.00 Total outlays (gross)........... 673 1,401 499
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

88.40 Federal collections on
defaulted loans......... -245 -274 -233
88.40 Federal collections on
bankruptcies............ -12 -8 -5
88.40 Offsets against Federal
tax refunds............. -156 -327 -286
Other collections:

88.40 Reimbursements from
guaranty agencies....... -287 -406 -316
88.40 Sallie Mae Offset Fee..... -3 -1
88.40 Federal collections on
defaulted loans, PLUS/
SLS..................... -32 -65 -62
88.40 Federal collections on
bankruptcies, PLUS/SLS.. -2 -2 -1
88.40 Offsets against Federal
tax refunds, PLUS/SLS... -20 -41 -36
88.40 Reimbursements from
guaranty agencies, PLUS/
SLS..................... -37 -62 -49
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -791 -1,188 -989
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 551 -411 -539
90.00 Outlays........................... -118 213 -490
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

1998 actual 1999 est. 2000 est.
Enacted/requested:
Budget Authority.................. 551 -411 -539
Outlays........................... -118 213 -490
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 480
Outlays........................... 468
------------------------------------
Total:
Budget Authority.................. 551 -411 -59
Outlays........................... -118 213 -22
====================================

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
STAFFORD LOANS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 20,540 14,217 9,552
2251 Repayments and prepayments........ -5,411 -4,387 -3,433
Adjustments:

2261 Terminations for default that
result in loans receivable.... -868 -240 -158
2263 Terminations for default that
result in claim payments...... -44 -38 -27
--------- --------- ----------
2290 Outstanding, end of year........ 14,217 9,552 5,934
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 14,217 9,552 5,934
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 9,236 8,818 8,098
2331 Disbursements for guaranteed
loan claims................... 868 240 158
2351 Repayments of loans receivable.. -836 -593 -476
2361 Write-offs of loans receivable.. -284 -272 -250
2364 Other adjustments, net.......... -166 -95 -75
--------- --------- ----------
2390 Outstanding, end of year...... 8,818 8,098 7,455
----------------------------------------------------------------------------

PLUS/SLS LOANS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 3,043 1,901 1,199
2251 Repayments and prepayments........ -1,046 -648 -423
Adjustments:

2261 Terminations for default that
result in loans receivable.... -85 -47 -30
2263 Terminations for default that
result in claim payments...... -11 -7 -4
--------- --------- ----------
2290 Outstanding, end of year........ 1,901 1,199 742
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 1,901 1,199 742
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 2,766 2,640 2,493
2331 Disbursements for guaranteed
loan claims................... 85 47 30
2351 Repayments of loans receivable.. -104 -97 -82
2361 Write-offs of loans receivable.. -85 -82 -77
2364 Other adjustments, net.......... -22 -15 -12
--------- --------- ----------
2390 Outstanding, end of year...... 2,640 2,493 2,352
---------------------------------------------------------------------------

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-0230-0-1-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
Stafford:
0111 Revenue........................... 1,095 699 1,019 842
0112 Expense........................... -1,170 -889 -585 -410
------------ -------------- ------------ -------------
0119 Net income or loss (-)............ -75 -190 434 432
PLUS/SLS:
0121 Revenue........................... 140 91 169 147
0122 Expense........................... -42 -67 -66 -40
------------ -------------- ------------ -------------
0129 Net income or loss (-)............ 98 24 103 107
------------ -------------- ------------ -------------
0199 Net income or loss................ 23 -166 537 539
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1701 Defaulted guaranteed loans,
gross......................... 11,244 11,458 10,591 9,807
1704 Defaulted guaranteed loans and
interest receivable, net...... 11,244 11,458 10,591 9,807
------------ -------------- ------------ -------------
1799 Value of assets related to
loan guarantees............. 11,244 11,458 10,591 9,807
------------ -------------- ------------ -------------
1999 Total assets.................... 11,464 12,199 10,707 9,875
NET POSITION:
3100 Appropriated capital.............. 11,464 12,199 10,707 9,875
------------ -------------- ------------ -------------
3999 Total net position.............. 11,464 12,199 10,707 9,875
-----------------------------------------------------------------------------------------------
\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)

[[Page 379]]

33.0 Investments and loans............. 357 262 167
41.0 Grants, subsidies, and
contributions................... 723 428 213
42.0 Insurance claims and indemnities.. 43 38 27
--------- --------- ----------
99.9 Total new obligations........... 1,219 777 450
---------------------------------------------------------------------------

Family Federal Education Loan Liquidating Account

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
Stafford loans:

01.07 Contract collection costs....... 2
PLUS/SLS loans:

02.04 Contract collection costs....... 1
03.01 Payment to financing account for
non-contract modifications...... 606
--------- --------- ----------
10.00 Total new obligations........... 609
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 609
23.95 Total new obligations............. -609
----------------------------------------------------------------------------

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

68.00 Offsetting collections (cash)... 129
68.27 Capital transfer to general fund 480
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 609
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 609
73.20 Total outlays (gross)............. -597
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 12
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 597
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

88.40 Federal collections on
defaulted loans......... -107
88.40 Offsets against Federal
tax refunds.............
88.40 Reimbursements from
guaranty agencies....... -19
Other collections:
88.40
Federal collections on defaulted
loans, PLUS/SLS.....................
88.40
Offsets against Federal tax refunds,
PLUS/SLS............................
88.40
Reimbursements from guaranty agencies,
PLUS/SLS............................ -3
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -129
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 480
90.00 Outlays........................... 468
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-2-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
STAFFORD LOANS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........
2251 Repayments and prepayments........
Adjustments:

2261 Terminations for default that
result in loans receivable....
2263 Terminations for default that
result in claim payments......
--------- --------- ----------
2290 Outstanding, end of year........
----------------------------------------------------------------------------

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

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

2310 Outstanding, start of year......
2331 Disbursements for guaranteed
loan claims...................
2351 Repayments of loans receivable.. -119
2361 Write-offs of loans receivable..
2364 Other adjustments, net.......... -4
--------- --------- ----------
2390 Outstanding, end of year...... -123
----------------------------------------------------------------------------

PLUS/SLS LOANS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........
2251 Repayments and prepayments........
Adjustments:

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

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

2310 Outstanding, start of year......
2331 Disbursements for guaranteed
loan claims...................
2351 Repayments of loans receivable.. -2
2361 Write-offs of loans receivable..
2364 Other adjustments, net.......... -1
--------- --------- ----------
2390 Outstanding, end of year...... -3
---------------------------------------------------------------------------

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-0230-2-1-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
Stafford:
0111 Revenue........................... 126
0112 Expense........................... 2
------------ -------------- ------------ -------------
0119 Net income or loss (-)............ 128
PLUS/SLS:
0121 Revenue........................... 3
0122 Expense........................... 1
------------ -------------- ------------ -------------
0129 Net income or loss (-)............ 4
------------ -------------- ------------ -------------
0199 Net income or loss................ 132
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1701 Defaulted guaranteed loans,
gross......................... -126
1704 Defaulted guaranteed loans and
interest receivable, net...... -126
------------ -------------- ------------ -------------
1799 Value of assets related to
loan guarantees............. -126
------------ -------------- ------------ -------------
1999 Total assets.................... -114
NET POSITION:
3100 Appropriated capital.............. -114
------------ -------------- ------------ -------------
3999 Total net position.............. -114
-----------------------------------------------------------------------------------------------

[[Page 380]]

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-2-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
25.2 Other services.................... 3
41.0 Grants, subsidies, and
contributions................... 606
--------- --------- ----------
99.9 Total new obligations........... 609
---------------------------------------------------------------------------

College Housing and Academic Facilities Loans Program

For Federal administrative expenses authorized under section 121 of
the Higher Education Act, [$698,000] $737,000 to carry out activities
related to existing facility loans entered into under the Higher
Education Act. (Department of Education Appropriations Act, 1999, as
included in Public Law 105-277, section 101(f).)

Historically Black College and University Capital Financing Program
Account

The total amount of bonds insured pursuant to section 344 of title
III, part D 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 III, part D of the Higher Education Act, as amended, [$96,000]
$207,000. (Department of Education Appropriations Act, 1999, as included
in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

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

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

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)........... 1 1 1
----------------------------------------------------------------------------

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

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

----------------------------------------------------------------------------
Identification code 91-0241-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Direct loan subsidy outlays:
1340 Subsidy outlays...................
----------------------------------------------------------------------------

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
only. 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 (CHAFL) 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 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
consolidated funding for administrative activities for CHAFL, HEFL, and
CHL under a single account. The 2000 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 5
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 1999
and 2000. No subsidy appropriations are required. The 2000 budget
requests funds for continuing Federal administrative activities only.

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0241-0-1-502 1998 actual 1999 est. 2000 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.

[[Page 381]]

Program and Financing (in millions of dollars)

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

Budgetary resources available for obligation:
22.00 New financing authority (gross)... 2 1 1
22.10 Resources available from
recoveries of prior year
obligations..................... 5
22.70 Balance of authority to borrow
withdrawn....................... -4
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 3 1 1
23.95 Total new obligations............. -1 -1 -1
----------------------------------------------------------------------------

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

68.00 Offsetting collections (cash)... 2 1 1
68.10 Change in receivables from
Program Account............... -1
68.15 Adjustments to receivables...... 1
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 2 1 1
----------------------------------------------------------------------------

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

Obligated balance, start of
year:
72.40 Obligated balance: Borrowing
Authority................... 13 8 8
72.40 Obligated balance, Treasury
Interest.................... 1 2
72.95 Receivables from program account 2 1 1
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 16 11 9
73.10 Total new obligations............. 1 1 1
73.20 Total financing disbursements
(gross)......................... -3 -4 -2
73.45 Adjustments in unexpired accounts. -5
Unpaid obligations, end of year:

Obligated balance, end of year:
74.40 Obligated balance: Borrowing
Authority................... 8 8 7
74.40 Obligated balance: Treasury
Interest.................... 2
74.95 Receivables from program account 1 1 1
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 11 9 8
87.00 Total financing disbursements
(gross)......................... 3 4 2
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

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

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

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4252-0-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1112 Unobligated direct loan limitation
1113 Unobligated limitation carried
forward.........................
1131 Direct loan obligations exempt
from limitation.................
--------- --------- ----------
1150 Total direct loan obligations...
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 20 21 22
1231 Disbursements: Direct loan
disbursements................... 1 1 1
--------- --------- ----------
1290 Outstanding, end of year........ 21 22 23
---------------------------------------------------------------------------

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, 2000.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4252-0-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:

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

1401 Direct loans receivable, gross.. 18 21 22 22
1402 Interest receivable............. 1 1 1
1405 Allowance for subsidy cost (-).. -1
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 17 22 23 23
------------ -------------- ------------ -------------
1999 Total assets.................... 21 24 26 26
LIABILITIES:
Federal liabilities:

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

College Housing and Academic Facilities Loans Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
10.00 Total obligations (object class
43.0)........................... 25 24 23
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 58 15
22.00 New budget authority (gross)...... 67 57 53
22.10 Resources available from
recoveries of prior year
obligations..................... 3
22.40 Capital transfer to general fund.. -88 -48 -30
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 40 24 23
23.95 Total new obligations............. -25 -24 -23
24.40 Unobligated balance available, end
of year......................... 15
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 67 57 53
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 30 29 29
73.10 Total new obligations............. 25 24 23
73.20 Total outlays (gross)............. -23 -24 -23
73.45 Adjustments in unexpired accounts. -3
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 29 29 29
----------------------------------------------------------------------------

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

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Repayments of principal..... -46 -38 -35
88.40 Interest received on loans.. -21 -19 -18
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -67 -57 -53
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................

[[Page 382]]

90.00 Outlays........................... -44 -33 -30
---------------------------------------------------------------------------

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

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0242-0-1-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
CHAFL LIQUIDATING
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 154 151 151
1231 Disbursements: Direct loan
disbursements................... 4
1251 Repayments: Repayments and
prepayments..................... -7
--------- --------- ----------
1290 Outstanding, end of year........ 151 151 151
----------------------------------------------------------------------------

HIGHER EDUCATION FACILITIES
LOANS
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 44 35 31
1251 Repayments: Repayments and
prepayments..................... -9 -4 -2
--------- --------- ----------
1290 Outstanding, end of year........ 35 31 29
----------------------------------------------------------------------------

COLLEGE HOUSING LOANS
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 416 380 349
1251 Repayments: Repayments and
prepayments..................... -36 -31 -30
--------- --------- ----------
1290 Outstanding, end of year........ 380 349 319
---------------------------------------------------------------------------

Historically Black College and University Capital Financing Direct Loan
Financing Account

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4255-0-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
87.00 Total financing disbursements
(gross)......................... 4 9 23
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... 4 9 23
---------------------------------------------------------------------------

In 1997, the Federal Financing Bank (FFB) began purchasing bonds
issued by the HBCU Designated Bonding Authority. Under the policies
governing Federal credit programs, bonds purchased by the FFB and
supported by the Department of Education with a letter of credit 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.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4255-0-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
LIABILITIES:
2204 Non-Federal liabilities:
Liabilities for loan guarantees. 4 13 36
------------ -------------- ------------ -------------
2999 Total liabilities............... 4 13 36
------------ -------------- ------------ -------------
4999 Total liabilities and net position 4 13 36
-----------------------------------------------------------------------------------------------

Historically Black College and University Capital Financing, Guaranteed
Loan Financing Account

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4254-0-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
87.00 Total financing disbursements
(gross)......................... 1 7
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... 1 7
---------------------------------------------------------------------------
Note.--The appropriations language for this program specifies a
limitation that applies to direct and guaranteed loans in total.

As noted above, this account represents the HBCU capital financing
loans that the Department of Education expects to be financed from
private sources.

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4254-0-3-502 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders.........
--------- --------- ----------
2150 Total guaranteed loan
commitments...................
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 1
2231 Disbursements of new guaranteed
loans........................... 1 7
2251 Repayments and prepayments........
--------- --------- ----------
2290 Outstanding, end of year........ 1 8
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 1 8
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4254-0-3-502 1997 actual 1998 actual 1999 est. 2000 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 1 7
------------ -------------- ------------ -------------
1999 Total assets.................... 1 7
-----------------------------------------------------------------------------------------------

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, including sections 411
and 412; 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, [$664,867,000] $540,282,000: Provided, That funds shall be
available to the National Assessment Governing Board to support
continuation of its contract for the devel

[[Page 383]]

opment of voluntary national tests in reading and mathematics, including
pilot testing and field testing of test items and test forms: Provided
further, That $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 activity in the
statement of managers on the conference report accompanying Public Law
105-78 [and in the statement of the managers on the conference report
accompanying this Act]: Provided further, That the funds made available
for comprehensive school reform shall become available on July 1, [1999]
2000, and remain available through September 30, [2000] 2001, 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 $16,000,000 of the funds made
available for title X, part A of the Elementary and Secondary Education
Act, shall be carried out consistent with the subject areas outlined in
the House and Senate reports and the statement of the managers, and
should be administered in a manner consistent with current departmental
practices and policies:] Provided further, That of the funds available
for part A of title X of the Elementary and Secondary Education Act,
$5,000,000 shall be awarded to the National Constitution Center,
established by Public Law 100-433, for exhibition design, program
planning, and operation of the Center: Provided further, That the
Secretary may require recipients of awards under part A of title X of
the Elementary and Secondary Education Act to provide matching funds
from sources other than Federal funds and may limit competitions to
State or local educational agencies: Provided further, That of the funds
available for section 10601 of title X of such Act, $2,000,000 shall be
awarded to the Center for Educational Technologies for production and
distribution of an effective CD ROM product that would complement the
``We the People: The Citizen and the Constitution'' curriculum: Provided
further, That, in addition to the $6,000,000 for Title VI of Public Law
103-227 and notwithstanding the provisions of section 601(c)(1)(C) of
that Act, $1,000,000 shall be available to the Center for Civic
Education to conduct a civic education program with Northern Ireland and
the Republic of Ireland and, consistent with the civics and government
activities authorized in section 601(c)(3) of Public Law 103-227, to
provide civic education assistance to democracies in developing
countries. The term ``developing countries'' shall have the same meaning
as the term ``developing country'' in the Education for the Deaf Act:
[Provided further, That of the amount provided for part A of title X of
the Elementary and Secondary Education Act of 1965, $2,000,000 shall be
for a demonstration of full service community school sites in Charles
County, Maryland, Westchester County, New York, Cranston, Rhode Island,
and Skagit County, Washington; $2,000,000 shall be awarded to First Book
for literacy programs; $1,750,000 shall be awarded to the Whitaker
Center for Science and the Arts, Harrisburg, Pennsylvania for teaching
of science education using the arts; $350,000 shall be awarded to the
School of Education at the University of Montana and the Montana Board
of Crime Control for community-based initiatives to promote non-violent
behavior in schools; $1,000,000 shall be awarded to the NetDay
organization to assist schools in connecting K-12 classrooms to the
Internet; $1,000,000 shall be awarded to the National Museum of Women in
the Arts; $1,000,000 shall be awarded to Youth Friends of Kansas City to
improve attendance and academic performance; $750,000 shall be awarded
to the Thornberry Center for Youth and Families, Kansas City, Missouri
to assist at-risk children; $400,000 shall be for Bay Shore, New York
for Literacy Education and Assessment Partnerships; $1,150,000 shall be
awarded to provide technology assistance and for operation of a math/
science learning center in Perry County, Kentucky; $100,000 shall be for
Presidio School District, Texas for library equipment and materials;
$1,200,000 shall be for the Southeastern Pennsylvania Consortium for
Higher Education; $1,000,000 shall be for the Dowling College Global
Learning Center at the former LaSalle Academy in New York for a master
teacher training and education center; $10,000,000 for continuing a
demonstration of public school facilities repair and construction to the
Iowa Department of Education; and $1,000,000 shall be awarded to the
Hechkscher Museum of Art, Long Island, New York for incorporating arts
into education curriculum: Provided further, That of the amount provided
for part I of title X of the Elementary and Secondary Education Act of
1965, $500,000 shall be for after school programs for the Chippewa Falls
Area United School System, Wisconsin; $400,000 shall be for after-school
programs for the Wausau School System, Wisconsin; $350,000 shall be for
the New Rochelle School System, New York, after-school programs;
$100,000 shall be for the New York Hall of Science, Queens, New York,
after-school program; $25,000 shall be for Louisville Central Community
Centers Youth Education Program to support after-school programming;
$25,000 shall be for Canaan's Community Development Corporation in
Louisville, Kentucky for the Village Learning Center after-school
program; $300,000 shall be for the Bay Shore Community Learning Wellness
and Fitness Center for Drug Free Lifestyles in Bay Shore, New York;
$2,500,000 shall be for an after school anti-drug pilot program in the
Chicago Public Schools; and $400,000 shall be for the Green Bay,
Wisconsin Public School System after school program:] Provided further,
That [$10,000,000] $55,000,000 of the funds provided for the national
education research institutes shall be allocated notwithstanding
[section] sections 912(m)(1)(B)--(F) and 931(c)(2)(B)--(C) of Public
Law 103-227. (Department of Education Appropriations Act, 1999, as
included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
Research, development and dissemination:

00.01 National education research
institutes.................... 54 64 109
00.02 Regional educational
laboratories.................. 56 61 65
00.03 National dissemination
activities.................... 19 19 24
00.04 Statistics........................ 59 68 78
00.05 Assessment........................ 35 40 44
00.06 Eisenhower professional
development federal activities.. 23 23 30
00.07 Fund for the improvement of
education....................... 96 159 140
00.08 Javits gifted and talented
education....................... 6 6 6
00.09 Eisenhower regional mathematics
and science education consortia. 15 15 17
00.10 21st Century community learning
centers......................... 40 200
00.11 National writing project.......... 5 7 10
00.12 Civic education................... 6 8 10
00.13 International education exchange.. 5 7 7
--------- --------- ----------
01.00 Total direct program............ 419 677 540
09.01 Reimbursable program.............. 6
--------- --------- ----------
10.00 Total new obligations........... 425 677 540
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 12
22.00 New budget authority (gross)...... 437 665 540
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 437 677 540
23.95 Total new obligations............. -425 -677 -540
24.40 Unobligated balance available, end
of year......................... 12
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 431 665 540
Permanent:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 6
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 437 665 540
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 610 496 643
73.10 Total new obligations............. 425 677 540
73.20 Total outlays (gross)............. -520 -530 -659
73.40 Adjustments in expired accounts... -19
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 496 643 524
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 63 151 156
86.93 Outlays from current balances..... 455 375 503
86.97 Outlays from new permanent
authority....................... 2
86.98 Outlays from permanent balances... 3 1
--------- --------- ----------
87.00 Total outlays (gross)........... 520 530 659
----------------------------------------------------------------------------

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.................. 431 665 540

[[Page 384]]

90.00 Outlays........................... 514 530 659
---------------------------------------------------------------------------
Note.--Excludes $600 million in budget authority in 2000 for 21st
Century community learning centers transferred to the Education Reform
account. Comparable amounts for 1998 ($40 million) and 1999 ($200 million)
are included above.

Research, development, and dissemination.--
National education 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, with particular emphasis on interagency
collaboration. The National Education Research Institutes are
included in the 21st Century Research Fund.
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. Funds also support a coordinated program of statistical
services to assist States in the development of comparable databases 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 Federal activities.--Funds
support activities to promote excellence in teaching by improving
professional development in the core subject areas and disseminating
information on effective programs and practices. Such activities include
new projects in the America Counts national mathematics initiative as
well as continued support for the Eisenhower National Mathematics and
Science Clearinghouse and the National Board for Professional Teaching
Standards.

Fund for the improvement of education (FIE).--Funds support
nationally significant projects to improve the quality of education,
assist all students to meet challenging standards, and contribute to
achievement of the National Education Goals. Included under FIE are
funds supporting the comprehensive school reform demonstration program
that allow non-title I schools to participate.

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.

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, and to
support the production and distribution of a CD ROM product that
complements the ``We the People'' curriculum.

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. Funds are also used to
conduct a civic education program with Northern Ireland and the Republic
of Ireland.

Object Classification (in millions of dollars)

Direct obligations:

11.3 Personnel compensation: Other
than full-time permanent...... 1 1 1
24.0 Printing and reproduction....... 2 3 3
25.1 Advisory and assistance services 14 14 14
25.2 Other services.................. 44 54 75
25.3 Purchases of goods and services
from Government accounts...... 13 13 13
25.5 Research and development
contracts..................... 85 109 133
25.7 Operation and maintenance of
equipment..................... 6 7 7
31.0 Equipment....................... 1 1 1
41.0 Grants, subsidies, and
contributions................. 253 475 293
--------- --------- ----------
99.0 Subtotal, direct obligations.. 419 677 540
99.0 Reimbursable obligations.......... 6
--------- --------- ----------
99.9 Total new obligations........... 425 677 540
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-1100-0-1-503 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 13 15 15
---------------------------------------------------------------------------

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, [$362,000,000] $386,000,000. (Department of Education
Appropriations Act, 1999, as included in Public Law 105-277, section
101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct program.................... 340 362 386
00.02 Y2K Activities.................... 1 3
09.01 Reimbursable program.............. 1 1 1
--------- --------- ----------
10.00 Total new obligations........... 342 366 387
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 342 366 387
23.95 Total new obligations............. -342 -366 -387
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 341 362 386
42.00 Transferred from other accounts. 3
--------- --------- ----------
43.00 Appropriation (total)......... 341 365 386
Permanent:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 1 1 1
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 342 366 387
----------------------------------------------------------------------------

[[Page 385]]

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 119 128 120
73.10 Total new obligations............. 342 366 387
73.20 Total outlays (gross)............. -328 -374 -380
73.40 Adjustments in expired accounts... -5
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 128 120 126
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 247 276 292
86.93 Outlays from current balances..... 72 94 85
86.97 Outlays from new permanent
authority....................... 1
86.98 Outlays from permanent balances... 8 4 2
--------- --------- ----------
87.00 Total outlays (gross)........... 328 374 380
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

Net budget authority and outlays:
89.00 Budget authority.................. 341 365 386
90.00 Outlays........................... 327 373 379
---------------------------------------------------------------------------

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, and costs
for the Year 2000 computer conversion process.

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; information technology services;
personnel management; budget formulation and execution; program
evaluation; legal services; congressional and public relations; and
intergovernmental affairs.

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

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

Object Classification (in millions of dollars)

Direct obligations:

Personnel compensation:
11.1 Full-time permanent........... 134 159 170
11.3 Other than full-time permanent 22 10 10
11.5 Other personnel compensation.. 3 3 3
--------- --------- ----------
11.9 Total personnel compensation 159 172 183
12.1 Civilian personnel benefits..... 32 37 40
21.0 Travel and transportation of
persons....................... 7 7 8
23.1 Rental payments to GSA.......... 22 24 25
23.3 Communications, utilities, and
miscellaneous charges......... 13 15 18
24.0 Printing and reproduction....... 6 7 3
25.1 Advisory and assistance services 6 5 5
25.2 Other services.................. 26 23 30
25.3 Purchases of goods and services
from Government accounts...... 7 7 6
25.7 Operation and maintenance of
equipment..................... 47 52 56
26.0 Supplies and materials.......... 3 3 3
31.0 Equipment....................... 11 12 8
32.0 Land and structures............. 2 1 1
--------- --------- ----------
99.0 Subtotal, direct obligations.. 341 365 386
99.0 Reimbursable obligations.......... 1 1 1
--------- --------- ----------
99.9 Total new obligations........... 342 366 387
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0800-0-1-503 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 2,610 2,712 2,753
---------------------------------------------------------------------------

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, [$66,000,000] $73,262,000. (Department of Education Appropriations
Act, 1999, as included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Civil rights...................... 61 66 73
--------- --------- ----------
10.00 Total new obligations........... 61 66 73
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 62 66 73
23.95 Total new obligations............. -61 -66 -73
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 62 66 73
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 6 17 12
73.10 Total new obligations............. 61 66 73
73.20 Total outlays (gross)............. -50 -71 -70
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 17 12 15
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 47 56 60
86.93 Outlays from current balances..... 3 15 10
--------- --------- ----------
87.00 Total outlays (gross)........... 50 71 70
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 62 66 73
90.00 Outlays........................... 50 71 70
---------------------------------------------------------------------------

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

Object Classification (in millions of dollars)

Personnel compensation:

11.1 Full-time permanent............. 36 40 42
11.3 Other than full-time permanent.. 2 2 2
--------- --------- ----------
11.9 Total personnel compensation.. 38 42 44
12.1 Civilian personnel benefits....... 8 9 9
21.0 Travel and transportation of
persons......................... 1 1 1
23.1 Rental payments to GSA............ 4 5 5
23.3 Communications, utilities, and
miscellaneous charges........... 1 2 2

[[Page 386]]

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....................... 2 3 6
26.0 Supplies and materials............ 1
31.0 Equipment......................... 3 2 3
--------- --------- ----------
99.0 Subtotal, direct obligations.. 60 66 72
99.5 Below reporting threshold......... 1 1
--------- --------- ----------
99.9 Total new obligations........... 61 66 73
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0700-0-1-751 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 685 724 724
---------------------------------------------------------------------------

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, [$31,242,000] $34,000,000. (Department of Education Appropriations
Act, 1999, as included in Public Law 105-277, section 101(f).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Inspector General................. 30 31 34
--------- --------- ----------
10.00 Total new obligations........... 30 31 34
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 30 31 34
23.95 Total new obligations............. -30 -31 -34
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 30 31 34
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 5 11 6
73.10 Total new obligations............. 30 31 34
73.20 Total outlays (gross)............. -24 -36 -33
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 11 6 7
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 20 26 28
86.93 Outlays from current balances..... 4 10 5
--------- --------- ----------
87.00 Total outlays (gross)........... 24 36 33
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 30 31 34
90.00 Outlays........................... 24 36 33
---------------------------------------------------------------------------

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

Object Classification (in millions of dollars)

Personnel compensation:

11.1 Full-time permanent............. 16 17 18
11.3 Other than full-time permanent.. 1 1 1
11.5 Other personnel compensation.... 1 1 1
--------- --------- ----------
11.9 Total personnel compensation.. 18 19 20
12.1 Civilian personnel benefits....... 4 4 5
21.0 Travel and transportation of
persons......................... 2 2 2
23.1 Rental payments to GSA............ 2 2 2
23.3 Communications, utilities, and
miscellaneous charges........... 1
25.1 Advisory and assistance services.. 1 1 1
25.3 Purchases of goods and services
from Government accounts........ 1 1 1
25.7 Operation and maintenance of
equipment....................... 1 1 1
31.0 Equipment......................... 1 1
--------- --------- ----------
99.0 Subtotal, direct obligations.. 29 31 34
99.5 Below reporting threshold......... 1
--------- --------- ----------
99.9 Total new obligations........... 30 31 34
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-1400-0-1-751 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 279 285 285
---------------------------------------------------------------------------

Headquarters Renovation

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1500-0-1-503 1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total new obligations (object
class 25.2)..................... 1
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 1
23.95 Total new obligations............. -1
----------------------------------------------------------------------------

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

Outlays (gross), detail:
86.93 Outlays from current balances..... 3 2
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 3 2
---------------------------------------------------------------------------

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

GENERAL FUND RECEIPT ACCOUNTS

(in millions of dollars)

----------------------------------------------------------------------------
1998 actual 1999 est. 2000 est.
----------------------------------------------------------------------------
Offsetting receipts from the public:
91-022100 FFEL Guarantee agency
reserve recoveries: Legislative
proposal, subject to PAYGO.......... 142 103

[[Page 387]]

91-291500 Repayment of loans, capital
contributions, higher education
activities, Education............... 50 50
--------- --------- ----------
General Fund Offsetting receipts from
the public............................. 192 153
---------------------------------------------------------------------------

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.

[National Testing]

[Sec. 305. (a) In General.--Part C of the General Education
Provisions Act (20 U.S.C. 1231 et seq.) is amended by adding at the end
the following:

``SEC. 447. PROHIBITION ON FEDERALLY SPONSORED TESTING.

``(a) General Prohibition.--Notwithstanding any other provision of
Federal law and except as provided in subsection (b), no funds provided
to the Department of Education or to an applicable program, may be used
to pilot test, field test, implement, administer or distribute in any
way any federally sponsored national test in reading, mathematics, or
any other subject that is not specifically and explicitly provided for
in authorizing legislation enacted into law.
``(b) Exceptions.--Subsection (a) shall not apply to the Third
International Mathematics and Science Study or other international
comparative assessments developed under the authority of section
404(a)(6) of the National Education Statistics Act of 1994 (20 U.S.C.
9003(a)(6) et seq.) and administered to only a representative sample of
pupils in the United States and in foreign nations.''.
(b) Authority of National Assessment Governing Board.--Subject to
section 447 of the General Education Provisions Act, the exclusive
authority over the direction and all policies and guidelines for
developing voluntary national tests pursuant to contract RJ97153001
previously entered into between the United States Department of
Education and the American Institutes for Research and executed on
August 15, 1997, and subsequently modified by the National Assessment
Governing Board on February 11, 1998, shall continue to 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).
(c) Studies.--
(1) Purpose, definition, and achievement levels.--The National
Assessment Governing Board shall determine and clearly articulate in
a report the purpose and intended use of any proposed federally
sponsored national test. Such report shall also include--
(A) a definition of the meaning of the term
``voluntary'' in regards to the administration of any
national test; and
(B) a description of the achievement levels and
reporting methods to be used in grading any national test.
The report shall be submitted to the White House, the Committees
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 30, 1999.
(2) Response to report.--The National Assessment Governing Board
shall develop and submit to the entities identified in paragraph (1)
a report, not later than September 30, 1999, that addresses and
responds to the findings reported by the National Academy of
Sciences in the report entitled ``Grading the Nation's Report Card:
Evaluating NAEP and transforming the Assessment of Educational
Progress'' that assert that the achievement levels of the National
Assessment of Educational Progress (NAEP) are fundamentally flawed.
(3) Technical feasibility.--The National Academy of Sciences
shall conduct a study regarding the technical feasibility, validity,
and reliability of including test items from the National Assessment
of Educational Progress (NAEP) for 4th grade reading and 8th grade
mathematics or from other tests in State and district assessments
for the purpose of providing a common measure of individual student
performance. The National Academy of Sciences shall submit, to the
entities identified under paragraph (1), an interim progress report
not later than June 30, 1999 and a final report not later than
September 30, 1999.]
[Sec. 306. 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.]
[Sec. 307. (a) From the amount appropriated for title VI of the
Elementary and Secondary Education Act of 1965 in accordance with this
section, the Secretary of Education--
(1) shall make available a total of $6,000,000 to the Secretary
of the Interior (on behalf of the Bureau of Indian Affairs) and the
outlying areas for activities under this section; and
(2) shall allocate the remainder by providing each State the
greater of the amount the State would receive if a total of
$1,124,620,000 were allocated under section 1122 of the Elementary
and Secondary Education Act of 1965 or under section 2202(b) of the
Act for fiscal year 1998, except that such allocations shall be
ratably increased or decreased as may be necessary.
(b)(1) Each State that receives funds under this section shall
distribute 100 percent of such funds to local educational agencies, of
which--
(A) 80 percent of such amount shall be allocated to such local
educational agencies in proportion to the number of children, aged 5
to 17, who reside in the school district served by such local
educational agency from families with incomes below the poverty line
(as defined by the Office of Management and Budget and revised
annually in accordance with section 673(2) of the Community Services
Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the
size involved for the most recent fiscal year for which satisfactory
data is available compared to the number of such individuals who
reside in the school districts served by all the local educational
agencies in the State for that fiscal year; and
(B) 20 percent of such amount shall be allocated to such local
educational agencies in accordance with the relative enrollments of
children, aged 5 to 17, in public and private nonprofit elementary
and secondary schools within the boundaries of such agencies;
(2) Notwithstanding paragraph (1), if the award to a local
educational agency under this section is less than the starting salary
for a new teacher in that agency, the State shall not make the award
unless the local educational agency agrees to form a consortium with not
less than 1 other local educational agency for the purpose of reducing
class size.
(c)(1) Each local educational agency that receives funds under this
section shall use such funds to carry out effective approaches to

[[Page 388]]

reducing class size with highly qualified teachers to improve
educational achievement for both regular and special-needs children,
with particular consideration given to reducing class size in the early
elementary grades for which some research has shown class size reduction
is most effective.
(2)(A) Each such local educational agency may pursue the goal of
reducing class size through--
(i) recruiting, hiring, and training certified regular and
special education teachers and teachers of special-needs children,
including teachers certified through State and local alternative
routes;
(ii) testing new teachers for academic content knowledge, and to
meet State certification requirements that are consistent with title
II of the Higher Education Act of 1965; and
(iii) providing professional development to teachers, including
special education teachers and teachers of special-needs children,
consistent with title II of the Higher Education Act of 1965.
(B) A local educational agency may use not more than a total of 15
percent of the award received under this section for activities
described in clauses (ii) and (iii) of subparagraph (A).
(C) A local educational agency that has already reduced class size
in the early grades to 18 or less children may use funds received under
this section--
(i) to make further class-size reductions in grades 1 through 3;
(ii) to reduce class size in kindergarten or other grades; or
(iii) to carry out activities to improve teacher quality,
including professional development.
(3) Each such agency shall use funds under this section only to
supplement, and not to supplant, State and local funds that, in the
absence of such funds, would otherwise be spent for activities under
this section.
(4) No funds made available under this section may be used to
increase the salaries or provide benefits, other than participation in
professional development and enrichment programs, to teachers who are,
or have been, employed by the local educational agency.
(d)(1) Each State receiving funds under this section shall report on
activities in the State under this section, consistent with section
6202(a)(2) of the Elementary and Secondary Education Act of 1965.
(2) Each school benefiting from this section, or the local
educational agency serving that school, shall produce an annual report
to parents, the general public, and the State educational agency, in
easily understandable language, on student achievement that is a result
of hiring additional highly qualified teachers and reducing class size.
(e) If a local educational agency uses funds made available under
this section for professional development activities, the agency shall
ensure for the equitable participation of private nonprofit elementary
and secondary schools in such activities. Section 6402 of the Elementary
and Secondary Education Act of 1965 shall not apply to other activities
under this section.
(f) Administrative Expenses.--A local educational agency that
receives funds under this section may use not more than 3 percent of
such funds for local administrative costs.
(g) Request for Funds.--Each local educational agency that desires
to receive funds under this section shall include in the application
required under section 6303 of the Elementary and Secondary Education
Act of 1965 a description of the agency's program to reduce class size
by hiring additional highly qualified teachers.] (Department of
Education Appropriations Act, 1999, as included in Public Law 105-277,
section 101(f).)