Appendix - Department of Education

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

THE BUDGET FOR FISCAL YEAR 2002

DEPARTMENT OF EDUCATION

OFFICE OF ELEMENTARY AND SECONDARY EDUCATION

Federal Funds

General and special funds:

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 of 1965,
$30,000,000: Provided, That the budget authority (but not the outlays)
for $6,758,300,000 provided under this heading in fiscal year 2001, to
be available as an advance appropriation in fiscal year 2002, and the
budget authority (but not the outlays) for $195,000,000 provided under
the heading, ``Reading Excellence'' in fiscal year 2001, to be available
as an advance appropriation in fiscal year 2002, shall be considered
direct spending in fiscal year 2002 for purposes of the Balanced Budget
and Emergency Deficit Control Act of 1990, as amended, and section 2(a)
of Public Law 106-554: Provided further, That under this heading in the
Department of Education Appropriations Act, 2001, as enacted by section
1(a)(1) of P.L. 106-554, to carry out section 1124 of the Elementary and
Secondary Education Act, delete ``$7,332,721,000'' and insert in lieu
thereof, ``$7,237,721,000'' [$9,532,621,000, of which $2,731,921,000
shall become available on July 1, 2001, and shall remain available
through September 30, 2002, and of which $6,758,300,000 shall become
available on October 1, 2001 and shall remain available through
September 30, 2002, for academic year 2001-2002: Provided, That
$7,332,721,000 shall be available for basic grants under section 1124:
Provided further, That $225,000,000 of these funds shall be allocated
among the States in the same proportion as funds are allocated among the
States under section 1122, to carry out section 1116(c): Provided
further, That 100 percent of these funds shall be allocated by states to
local educational agencies for the purposes of carrying out section
1116(c): Provided further, That all local educational agencies receiving
an allocation under the preceding proviso, and all other local
educational agencies that are within a State that receives funds under
part A of title I of the Elementary and Secondary Education Act of 1965
(other than a local educational agency within a State receiving a
minimum grant under section 1124(d) or 1124A(a)(1)(B) of such Act),
shall provide all students enrolled in a school identified under section
1116(c) with the option to transfer to another public school within the
local educational agency, including a public charter school, that has
not been identified for school improvement under section 1116(c), unless
such option to transfer is prohibited by State law, or local law, which
includes school board-approved local educational agency policy: Provided
further, That if the local educational agency demonstrates to the
satisfaction of the State educational agency that the local educational
agency lacks the capacity to provide all students with the option to
transfer to another public school, and after giving notice to the
parents of children affected that it is not possible, consistent with
State and local law, to accommodate the transfer request of every
student, the local educational agency shall permit as many students as
possible (who shall be selected by the local educational agency on an
equitable basis) to transfer to a public school that has not been
identified for school improvement under section 1116(c): Provided
further, That up to $3,500,000 of these funds shall be available to the
Secretary on October 1, 2000, to obtain updated local educational agency
level census poverty data from the Bureau of the Census: Provided
further, That $1,364,000,000 shall be available for concentration grants
under section 1124A: Provided further, That grant awards under sections
1124 and 1124A of title I of the Elementary and Secondary Education Act
of 1965 shall be not less than the greater of 100 percent of the amount
each State and local educational agency received under this authority
for fiscal year 2000 or the amount such State and local educational
agency would receive if $6,883,503,000 for Basic Grants and
$1,222,397,000 for Concentration Grants were allocated in accordance
with section 1122(c)(3) of title I: Provided further, That
notwithstanding any other provision of law, grant awards under section
1124A of title I of the Elementary and Secondary Education Act of 1965
shall be made to those local educational agencies that received a
Concentration Grant under the Department of Education Appropriations
Act, 2000, but are not eligible to receive such a grant for fiscal year
2001: Provided further, That the Secretary shall not take into account
the hold harmless provisions in this section in determining State
allocations under any other program administered by the Secretary in any
fiscal year: Provided further, That $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 $210,000,000 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 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]. (Department of Education Appropriations Act,
2001, as enacted by section 1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
Direct program:

Grants to local educational
agencies:
00.01 Basic grants.................. 6,771 6,929 5,408
00.02 Concentration grants.......... 1,147 1,148 1,350
00.03 Capital expenses................ 14 6
00.04 Even start...................... 149 255
00.05 State agency programs........... 397 432
00.06 Evaluation...................... 9 9
00.07 Demonstrations of comprehensive
school reform................. 171 211
00.08 Migrant education projects...... 22 30 30
--------- --------- ----------
10.00 Total new obligations........... 8,680 9,020 6,788
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 16 41
22.00 New budget authority (gross)...... 8,701 8,979 6,788
22.10 Resources available from
recoveries of prior year
obligations..................... 4
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 8,721 9,020 6,788
23.95 Total new obligations............. -8,680 -9,020 -6,788
24.40 Unobligated balance carried
forward, end of year............ 41
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 2,496 2,774 30
55.00 Advance appropriation........... 6,205 6,205
Mandatory:

65.00 Advance appropriation........... 6,758
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 8,701 8,979 6,788
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 3,472 3,616 4,165
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 3,472 3,616 4,165
73.10 Total new obligations............. 8,680 9,020 6,788
73.20 Total outlays (gross)............. -8,529 -8,471 -8,846
73.40 Adjustments in expired accounts
(net)........................... -3
73.45 Recoveries of prior year
obligations..................... -4
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 3,616 4,165 2,107
--------- --------- ----------
74.99 Obligated balance, end of year 3,616 4,165 2,107
----------------------------------------------------------------------------

[[Page 346]]

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 5,545 5,441 5,408
86.93 Outlays from discretionary
balances........................ 2,984 3,030 3,439
--------- --------- ----------
87.00 Total outlays (gross)........... 8,529 8,471 8,846
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 8,701 8,979 6,788
90.00 Outlays........................... 8,529 8,471 8,846
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

2000 actual 2001 est. 2002 est.
Enacted/requested:
Budget Authority.................. 8,701 8,979 6,788
Outlays........................... 8,529 8,471 8,847
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 10,981
Outlays........................... 549
------------------------------------
Total:
Budget Authority.................. 8,701 8,979 17,769
Outlays........................... 8,529 8,471 9,396
====================================

SUMMARY OF PROGRAM LEVEL

(in millions of dollars)

2000-2001
academic
year 2001-2002
academic year 2002-2003
academic year
New Budget Authority................ 2,496 2,774 11,011
Advance appropriation............... 6,205 6,758
------------------------------------
Total program level........... 8,701 9,533 11,011
====================================
Change in advance appropriation from
the previous year................... +553 -6,758

The Administration proposes to reverse the misleading budget
practice of using advance appropriations simply to avoid spending
limitations. Accordingly, the amount requested to be appropriated for
2002 is sufficient to provide normal funding and no advance
appropriation for 2003 is requested. In order to avoid overstating
discretionary budget authority in 2002, language is proposed to
designate the advance appropriation budget authority amount as direct
spending.

Title I programs.--The Administration is working with Congress to
develop legislation reauthorizing programs included in the Elementary
and Secondary Education Act. When new authorizing legislation is
enacted, resources for the affected programs will be requested. See the
``Legislative proposal, not subject to PAYGO'' schedule for additional
details.

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 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 10 11
25.2 Other services.................... 9 9
25.3 Purchases of goods and services
from Government accounts........ 5 6
41.0 Grants, subsidies, and
contributions................... 8,656 8,994 6,788
--------- --------- ----------
99.9 Total new obligations........... 8,680 9,020 6,788
---------------------------------------------------------------------------

Education for the Disadvantaged

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
Direct program:

Grants to local educational
agencies:
00.01 Basic grants.................. 7,238
00.02 Concentration grants.......... 1,364
00.03 Targeted Grants............... 459
00.04 Even start...................... 250
00.05 Reading first State grants...... 900
00.06 Early reading first............. 75
00.07 State agency programs........... 426
00.08 Evaluation...................... 9
00.09 Demonstrations of comprehensive
school reform................. 260
--------- --------- ----------
10.00 Total new obligations........... 10,981
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 10,981
23.95 Total new obligations............. -10,981
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 10,981
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 10,981
73.20 Total outlays (gross)............. -549
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 10,432
--------- --------- ----------
74.99 Obligated balance, end of year 10,432
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 549
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 10,981
90.00 Outlays........................... 549
---------------------------------------------------------------------------

The resources in this schedule are proposed for later transmittal
under proposed legislation to revise and reauthorize programs currently
authorized under the Elementary and Secondary Education Act of 1965.

Grants to local education agencies.--Funds are allocated through
Basic, Concentration, and Targeted Grants formulas for local programs
that provide extra academic support to help raise the achievement of
disadvantaged students eligible for services. States will annually
assess all students in grades 3-8 in at least reading and mathematics.
School districts will use the assessment results to immediately
identify, and provide assistance to, low-performing Title I schools;
after two years of school failure, those schools would be subject to
progressively stronger corrective measures and students would have the
option of attending another public school. Following three years of poor
performance, the program would provide funds to help students transfer
to a higher-performing public or private school, or to obtain
supplemental educational services.

Even start.--Funds support formula grants to States, which award
grants for local projects to partnerships of local educational agencies
and other organizations to operate projects integrating early childhood
education, adult literacy, parenting education, and interactive literacy
activities between parents and their children into ``family literacy''
programs for low-income families with children under age seven.

Reading first State grants.--Funds provide assistance to State and
local educational agencies in establishing reading programs for students
in grades K-3 that are grounded in scientifically based reading
research, in order to ensure that every student can read at grade level
or above by the third grade.

[[Page 347]]

Early reading first.--Funds provide assistance to support local
efforts, through competitive grants, to enhance the school readiness of
young children, particularly those from low-income families, through
scientific, research-based strategies and professional development that
are designed to enhance the verbal skills, phonological awareness,
letter knowledge, pre-reading skills, and early language development of
children ages three through five.

State agency migrant program.--Funds support formula grants to
States for educational services to children of migratory farmworkers and
fishers, with resources and services focused on children who have moved
within the past 36 months.

State agency neglected and delinquent program.--Funds support
formula grants to States for educational services to children and youth
under age 21 in State neglected, delinquent, or adult correction
facilities.

Evaluation.--Funds support national activities to evaluate Title I
programs and a national assessment of the program's effectiveness in
helping States, school districts, and schools raise the overall
achievement of disadvantaged students and narrow the achievement gap.

Demonstrations of comprehensive school reform.--Funds support
formula grants 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.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0900-2-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 16
25.2 Other services.................... 14
25.3 Purchases of goods and services
from Government accounts........ 8
41.0 Grants, subsidies, and
contributions................... 10,943
--------- --------- ----------
99.9 Total new obligations........... 10,981
---------------------------------------------------------------------------

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, [$993,302,000] $1,130,500,000, of which
$882,000,000 shall be for basic support payments under section 8003(b),
$50,000,000 shall be for payments for children with disabilities under
section 8003(d), [$12,802,000] $150,000,000 shall be for formula grants
for construction under section [8007] 8007(a), $40,500,000 shall be for
Federal property payments under section 8002, and $8,000,000, to remain
available until expended, shall be for facilities maintenance under
section 8008[: Provided, That $6,802,000 of the funds for section 8007
shall be available for the local educational agencies and in the amounts
specified in the statement of the managers on the conference report
accompanying this Act: Provided further, That from the amount
appropriated for section 8002, the Secretary shall treat as timely
filed, and shall process for payment, an application for a fiscal year
1999 payment from Academy School District 20, Colorado, under that
section if the Secretary has received that application not later than 30
days after the enactment of this Act: Provided further, That the
Secretary of Education shall consider the local educational agency
serving the Kadoka School District, 35-1, in South Dakota, eligible for
payments under section 8002 for fiscal year 2001 and each succeeding
fiscal year, with respect to land in Washabaugh and Jackson Counties,
South Dakota, that is owned by the Department of Defense and used as a
bombing range: Provided further, That from the amount appropriated for
section 8002, the Secretary shall first increase the payment of any
local educational agency that was denied funding or had its payment
reduced under that section for fiscal year 1998 due to section
8002(b)(1)(C) to the amount that would have been made without the
limitation of that section: Provided further, That from the amount
appropriated for section 8002, $500,000 shall be for subsection
8002(j)]. (Department of Education Appropriations Act, 2001, as enacted
by section 1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0102-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
Payments for federally connected children:

00.01 Basic support payments.......... 737 882 882
00.02 Supplemental payments for
children with disabilities.... 50 50 50
00.03 Payments for heavily impacted
districts..................... 74 5
--------- --------- ----------
00.91 Subtotal, payments for federally
connected children............ 861 937 932
01.01 Facilities maintenance............ 6 11 11
02.01 Construction...................... 7 6 150
03.01 Payments for Federal property..... 32 40 40
04.01 Construction earmarks............. 3 7
05.01 Old construction (P.L. 81-815).... 1
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 910 1,001 1,133
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 24 14 5
22.00 New budget authority (gross)...... 906 993 1,130
22.10 Resources available from
recoveries of prior year
obligations..................... 7
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 937 1,007 1,135
23.95 Total new obligations............. -910 -1,001 -1,133
23.98 Unobligated balance expiring or
withdrawn....................... -15
24.40 Unobligated balance carried
forward, end of year............ 14 5 2
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 910 993 1,130
40.76 Reduction pursuant to P.L. 106-
113........................... -4
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 906 993 1,130
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 249 266 128
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 249 266 128
73.10 Total new obligations............. 910 1,001 1,133
73.20 Total outlays (gross)............. -877 -1,140 -1,114
73.40 Adjustments in expired accounts
(net)........................... -9
73.45 Recoveries of prior year
obligations..................... -7
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 266 128 148
--------- --------- ----------
74.99 Obligated balance, end of year 266 128 148
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 792 887 1,011
86.93 Outlays from discretionary
balances........................ 85 253 103
--------- --------- ----------
87.00 Total outlays (gross)........... 877 1,140 1,114
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 906 993 1,130
90.00 Outlays........................... 877 1,140 1,114
---------------------------------------------------------------------------

Impact Aid helps to replace the lost local revenue that would
otherwise be available to educate federally connected children. The
presence of certain students living on Federal property, such as
students who are military dependents or who reside on Indian lands,
places a financial burden on local educational agencies that educate
them. The property on which the children live or their parents work is
exempt from local property taxes, denying local educational agencies
access to the primary source of revenue used by most communities to
finance education.

Basic support payments.--Payments will be made on behalf of
approximately 1.2 million federally connected students enrolled in about
1,360 local educational agencies to assist them in meeting their
operation and maintenance costs. Average per-student payments will be
approximately $750.

Payments for Children with Disabilities.--Payments in addition to
those provided under the Individuals with Disabilities

[[Page 348]]

Education Act will be provided on behalf of approximately 53,000
federally connected students with disabilities in about 830 local
educational agencies. Average per-student payments will be approximately
$940.

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

Construction.--Formula payments will be provided to approximately
155 local educational agencies with large proportions of federally
connected students. Payments will be made on behalf of about 135,000
students who are military dependents or who reside on Indian lands.

Payments for Federal Property.--Payments are made to approximately
250 local educational agencies in which real property owned by the
Federal Government represents 10 percent or more of the assessed value
of real property in the local educational agency.

School Improvement Programs

For carrying out school improvement activities authorized by [titles
II, IV, V-A and B, VI, IX, X, and XIII] title X-C of the Elementary and
Secondary Education Act of 1965 (``ESEA''); [the McKinney-Vento Homeless
Assistance Act; and] the Civil Rights Act of 1964 and part B of title
VIII of the Higher Education Amendments of 1998, $229,334,000: Provided,
That the budget authority (but not the outlays) for $1,765,000,000
provided under this heading in fiscal year 2001, to be available as an
advance appropriation in fiscal year 2002, shall be considered direct
spending in fiscal year 2002 for purposes of the Balanced Budget and
Emergency Deficit Control Act of 1990, as amended, and section 2(a) of
Public Law 106-554; [$4,872,084,000, of which $2,403,750,000 shall
become available on July 1, 2001, and remain available through September
30, 2002, and of which $1,765,000,000 shall become available on October
1, 2001 and shall remain available through September 30, 2002 for
academic year 2001-2002: Provided, That $485,000,000 shall be available
for Eisenhower professional development State grants under part B of
title II of the Elementary and Secondary Education Act of 1965: Provided
further, That each local educational agency shall use funds in excess of
the allocation it received under such part for the preceding fiscal year
to improve teacher quality by reducing the percentage of teachers who do
not have State certification or are certified through emergency or
provisional means; are teaching out of field in some or all of the
subject areas and grade levels in which they teach; or who lack
sufficient content knowledge to teach effectively in the areas they
teach to obtain that knowledge: Provided further, That the local
educational agency may also use such excess funds for: activities
authorized under section 2210 of the Elementary and Secondary Education
Act of 1965; mentoring programs for new teachers; providing
opportunities for teachers to attend multi-week institutes, such as
those provided in the summer months, that provide intensive professional
development in partnership with local educational agencies; and carrying
out initiatives to promote the retention of highly qualified teachers
who have a record of success in helping low-achieving students improve
their academic success: Provided further, That each State educational
agency may use such excess funds to carry out activities under section
2207 of the Elementary and Secondary Education Act of 1965: Provided
further, That each State agency for higher education may use such excess
funds to carry out activities under section 2211 of the Elementary and
Secondary Education Act of 1965: Provided further, That both State
educational agencies and State agencies for higher education may also
use such excess funds for multi-week institutes, such as those provided
in the summer months, that provide intensive professional development in
partnership with local educational agencies; and grants to partnerships
of such entities as local educational agencies, institutions of higher
education, and private business, to recruit, and prepare, and provide
professional development to, and help retain, school principals and
superintendents, especially for such individuals who serve, or are
preparing to serve, in high-poverty, low-performing schools and local
educational agencies: Provided further, That such activities may be
undertaken in consortium with other States: Provided further, That of
the funds appropriated for part B of title II of the Elementary and
Secondary Education Act of 1965, $45,000,000 shall be available to
States and allocated in accordance with section 2202(b) of that Act
(except that the requirements of section 2203 shall not apply): Provided
further, That notwithstanding any other provision of law, each State
shall use the amount made available under the preceding proviso to
support efforts to meet the requirements for State eligibility for the
Ed-Flex Partnership Act of 1999 or the requirements under section 1111
of title I of the Elementary and Secondary Education Act of 1965:
Provided further, That $44,000,000 shall be available for national
activities under section 2102 of the Elementary and Secondary Education
Act of 1965: Provided further, That of the amount available in the
preceding proviso, $3,000,000 shall be made available to the Secretary
for the Troops-to-Teachers Program for transfer to the Defense Activity
for Non-Traditional Education Support of the Department of Defense:
Provided further, That the funds transferred under the preceding proviso
shall be used by the Secretary of Defense to administer the Troops-to-
Teachers Program, including the selection of participants in the Program
under the Troops-to-Teachers Program Act of 1999 (title XVII of Public
Law 106-65; 20 U.S.C. 9301 et seq.): Provided further, That for purposes
of sections 1702(b) and (c) of the Troops-to-Teachers Program Act of
1999, the Secretary of Education shall be the administering Secretary
and may, at the Secretary's discretion, carry out the activities under
section 1702(c) of that Act and retain a portion of the funds made
available for the Troops-to-Teachers Program to carry out section
1702(b) and (c) of that Act: Provided further, That of the amount made
available under this heading for national activities under section 2102
of the Elementary and Secondary Education Act of 1965, the Secretary is
authorized to use a portion of such funds to carry out activities to
improve the knowledge and skills of early childhood educators and
caregivers who work in urban or rural communities with high
concentrations of young children living in poverty: Provided further,
That of the amount appropriated, $3,208,000,000 shall be for title VI of
the Elementary and Secondary Education Act of 1965 and to carry out
activities under part B of the Individuals with Disabilities Education
Act (20 U.S.C. 1411 et seq.): Provided further, That of the amount made
available for title VI, $1,623,000,000 shall be available,
notwithstanding any other provision of law, in accordance with section
306 of this Act 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: Provided further,
That of the amount made available for title VI, $1,200,000,000 shall be
available, notwithstanding any other provision of law, for grants for
school repair and renovation, activities under part B of the Individuals
with Disabilities Education Act (20 U.S.C. 1411 et seq.), and technology
activities, in accordance with section 321 of this Act: Provided
further, That funds made available under this heading to carry out
section 6301(b) of the Elementary and Secondary Education Act of 1965
shall be available for education reform projects that provide same
gender schools and classrooms, consistent with applicable law: Provided
further, That of the amount made available to carry out activities
authorized under part C of title IX of the Elementary and Secondary
Education Act of 1965, $1,000,000 shall be for the Alaska Humanities
Forum for operation of the Rose student exchange program and $1,000,000
shall be for the Alaska Native Heritage Center to support its program of
cultural education activities: Provided further, That of the amount made
available for subpart 2 of part A of title IV of the Elementary and
Secondary Education Act of 1965, $10,000,000, to remain available until
expended, shall be for Project School Emergency Response to Violence to
provide education-related services to local educational agencies in
which the learning environment has been disrupted due to a violent or
traumatic crisis]. (Department of Education Appropriations Act, 2001, as
enacted by section 1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1000-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Direct program:
Obligations by program activity:

00.01 Eisenhower professional
development State grants...... 335 486
00.02 Innovative education program
strategies State grants....... 80 386 285
00.03 Eisenhower professional
development national
activities.................... 41
00.04 Class size reduction............ 400 1,374 1,150

[[Page 349]]

00.05 School renovation grants........ 1,200
Safe and drug-free schools and
communities:
00.06 State grants.................. 110 442 330
00.07 National programs............. 162 205
00.08 Inexpensive book distribution... 20 23
00.09 Arts in education............... 12 28
00.10 Magnet schools assistance....... 110 110
00.11 Education for homeless children
and youth..................... 29 35
00.12 Women's educational equity...... 3 3
00.13 Training and advisory services.. 7 7 7
00.14 Ellender fellowships............ 2 2
00.15 Education for Native Hawaiians.. 23 28
00.16 Alaska Native education equity.. 13 15
00.17 Charter schools grants.......... 145 190 200
00.18 Advanced placement incentives... 15 22 22
00.19 Comprehensive regional
assistance centers............ 28 28
--------- --------- ----------
01.00 Total direct program.............. 1,494 4,625 1,994
09.01 Reimbursable program.............. 57
--------- --------- ----------
10.00 Total new obligations............. 1,551 4,625 1,994
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 4 6
22.00 New budget authority (gross)...... 1,549 4,619 1,994
22.10 Resources available from
recoveries of prior year
obligations..................... 3
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,556 4,625 1,994
23.95 Total new obligations............. -1,551 -4,625 -1,994
24.40 Unobligated balance carried
forward, end of year............ 6
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 1,512 3,107 229
40.76 Reduction pursuant to P.L. 106-
113........................... -20
41.00 Transferred to other accounts... -3
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 1,492 3,104 229
55.00 Advance appropriation........... 1,515
Mandatory:

65.00 Advance appropriation........... 1,765
Discretionary:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 57
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 1,549 4,619 1,994
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 3,423 2,380 3,906
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 3,423 2,380 3,906
73.10 Total new obligations............. 1,551 4,625 1,994
73.20 Total outlays (gross)............. -2,578 -3,099 -3,611
73.40 Adjustments in expired accounts
(net)........................... -12
73.45 Recoveries of prior year
obligations..................... -3
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 2,380 3,906 2,289
--------- --------- ----------
74.99 Obligated balance, end of year 2,380 3,906 2,289
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 133 1,319 1,247
86.93 Outlays from discretionary
balances........................ 2,445 1,779 2,364
--------- --------- ----------
87.00 Total outlays (gross)........... 2,578 3,099 3,611
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -57
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,492 4,619 1,994
90.00 Outlays........................... 2,521 3,099 3,611
---------------------------------------------------------------------------
Note.--Includes $846 million in budget authority in 2002 for activities
previously financed from the Department of Education:

(In millions of dollars)
2000 actual 2001 est.
Office of Elementary and Secondary
Education, Education Reform............ 453 846

Summary of Budget Authority and Outlays

(in millions of dollars)

2000 actual 2001 est. 2002 est.
Enacted/requested:
Budget Authority.................. 1,492 4,619 1,994
Outlays........................... 2,521 3,098 3,611
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 6,160
Outlays........................... 308
------------------------------------
Total:
Budget Authority.................. 1,492 4,619 8,154
Outlays........................... 2,521 3,098 3,919
====================================

SUMMARY OF PROGRAM LEVEL

(in millions of dollars)

2000-2001
Academic
Year 2001-2002
Academic Year 2002-2003
Academic Year
New Budget Authority................ 3,052 5,391 6,389
Advance Appropriation............... 1,515 1,765
------------------------------------
Total program level........... 4,567 7,156 6,389
====================================
Change in advance appropriation over
previous year....................... +1,515 +250 -1,765

The Administration is working with Congress to develop legislation
reauthorizing programs included in the Elementary and Secondary
Education Act. When new authorizing legislation is enacted, resources
for the affected programs will be requested. See the ``Legislative
proposal, not subject to PAYGO'' schedule for additional details.

Training and advisory services.--Funds support grants 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.

Charter schools grants.--Funds support grants 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.

Advanced placement incentives.--Funds support grants to assist
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)

Direct obligations:

24.0 Printing and reproduction....... 1 2
25.1 Advisory and assistance services 3 3 1
25.2 Other services.................. 27 29 6
25.3 Purchases of goods and services
from Government accounts...... 1 1 1
25.5 Research and development
contracts..................... 1
41.0 Grants, subsidies, and
contributions................. 1,461 4,590 1,986
--------- --------- ----------
99.0 Subtotal, direct obligations.. 1,494 4,625 1,994
99.0 Reimbursable obligations.......... 57
--------- --------- ----------
99.9 Total new obligations........... 1,551 4,625 1,994
---------------------------------------------------------------------------

[[Page 350]]

School Improvement Programs

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

00.01 State grants for improving
teacher quality............... 2,600
00.02 Transition to teaching.......... 30
00.03 Safe and drug free schools...... 644
00.04 21st Century community learning
centers....................... 846
00.05 Educational technology State
grants........................ 817
00.06 Choice and innovation State
grants........................ 472
00.07 State assessments............... 320
00.08 Reform and innovation fund...... 40
00.09 Charter schools homestead fund.. 175
00.10 Magnet schools assistance....... 110
00.11 Education for Native Hawaiians.. 28
00.12 Alaska Native education equity.. 15
00.13 Comprehensive regional
assistance centers............ 28
00.14 Education of homeless children
and youth..................... 35
--------- --------- ----------
01.00 Total direct program.............. 6,160
--------- --------- ----------
10.00 Total new obligations............. 6,160
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 6,160
23.95 Total new obligations............. -6,160
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 6,160
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 6,160
73.20 Total outlays (gross)............. -308
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 5,852
--------- --------- ----------
74.99 Obligated balance, end of year 5,852
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 308
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 6,160
90.00 Outlays........................... 308
---------------------------------------------------------------------------

State grants for improving teacher quality.--Funds support formula
grants to States to provide professional development for teachers and
administrators and to implement other teacher-related reforms.

Transition to teaching.--Funds support efforts to recruit more high-
quality teachers, particularly teachers recruited through the Troops to
Teachers program, into high-poverty local educational agencies.

Safe and drug-free schools.--Funds support formula grants to States
and national activities to provide students with drug- and violence-
prevention programs and to implement strategies to improve school
safety.

21st Century community learning centers.--Funds support formula
grants to States, which award subgrants to centers providing academic
and related services for youth and other members of the community during
after-school, weekend, and summer hours.

Educational technology State grants.--Funds support formula grants
to States, which would target funds to high-poverty and rural schools,
to acquire computers, connections, software, and teacher training to
enable schools to integrate technology effectively into curricula.

Choice and Innovation State grants.--Funds support formula grants to
States to help local educational agencies implement innovative
strategies for improving student achievement, including enhancing school
choice.

State assessments.--Funds support grants to develop and implement
the new assessments that States would use to annually test all children
in grades 3-8 in reading and mathematics.

Reform and innovation fund.--Funds support projects that demonstrate
and develop innovative approaches in priority areas of national
significance, including school choice and character education.

Charter schools homestead fund.--Funds support competitive grants to
public entities, such as State and local governments, nonprofit
entities, and consortia of the two types of entities, to assist charter
schools in acquiring, leasing, and renovating school facilities.

Magnet schools assistance.--Funds support competitive grants to
local educational agencies to establish and operate magnet school
programs that are part of an approved desegregation plan.

Education for Native Hawaiians.--Funds 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.--Funds 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.

Comprehensive regional assistance centers.--Funds support
comprehensive regional technical assistance centers that provide
services to recipients of Federal education funds to improve elementary
and secondary education programs.

Education for homeless children and youth.--Funds support formula
grants to States to provide educational and support services that enable
homeless children and youth to enroll in, attend, and achieve success in
school.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1000-2-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
24.0 Printing and reproduction......... 1
25.1 Advisory and assistance services.. 8
25.2 Other services.................... 7
25.3 Purchases of goods and services
from Government accounts........ 1
41.0 Grants, subsidies, and
contributions................... 6,143
--------- --------- ----------
99.9 Total new obligations........... 6,160
---------------------------------------------------------------------------

Reading Excellence

[For necessary expenses to carry out the Reading Excellence Act,
$91,000,000, which shall become available on July 1, 2001 and shall
remain available through September 30, 2002 and $195,000,000 which shall
become available on October 1, 2001 and remain available through
September 30, 2002.] (Department of Education Appropriations Act, 2001,
as enacted by section 1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Reading Excellence................ 76 302 195
--------- --------- ----------
10.00 Total new obligations........... 76 302 195
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 27 16
22.00 New budget authority (gross)...... 65 286 195
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 92 302 195

[[Page 351]]

23.95 Total new obligations............. -76 -302 -195
24.40 Unobligated balance carried
forward, end of year............ 16
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 65 91
55.00 Advance appropriation........... 195
Mandatory:

65.00 Advance appropriation........... 195
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 65 286 195
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 233 282 397
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 233 282 397
73.10 Total new obligations............. 76 302 195
73.20 Total outlays (gross)............. -27 -187 -234
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 282 397 358
--------- --------- ----------
74.99 Obligated balance, end of year 282 397 358
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 24 21
86.93 Outlays from discretionary
balances........................ 27 162 212
--------- --------- ----------
87.00 Total outlays (gross)........... 27 187 234
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 65 286 195
90.00 Outlays........................... 27 187 234
---------------------------------------------------------------------------

Reading Excellence.--The Administration is working with Congress to
develop legislation reauthorizing programs included in the Elementary
and Secondary Education Act. The Administration anticipates enactment of
a new Reading First initiative supporting early literacy efforts and
that the Reading and Literacy Grants program will not be continued.
Funds for the Reading First initiative are requested in fiscal year 2002
under the Education for the Disadvantaged account. See the ``Legislative
proposal, not subject to PAYGO'' schedule in the Education for the
Disadvantaged account for additional details.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0011-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.1 Advisory and assistance services.. 5 5
25.2 Other services.................... 4 4
41.0 Grants, subsidies, and
contributions................... 67 293 195
--------- --------- ----------
99.9 Total new obligations........... 76 302 195
---------------------------------------------------------------------------

Education Reform

[For carrying out activities authorized by title IV of the Goals
2000: Educate America Act as in effect prior to September 30, 2000, and
sections 3122, 3132, 3136, and 3141, parts B, C, and D of title III, and
section 10105 and part I of title X of the Elementary and Secondary
Education Act of 1965, $1,880,710,000, of which $38,000,000 shall be for
the Goals 2000: Educate America Act, and of which $191,950,000 shall be
for section 3122: Provided, 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 with respect to all funds
appropriated to carry out section 10901 et seq. in this Act, the
Secretary shall strongly encourage applications for grants that are to
be submitted jointly by a local educational agency (or a consortium of
local educational agencies) and a community-based organization that has
experience in providing before- and after-school services and all
applications submitted to the Secretary shall contain evidence that the
project contains elements that are designed to assist students in
meeting or exceeding state and local standards in core academic
subjects, as appropriate to the needs of participating children:
Provided further, That $125,000,000, which shall become available on
July 1, 2001, and remain available through September 30, 2002, shall be
available to support activities under section 10105 of part A of title X
of the Elementary and Secondary Education Act of 1965, of which up to 6
percent shall become available October 1, 2000, and be available for
evaluation, technical assistance, school networking, peer review of
applications, and program outreach activities: Provided further, That
funds made available to local educational agencies under this section
shall be used only for activities related to establishing smaller
learning communities in high schools: Provided further, That $46,328,000
of the funds available to carry out section 3136 of the Elementary and
Secondary Education Act of 1965, $8,768,000 of the funds available to
carry out part B of title III of that Act and $20,614,000 of the funds
available to carry out part I of title X of that Act shall be available
for the projects and in the amounts specified in the statement of the
managers on the conference report accompanying this Act.] (Department of
Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0500-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 21st Century community learning
centers......................... 453 846
00.02 Small learning communities........ 28 97
--------- --------- ----------
00.91 Direct Program by Activities--
Subtotal (1 level)............ 453 874 97
Educational technology:

01.01 Technology literacy challenge
fund.......................... 425 450
01.02 Technology innovation challenge
grants........................ 146 136
01.03 Regional technology in education
consortia..................... 10 10
National activities:
01.04 Teacher training in technology 75 125
01.05 Community-based technology.... 33 65
01.06 Technology leadership
activities.................. 2 2
01.07 Star schools.................... 51 59
01.08 Ready to learn television....... 16 16
01.09 Telecommunications demonstration
project for mathematics....... 8 9
--------- --------- ----------
01.91 Total, Educational technology... 766 872
Goals 2000:

02.01 State and local education
systemic improvement.......... 458 8
02.02 Parental assistance............. 33 38
--------- --------- ----------
02.91 Total, Goals 2000............... 491 46
03.01 School-to-work opportunities...... 81 55
--------- --------- ----------
10.00 Total new obligations........... 1,791 1,847 97
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 133 63 97
22.00 New budget authority (gross)...... 1,765 1,881
22.21 Unobligated balance transferred to
other accounts.................. -48
22.22 Unobligated balance transferred
from other accounts............. 4
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,854 1,944 97
23.95 Total new obligations............. -1,791 -1,847 -97
24.40 Unobligated balance carried
forward, end of year............ 63 97
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 1,768 1,881
40.76 Reduction pursuant to P.L. 106-
113........................... -3
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 1,765 1,881
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 1,847 2,392 2,277
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 1,847 2,392 2,277
73.10 Total new obligations............. 1,791 1,847 97
73.20 Total outlays (gross)............. -1,243 -1,963 -1,627
73.40 Adjustments in expired accounts
(net)........................... -2
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 2,392 2,277 747
--------- --------- ----------
74.99 Obligated balance, end of year 2,392 2,277 747
----------------------------------------------------------------------------

[[Page 352]]

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 136 188
86.93 Outlays from discretionary
balances........................ 1,107 1,775 1,627
--------- --------- ----------
87.00 Total outlays (gross)........... 1,243 1,963 1,627
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,765 1,881
90.00 Outlays........................... 1,243 1,963 1,627
---------------------------------------------------------------------------
Note.--Excludes $846 million in budget authority in 2002 for activities
transferred to the School Improvement Programs account. Comparable amounts
for 2000 ($453 million) and 2001 ($846 million) are included above.

The Administration is working with the Congress to develop
legislation reauthorizing programs included in the Elementary and
Secondary Education Act. The Administration anticipates that the new
legislation would streamline the 21st Century Community Learning Centers
program and consolidate educational technology programs into flexible,
performance-based grants to States. Funds for both programs are
requested in fiscal year 2002 under the School Improvement Programs
account. See the legislative proposal in the School Improvement account
for additional details.

Object Classification (in millions of dollars)

Direct obligations:

25.1 Advisory and assistance services 5 9
25.2 Other services.................. 11 17
25.3 Purchases of goods and services
from Government accounts...... 6 8
25.5 Research and development
contracts..................... 10
41.0 Grants, subsidies, and
contributions................. 1,759 1,812 97
--------- --------- ----------
99.0 Subtotal, direct obligations.. 1,791 1,846 97
99.5 Below reporting threshold......... 1
--------- --------- ----------
99.9 Total new obligations........... 1,791 1,847 97
---------------------------------------------------------------------------

Chicago Litigation Settlement

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0220-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

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

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 2 1
23.95 Total new obligations............. -1 -1
24.40 Unobligated balance carried
forward, end of year............ 1
----------------------------------------------------------------------------

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

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

74.40 Unpaid obligations, end of year. 2 1
--------- --------- ----------
74.99 Obligated balance, end of year 2 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from discretionary
balances........................ 2 2 1
----------------------------------------------------------------------------

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

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, $115,500,000.] (Department of Education
Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Grants to local educational
agencies........................ 62 93
00.02 Special programs for Indian
children........................ 13 20
00.03 National activities............... 2 3
--------- --------- ----------
10.00 Total new obligations........... 77 116
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 77 116
23.95 Total new obligations............. -77 -116
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 77 116
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 86 95 126
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 86 95 126
73.10 Total new obligations............. 77 116
73.20 Total outlays (gross)............. -65 -84 -102
73.40 Adjustments in expired accounts
(net)........................... -2
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 95 126 25
--------- --------- ----------
74.99 Obligated balance, end of year 95 126 25
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 2 6
86.93 Outlays from discretionary
balances........................ 63 79 102
--------- --------- ----------
87.00 Total outlays (gross)........... 65 84 102
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 77 116
90.00 Outlays........................... 65 84 102
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

2000 actual 2001 est. 2002 est.
Enacted/requested:
Budget Authority.................. 77 116
Outlays........................... 65 85 102
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 116
Outlays........................... 6
------------------------------------
Total:
Budget Authority.................. 77 116 116
Outlays........................... 65 85 108
====================================

The administration is working with Congress to develop legislation
reauthorizing programs included in the Elemen

[[Page 353]]

tary and Secondary Education Act. When new authorizing legislation is
enacted, resources for the affected programs will be requested. See the
``Legislative proposal, not subject to PAYGO'' schedule for additional
details.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0101-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.2 Other services.................... 2 3
41.0 Grants, subsidies, and
contributions................... 75 113
--------- --------- ----------
99.9 Total new obligations........... 77 116
---------------------------------------------------------------------------

Indian Education

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Grants to local educational
agencies........................ 93
00.02 Special programs for Indian
children........................ 20
00.03 National activities............... 3
--------- --------- ----------
10.00 Total new obligations........... 116
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 116
23.95 Total new obligations............. -116
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 116
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 116
73.20 Total outlays (gross)............. -6
73.40 Adjustments in expired accounts
(net)...........................
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 110
--------- --------- ----------
74.99 Obligated balance, end of year 110
----------------------------------------------------------------------------

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

Net budget authority and outlays:
89.00 Budget authority.................. 116
90.00 Outlays........................... 6
---------------------------------------------------------------------------

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 assist participating students in meeting the same
academic standards as all other students. In 2000, the Department made
1,168 formula grants to local educational agencies and tribal schools
serving more than 448,000 students.

Special programs for Indian Children.--The Department makes
competitive awards for demonstration projects in early childhood
education, professional development grants, American Indian Teacher
Corps grants, and grants for the American Indian Administrator Corps.
The professional development awards in this activity are designed to
improve the quality of teachers and administrators in school districts
with concentrations of Indian students.

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

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0101-2-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.2 Other services.................... 3
41.0 Grants, subsidies, and
contributions................... 113
--------- --------- ----------
99.9 Total new obligations........... 116
---------------------------------------------------------------------------

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, $460,000,000: 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, 2001, as enacted by section 1(a)(1) of
P.L. 106-554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Instructional services............ 162 180
00.02 Support services.................. 14 16
00.03 Training grants................... 72 100
00.04 Foreign language assistance....... 8 14
00.05 Immigrant education............... 150 150
--------- --------- ----------
10.00 Total new obligations........... 406 460
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 406 460
23.95 Total new obligations............. -406 -460
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 406 460
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 531 566 578
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 531 566 578
73.10 Total new obligations............. 406 460
73.20 Total outlays (gross)............. -363 -448 -419
73.40 Adjustments in expired accounts
(net)........................... -8
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 566 578 159
--------- --------- ----------
74.99 Obligated balance, end of year 566 578 159
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 17 23
86.93 Outlays from discretionary
balances........................ 346 425 419
--------- --------- ----------
87.00 Total outlays (gross)........... 363 448 419
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 406 460
90.00 Outlays........................... 363 448 419
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

2000 actual 2001 est. 2002 est.
Enacted/requested:
Budget Authority.................. 406 460
Outlays........................... 363 448 419
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 460
Outlays........................... 23
------------------------------------
Total:
Budget Authority.................. 406 460 460
Outlays........................... 363 448 442
====================================

Bilingual and immigrant education.--The Administration is working
with Congress to develop legislation reauthorizing

[[Page 354]]

programs included in the Elementary and Secondary Education Act. When
new authorizing legislation is enacted, resources for the affected
programs will be requested. See the ``Legislative proposal, not subject
to PAYGO'' schedule for additional details.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1300-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.5 Research and development contracts 5 6
41.0 Grants, subsidies, and
contributions................... 401 454
--------- --------- ----------
99.9 Total new obligations........... 406 460
---------------------------------------------------------------------------

Bilingual and Immigrant Education

(Legislation proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1300-2-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.06 Bilingual and immigrant education
State grants (proposed
legislation).................... 460
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 460
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 460
23.95 Total new obligations............. -460
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 460
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 460
73.20 Total outlays (gross)............. -23
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 437
--------- --------- ----------
74.99 Obligated balance, end of year 437
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 23
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 460
90.00 Outlays........................... 23
---------------------------------------------------------------------------

Bilingual and immigrant education State grants.--This program would
provide formula grants to States based on their share of the Nation's
limited English proficient and immigrant student population. States
would make subgrants to local educational agencies based on their share
of the State's limited English proficient and immigrant students. School
districts would implement programs designed to assist participating
students in learning English within three years and in meeting State
standards in core content areas. States and local educational agencies
would be accountable for demonstrating annual increases in the English
proficiency of participating students.

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

Federal Funds

General and special funds:

Special Education

For carrying out the Individuals with Disabilities Education Act,
[$7,439,948,000] $8,425,595,000, of which [$2,090,452,000]
$8,162,452,000 shall become available for obligation on July 1, [2001]
2002, and shall remain available through September 30, [2002, and of
which $5,072,000,000 shall become available on October 1, 2001 and shall
remain available through September 30, 2002, for academic year 2001-
2002] 2003: Provided, That [$9,500,000 shall be for Recording for the
Blind and Dyslexic to support the development, production, and
circulation of recorded educational materials: Provided further, That
$1,500,000 shall be for the recipient of funds provided by Public Law
105-78 under section 687(b)(2)(G) of the Act to provide information on
diagnosis, intervention, and teaching strategies for children with
disabilities: Provided further, That $7,353,000 of the funds for section
672 of the Act shall be available for the projects and in the amounts
specified in the statement of the managers on the conference report
accompanying this Act] the budget authority (but not the outlays) for
$5,072,000,000 provided under this heading in fiscal year 2001, to be
available as an advance appropriation in fiscal year 2002, shall be
considered direct spending in fiscal year 2002 for purposes of the
Balanced Budget and Emergency Deficit Control Act of 1990, as amended,
and section 2(a) of Public Law 106-554; Provided further, That the
amount for section 611(c) of the Act shall be equal to the amount
available for that section under Public Law 106-554, increased by the
rate of inflation as specified in section 611(f)(1)(B)(ii) of the Act.
(Department of Education Appropriations Act, 2001, as enacted by section
1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

State grants:
00.01 Grants to States.............. 1,171 5,119 12,412
00.02 Preschool grants.............. 366 414 390
00.03 Grants for infants and
families.................... 345 480 384
--------- --------- ----------
00.91 Subtotal, State grants...... 1,882 6,013 13,186
National activities:
01.01 State improvement............. 32 79 49
01.02 Research and innovation....... 65 78 70
01.03 Technical assistance and
dissemination............... 46 53 53
01.04 Personnel preparation......... 82 81 82
01.05 Parent information centers.... 19 26 26
01.06 Technology and media services. 36 39 32
--------- --------- ----------
01.91 Subtotal, National
activities................ 280 356 312
--------- --------- ----------
02.00 Total Direct Program.............. 2,162 6,369 13,498
09.01 Reimbursable program.............. 1
--------- --------- ----------
10.00 Total new obligations............. 2,163 6,369 13,498
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 119 259
22.00 New budget authority (gross)...... 2,295 6,110 13,498
22.10 Resources available from
recoveries of prior year
obligations..................... 8
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 2,422 6,369 13,498
23.95 Total new obligations............. -2,163 -6,369 -13,498
23.98 Unobligated balance expiring or
withdrawn.......................
24.40 Unobligated balance carried
forward, end of year............ 259
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 2,294 2,368 8,426
55.00 Advance appropriation........... 3,742
Mandatory:

65.00 Advance appropriation........... 5,072
Discretionary:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 1
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 2,295 6,110 13,498
----------------------------------------------------------------------------

[[Page 355]]

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

72.40 Unpaid obligations, start of
year.......................... 6,855 4,044 4,598
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 6,855 4,044 4,598
73.10 Total new obligations............. 2,163 6,369 13,498
73.20 Total outlays (gross)............. -4,950 -5,815 -6,933
73.40 Adjustments in expired accounts
(net)........................... -15
73.45 Recoveries of prior year
obligations..................... -8
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 4,044 4,598 11,163
--------- --------- ----------
74.99 Obligated balance, end of year 4,044 4,598 11,163
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 104 2,581 3,466
86.93 Outlays from discretionary
balances........................ 4,846 3,234 3,468
--------- --------- ----------
87.00 Total outlays (gross)........... 4,950 5,815 6,933
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

Net budget authority and outlays:
89.00 Budget authority.................. 2,294 6,110 13,498
90.00 Outlays........................... 4,949 5,815 6,933
---------------------------------------------------------------------------

SUMMARY OF PROGRAM LEVEL

[In millions of dollars]

2000-2001
academic
year 2001-2002
academic year 2002-2003
academic year
Current Budget Authority............ 2,294 2,368 8,426
Advance appropriation............... 3,742 5,072
------------------------------------
Total program level............. 6,036 7,440 8,426
====================================
Change in advance appropriation from
the previous year................... +3,742 +1,330 -5,072

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 implement statewide systems of coordinated,
comprehensive, multi-disciplinary interagency programs to provide
early intervention services to children with disabilities, birth
through age 2, and their families.
The goal of this program is to help States provide a
comprehensive system of early intervention services that will
enhance family and child outcomes.

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

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

Performance data related to these goals include:

2000 actual 2001 est. 2002 est.
Number of children served in first
quarter of fiscal year:
Ages 3 through 21..................... 6,270,000 6,377,000 6,466,000
Ages 3 through 5...................... 588,944 600,700 612,700
Birth through 2....................... 205,525 214,800 244,500

1996-1997 ac1997-1998 actual 1998-1999
actual
Educational Environment
Percent of children ages 6 through 21
provided special education in:
Regular classrooms.................... 45.7 46.5 47.4
Resource rooms........................ 28.5 29.1 28.4
Separate classes...................... 21.4 20.4 20.1
Separate schools...................... 3.1 2.8 2.9
Residential facilities................ .7 .7 .7
Home or hospital...................... .6 .5 .5
Status of Exiting Students
Percent of students with disabilities
aged 14-21 leaving school:
Graduated with a diploma.............. 53.5 55.4 57.4
Graduated through certification....... 11.4 11.2 11.2
Dropped out of school................. 32.7 31.0 28.9
Reached maximum age and other......... 2.4 2.4 2.5

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0300-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.2 Other services.................... 10 20 17
41.0 Grants, subsidies, and
contributions................... 2,153 6,349 13,481
--------- --------- ----------
99.9 Total new obligations........... 2,163 6,369 13,498
---------------------------------------------------------------------------

Rehabilitation Services and Disability Research

For carrying out, to the extent not otherwise provided, the
Rehabilitation Act of 1973, the Assistive Technology Act of 1998, and
the Helen Keller National Center Act, [$2,805,339,000] $2,930,117,000,
of which $60,000,000 shall remain available through September 30, 2003:
Provided, That the funds provided for title I of the Assistive
Technology Act of 1998 (``the AT Act'') shall be allocated
notwithstanding section 105(b)(1) of the AT Act: Provided further, That
each State shall be provided $50,000 for activities under section 102 of
the AT Act: Provided further, That [$15,000,000] $40,000,000 shall be
used to support grants for up to three years to States under title III
of the AT 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 301(c)(2) and section
302 of that Act shall not apply to such grants[: Provided further, That
$4,600,000 of the funds for section 303 of the Rehabilitation Act of
1973 shall be available for the projects and in the amounts specified in
the statement of the managers on the conference report accompanying this
Act: Provided further, That $400,000 of the funds for title II of the
Rehabilitation Act of 1973 shall be for the Cerebral Palsy Research
Foundation in Wichita, Kansas for the establishment of a Rehabilitation
Research and Training Center to study and recommend incentives for
employers to hire persons with significant disabilities]. (Department of
Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0301-0-1-506 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
Direct program:

00.01 Vocational rehabilitation State
grants........................ 2,339 2,400 2,481
00.02 Client assistance State grants.. 11 12 12
00.03 Training........................ 40 40 40
00.04 Demonstration and training
programs...................... 22 21 16
00.05 Migrant and seasonal farmworkers 2 2 2
00.06 Recreational programs........... 3 3 3
00.07 Protection and advocacy of
individual rights............. 12 14 14
00.08 Projects with industry.......... 22 22 22
00.09 Supported employment State
grants........................ 38 38 38
00.10 Independent living.............. 85 100 100
00.11 Program improvement............. 2 2 1

[[Page 356]]

00.12 Evaluation...................... 2 2 1
00.13 Helen Keller National Center.... 9 9 9
00.14 National Institute on Disability
and Rehabilitation Research... 86 100 110
00.15 Assistive technology............ 34 41 61
00.16 Access to Telework Fund......... 20
--------- --------- ----------
01.00 Total direct program............ 2,707 2,806 2,930
09.01 Reimbursable program.............. 2 2 2
--------- --------- ----------
10.00 Total new obligations........... 2,709 2,808 2,932
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 2,709 2,808 2,932
23.95 Total new obligations............. -2,709 -2,808 -2,932
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 369 406 449
40.76 Reduction pursuant to P.L. 106-
113........................... -1
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 368 406 449
Mandatory:

60.00 Appropriation................... 2,339 2,400 2,481
Discretionary:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 2 2 2
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 2,709 2,808 2,932
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 1,028 977 924
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 1,028 977 924
73.10 Total new obligations............. 2,709 2,808 2,932
73.20 Total outlays (gross)............. -2,758 -2,861 -2,892
73.40 Adjustments in expired accounts
(net)........................... -2
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 977 924 964
--------- --------- ----------
74.99 Obligated balance, end of year 977 924 964
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 66 285 315
86.93 Outlays from discretionary
balances........................ 229 380 122
86.97 Outlays from new mandatory
authority....................... 1,843 1,680 1,737
86.98 Outlays from mandatory balances... 620 516 718
--------- --------- ----------
87.00 Total outlays (gross)........... 2,758 2,861 2,892
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

Net budget authority and outlays:
89.00 Budget authority.................. 2,707 2,806 2,930
90.00 Outlays........................... 2,755 2,859 2,890
---------------------------------------------------------------------------

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 2002.

The table below presents national data on selected performance
measures for the VR State grants program. The data are based on the
number of individuals whose service records were closed in fiscal years
1998 (359,877) and 1999 (370,742). The 2002 target is to increase the
number of individuals with disabilities achieving an employment outcome
by one percent over the previous year and to increase the employment
outcome rate to 63.2 percent.

CONSUMER OUTCOMES (CASES CLOSED)

1998 actual 1999 actual
Individuals achieving employment
outcomes............................... 223,668 231,714
Percent with significant disabilities.. 82.6% 84.9%
Employment outcomes as a percent all of
individuals receiving services......... 62.2% 62.5%

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 and improve the provision of rehabilitation services, or
that further the purposes of 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 2000, PWI projects
placed in competitive employment approximately 61.9 percent (8,104) of
the 13,083 individuals with disabilities served by the 99 projects. The
2002 target for this program is to place 62.2 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 1999, 73 percent
of individuals with a supported employment goal achieved a competitive
employment outcome.

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. Grants are also
awarded to provide support services to older blind individuals to
increase their ability to care for their own needs. 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, dissemination, and performance
measurement activities.

[[Page 357]]

Evaluation.--Studies are conducted to evaluate the impact and
effectiveness of various programs authorized under the Rehabilitation
Act. The multi-year national longitudinal study of the Vocational
Rehabilitation State grants program is scheduled for completion in 2001.
Expanded study findings on employment retention will be available in
2002.

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 dissemination of research aimed
at improving the lives of individuals with disabilities. The Institute
also promotes the development and utilization of new technologies to
assist these individuals in achieving greater independence and
integration into society.

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 financing programs to increase access to assistive
technology for individuals with disabilities.

Access to telework fund.--Under this new program, Federal matching
funds would be awarded to States to provide loans for individuals with
disabilities to purchase computers and other equipment so that they can
telework from home.

Object Classification (in millions of dollars)

Direct obligations:

25.1 Advisory and assistance services 7 7 10
25.2 Other services.................. 2 2 2
25.3 Purchases of goods and services
from Government accounts...... 1 1
25.5 Research and development
contracts..................... 1 1 5
41.0 Grants, subsidies, and
contributions................. 2,697 2,795 2,912
--------- --------- ----------
99.0 Subtotal, direct obligations.. 2,707 2,806 2,930
99.0 Reimbursable obligations.......... 2 2 2
--------- --------- ----------
99.9 Total new obligations........... 2,709 2,808 2,932
---------------------------------------------------------------------------

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.), $12,000,000. (Department of Education Appropriations Act,
2001, as enacted by section 1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0600-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total new obligations (object
class 41.0)..................... 10 12 12
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 10 12 12
23.95 Total new obligations............. -10 -12 -12
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 10 12 12
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 3 4 1
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 3 4 1
73.10 Total new obligations............. 10 12 12
73.20 Total outlays (gross)............. -9 -15 -12
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 4 1 1
--------- --------- ----------
74.99 Obligated balance, end of year 4 1 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 7 11 11
86.93 Outlays from discretionary
balances........................ 3 4 1
--------- --------- ----------
87.00 Total outlays (gross)........... 9 15 12
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 10 12 12
90.00 Outlays........................... 9 15 12
---------------------------------------------------------------------------

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 2000, the portion of the Federal appropriation
allocated to educational materials represented approximately 49.2
percent of the Printing House's total sales. The full appropriation
represented approximately 37.4 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.),
[$53,376,000] $52,570,000, of which [$5,376,000] $4,570,000 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, 2001, as enacted by section
1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0601-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Operations........................ 45 48 48
00.02 Construction...................... 3 5 5
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 48 53 53
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 48 53 53
23.95 Total new obligations............. -48 -53 -53
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 48 53 53
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 1 5 9
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 1 5 9
73.10 Total new obligations............. 48 53 53
73.20 Total outlays (gross)............. -44 -49 -51
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 5 9 11
--------- --------- ----------
74.99 Obligated balance, end of year 5 9 11
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 46 46 46
86.93 Outlays from discretionary
balances........................ -2 3 5
--------- --------- ----------
87.00 Total outlays (gross)........... 44 49 51
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 48 53 53
90.00 Outlays........................... 44 49 51
---------------------------------------------------------------------------

This residential program provides postsecondary technical and
professional education for people who are deaf to prepare

[[Page 358]]

them for employment, provides training, and conducts applied research
into employment related aspects of deafness. In 2000, 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 third and final 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.), $89,400,000: 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, 2001, as enacted by section 1(a)(1) of
P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0602-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Operations........................ 83 89 89
00.02 Construction...................... 3
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 86 89 89
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 86 89 89
23.95 Total new obligations............. -86 -89 -89
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 86 89 89
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 3 8 5
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 3 8 5
73.10 Total new obligations............. 86 89 89
73.20 Total outlays (gross)............. -81 -92 -89
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 8 5 5
--------- --------- ----------
74.99 Obligated balance, end of year 8 5 5
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 86 84 84
86.93 Outlays from discretionary
balances........................ -5 8 5
--------- --------- ----------
87.00 Total outlays (gross)........... 81 92 89
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 86 89 89
90.00 Outlays........................... 81 92 89
---------------------------------------------------------------------------

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 2000, the Federal appropriation represented 63 percent of the
University's operating budget, excluding Federal financial aid,
vocational rehabilitation, and competitive grants and contracts, and
97.9 percent of the operating budgets of the related elementary and
secondary schools. The University may also use appropriated funds for
the Endowment Grant program.

OFFICE OF VOCATIONAL AND ADULT EDUCATION

Federal Funds

General and special funds:

Vocational and Adult Education

For carrying out, to the extent not otherwise provided, the Carl D.
Perkins Vocational and Technical Education Act, the Adult Education and
Family Literacy Act, and title VIII-D of the Higher Education Act of
1965, as amended, and Public Law 102-73, [$1,825,600,000, of which
$1,000,000 shall remain available until expended, and] $1,801,660,000,
of which [$1,028,000,000] $1,796,060,000 shall become available on July
1, [2001] 2002 and shall remain available through September 30, [2002
and of which $791,000,000 shall become available on October 1, 2001 and
shall remain available through September 30, 2002] 2003: Provided, That
the budget authority (but not the outlays) for $791,000,000 provided
under this heading in fiscal year 2001, to be available as an advance
appropriation in fiscal year 2002, shall be considered direct spending
in fiscal year 2002 for purposes of the Balanced Budget and Emergency
Deficit Control Act of 1990, as amended, and section 2(a) of Public Law
106-554: [of the amounts made available for the Carl D. Perkins
Vocational and Technical Education Act, $5,600,000 shall be for tribally
controlled postsecondary vocational and technical institutions under
section 117: Provided further, That $9,000,000 shall be for carrying out
section 118 of such Act: Provided further, That of the amounts made
available for the Carl D. Perkins Vocational and Technical Education
Act, $5,000,000 shall be for demonstration activities authorized by
section 207:] Provided further, That of the amount provided for Adult
Education State Grants, $70,000,000 shall be made available for
integrated English literacy and civics education services to immigrants
and other limited English proficient populations: Provided further, That
of the amount reserved for integrated English literacy and civics
education, notwithstanding section 211 of the Adult Education and Family
Literacy Act, 65 percent shall be allocated to States based on a State's
absolute need as determined by calculating each State's share of a 10-
year average of the Immigration and Naturalization Service data for
immigrants admitted for legal permanent residence for the 10 most recent
years, and 35 percent allocated to States that experienced growth as
measured by the average of the 3 most recent years for which Immigration
and Naturalization Service data for immigrants admitted for legal
permanent residence are available, except that no State shall be
allocated an amount less than $60,000: Provided further, That of the
amounts made available for the Adult Education and Family Literacy Act,
[$14,000,000] $9,500,000 shall be for national leadership activities
under section 243 and [$6,500,000] $6,560,000 shall be for the National
Institute for Literacy under section 242: Provided further, That
$22,000,000 shall be for Youth Offender Grants, of which $5,000,000
shall be used in accordance with section 601 of Public Law 102-73 as
that section was in effect prior to the enactment of Public Law 105-220:
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, 2001, as enacted by section
1(a)(1) of P.L. 106-554.)

[[Page 359]]

Program and Financing (in millions of dollars)

Obligations by program activity:
Vocational education:

Annual appropriations:
Vocational education:
00.01 Basic grants................ 257 1,095 1,795
00.02 National programs........... 15 17 17
00.03 Occupational and employment
information............... 8 10
00.04 Tribally controlled
postsecondary vocational
institutions.............. 4 5 6
00.05 Tech-prep education......... 103 106 106
00.06 Tech-prep demonstration....... 5
--------- --------- ----------
00.91 Total, Vocational education. 387 1,238 1,924
Adult education:
01.01 State grants................ 443 538 550
01.02 National Institute for
Literacy.................. 6 6 7
01.03 National leadership
activities................ 14 14 14
--------- --------- ----------
01.91 Total, adult education...... 463 558 570
02.01 State grants for incarcerated
youth offenders............. 14 17 17
03.01 Literacy programs for
prisoners................... 6 5
09.01 Reimbursable program.............. 2
--------- --------- ----------
10.00 Total new obligations........... 866 1,819 2,516
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 60 86 93
22.00 New budget authority (gross)...... 893 1,826 2,593
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 953 1,911 2,686
23.95 Total new obligations............. -866 -1,819 -2,516
24.40 Unobligated balance carried
forward, end of year............ 86 93 169
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 891 1,035 1,802
55.00 Advance appropriation........... 791
Mandatory:

65.00 Advance appropriation........... 791
Discretionary:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 2
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 893 1,826 2,593
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 1,939 1,334 1,430
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 1,939 1,334 1,430
73.10 Total new obligations............. 866 1,819 2,516
73.20 Total outlays (gross)............. -1,465 -1,723 -1,774
73.40 Adjustments in expired accounts
(net)........................... -6
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 1,334 1,430 2,172
--------- --------- ----------
74.99 Obligated balance, end of year 1,334 1,430 2,172
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 34 646 645
86.93 Outlays from discretionary
balances........................ 1,430 1,077 1,130
--------- --------- ----------
87.00 Total outlays (gross)........... 1,465 1,723 1,774
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

Net budget authority and outlays:
89.00 Budget authority.................. 891 1,826 2,593
90.00 Outlays........................... 1,463 1,723 1,774
---------------------------------------------------------------------------

Program levels for activities in this account are as follows:

(in millions of dollars)

2000-2001
academic
year 2001-2002
academic year 2002-2003
academic year
1. Vocational education:
a. Basic grants:
Annual appropriation............ 265 309 1,100
Advance appropriation........... 791 791
------------------------------------
Subtotal, basic grants........ 1,056 1,100 1,100
b. National programs.............. 18 18 12
c. Occupational & employment
information..................... 9 9
d. Tribally controlled
postsecondary vocational
institutions.................... 5 6 6
e. Tech-prep education............ 106 106 106
f. Tech-prep demonstration........ 5
Total, vocational education... 1,194 1,244 1,224
2. Adult education:
a. State grants................... 450 540 540
b. National Institute for Literacy 6 7 7
c. National leadership activities. 14 14 10
------------------------------------
Total, adult education........ 470 561 557
3. State grants for incarcerated
youth offenders..................... 14 17 17
4. Literacy programs for prisoners.. 5 5 5
------------------------------------
Total......................... 1,683 1,827 1,803
====================================

SUMMARY OF PROGRAM LEVEL

(in millions of dollars)

2000-2001
academic
year 2001-2002
academic year 2002-2003
academic year
New Budget Authority................ 891 1,035 1,802
Advance appropriation............... 791 791
------------------------------------
Total program level............. 1,682 1,826 1,802
====================================
Change in advance appropriation from
the previous year................... +791 -791

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 vocational
education nationally. Activities include two national centers for
research and dissemination in vocational education and a program of
discretionary research and development projects.
Tribally controlled postsecondary vocational and technical
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

[[Page 360]]

adults, to assist adults in obtaining a high school diploma or its
equivalent, and to promote family literacy. A portion of the funds
are reserved for formula grants to States to provide English
literacy and civics education for immigrants and other limited
English proficient adults.
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.
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.
Literacy programs for prisoners.--Funds are awarded on a
competitive basis to State and local correctional agencies to
establish and operate programs that reduce recidivism.

Object Classification (in millions of dollars)

Direct obligations:

Personnel compensation:
11.1 Full-time permanent........... 1
11.3 Other than full-time permanent 1 1 1
--------- --------- ----------
11.9 Total personnel compensation 1 2 1
25.1 Advisory and assistance services 5 6 6
25.2 Other services.................. 3 3 3
25.3 Purchases of goods and services
from Government accounts...... 1 1 1
25.5 Research and development
contracts..................... 7 8 8
41.0 Grants, subsidies, and
contributions................. 845 1,797 2,495
--------- --------- ----------
99.0 Subtotal, direct obligations.. 862 1,817 2,514
99.0 Reimbursable obligations.......... 2
99.5 Below reporting threshold......... 2 2 2
--------- --------- ----------
99.9 Total new obligations........... 866 1,819 2,516
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0400-0-1-501 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 15 20 16
---------------------------------------------------------------------------

OFFICE OF POSTSECONDARY EDUCATION

Federal Funds

General and special funds:

Higher Education

For carrying out, to the extent not otherwise provided, section 121
and titles II, III, IV, V, VI, and VII of the Higher Education Act of
1965, as amended, [section 1543 of the Higher Education Amendments of
1992 and title VIII of the Higher Education Amendments of 1998,] and the
Mutual Educational and Cultural Exchange Act of 1961, [$1,911,710,000]
$1,723,223,000, of which [$10,000,000] $5,000,000 for interest subsidies
authorized by section 121 of the Higher Education Act of 1965, shall
remain available until expended: Provided, That $10,000,000, to remain
available through September 30, [2002] 2003, shall be available to fund
fellowships for academic year [2002-2003] 2003-2004 under part A,
subpart 1 of title VII of said Act, under the terms and conditions of
part A, subpart 1: Provided further, That [$3,000,000] $1,000,000 is 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: [Provided further,
That $15,000,000 shall be available for tribally controlled colleges and
universities under section 316 of the Higher Education Act of 1965, of
which $5,000,000 shall be used for construction and renovation: Provided
further, That $250,000 shall be for the Web-Based Education Commission
to continue activities authorized under part J of title VIII of the
Higher Education Amendments of 1998: Provided further, That $115,487,000
of the funds for part B of title VII of the Higher Education Act of 1965
shall be available for the projects and in the amounts specified in the
statement of the managers on the conference report accompanying this
Act: Provided further, That the funds provided for title II of the
Higher Education Act of 1965 shall be allocated notwithstanding section
210 of the Higher Education Act of 1965 and that up to 1.4 percent of
the total funds made available under section 210 of the Higher Education
Act of 1965 may be used to carry out the evaluation activities
authorized under section 206(d) of that Act] Provided further, That
funds for part B of title VII of the Higher Education Act of 1965 may be
used, at the discretion of the Secretary of Education, to fund
continuation awards under title IV, part A, subpart 8 of such Act.
(Department of Education Appropriations Act, 2001, as enacted by section
1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0201-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
Aid for institutional development:

00.01 Strengthening institutions...... 60 73 73
00.02 Strengthening tribally
controlled colleges and
universities.................. 6 15 15
00.03 Strengthening Alaska Native and
Native Hawaiian-serving
institutions.................. 5 6 6
00.04 Strengthening historically black
colleges and universities..... 149 185 197
00.05 Strengthening historically black
graduate institutions......... 31 45 48
00.06 Minority science and engineering
improvement................... 8 8 8
--------- --------- ----------
00.91 Subtotal, aid for
institutional development... 259 332 347
Other aid for institutions:

01.01 Developing Hispanic-serving
institutions.................. 42 69 73
01.02 International education and
foreign language studies...... 70 78 78
01.03 Fund for the Improvement of
Postsecondary Education....... 71 151 51
01.04 Demonstration projects to ensure
quality higher education for
students with disabilities.... 5 6
01.05 Interest subsidy grants......... 11 18 5
--------- --------- ----------
01.91 Subtotal, other aid for
institutions................ 199 322 207
Assistance for students:

02.01 Federal TRIO programs........... 645 730 780
02.02 Gaining early awareness and
readiness for undergraduate
programs (GEAR UP)............ 200 295 227
02.03 Byrd honors scholarships........ 40 41 41
02.04 Javits fellowships.............. 10 10 10
02.05 Graduate assistance in areas of
national need................. 31 31 31
02.06 Thurgood Marshall legal
educational program........... 4
02.07 B. J. Stupak Olympic
scholarships.................. 1
02.08 Child care access means parents
in school..................... 5 25 25
02.09 Learning anytime anywhere
partnerships.................. 23 30
02.10 State grants for incarcerated
youth offenders............... 5
--------- --------- ----------
02.91 Subtotal, assistance for
students.................... 959 1,167 1,114
Other Aid:

03.01 Teacher quality enhancement..... 98 98 54
03.02 GPRA data/HEA program evaluation 3 3 1
03.03 Underground railroad program.... 2 2
03.04 Community scholarship
mobilization.................. 1
--------- --------- ----------
03.91 Subtotal, Other Aid........... 104 103 55
09.01 Reimbursable program.............. 8
--------- --------- ----------
10.00 Total new obligations........... 1,529 1,924 1,723
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 12 22 10
22.00 New budget authority (gross)...... 1,538 1,912 1,723
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,550 1,934 1,733
23.95 Total new obligations............. -1,529 -1,924 -1,723
24.40 Unobligated balance carried
forward, end of year............ 22 10 10
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 1,534 1,912 1,723

[[Page 361]]

40.76 Reduction pursuant to P.L. 106-
113........................... -4
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 1,530 1,912 1,723
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 8
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 1,538 1,912 1,723
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 1,533 1,963 2,329
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 1,533 1,963 2,329
73.10 Total new obligations............. 1,529 1,924 1,723
73.20 Total outlays (gross)............. -1,098 -1,559 -1,777
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 1,963 2,329 2,275
--------- --------- ----------
74.99 Obligated balance, end of year 1,963 2,329 2,275
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 77 104 90
86.93 Outlays from discretionary
balances........................ 1,022 1,455 1,687
--------- --------- ----------
87.00 Total outlays (gross)........... 1,098 1,559 1,777
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -8
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,530 1,912 1,723
90.00 Outlays........................... 1,090 1,559 1,777
---------------------------------------------------------------------------

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 Alaska Native and Native Hawaiian 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 a broad range of postsecondary reform and improvement projects,
as well as international consortia programs.

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 postsecondary education
outreach and student support services through 5 major programs designed
to help individuals from disadvantaged backgrounds enter and complete
college and graduate studies.

Gaining early awareness and readiness for undergraduate programs.--
Funds will support early college preparation and awareness activities at
the State and local levels to ensure that low-income elementary and
secondary school students are prepared for and pursue postsecondary
education.

Byrd honors scholarships.--Funds will support merit-based
scholarships to students who have demonstrated outstanding academic
achievement and who show promise of continued academic excellence for
study at an institution of higher education.

Javits fellowships.--Funds will support fellowships to students of
superior ability who have financial need and who are pursuing doctoral
degrees in the arts, humanities, and social sciences.

Graduate assistance in areas of national need.--Funds will support
fellowships to graduate students of superior ability who have financial
need and who are from traditionally under-Prepresented backgrounds for
study in areas of national need.

Child care access means parents in school.--Funds will support a
program designed to bolster the participation of low-income parents in
postsecondary education through the provision of campus-based child care
services.

Other aid.--

Teacher quality enhancement.--Funds will support programs that seek
to make lasting changes in the ways our Nation recruits, prepares,
licenses, and supports teachers.

GPRA data/HEA program evaluation.--Funds will support 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)

Direct obligations:

25.1 Advisory and assistance services 5 6 5
25.2 Other services.................. 6 7 4
25.3 Purchases of goods and services
from Government accounts...... 1 2 2
41.0 Grants, subsidies, and
contributions................. 1,508 1,909 1,712
--------- --------- ----------
99.0 Subtotal, direct obligations.. 1,520 1,924 1,723
99.0 Reimbursable obligations.......... 8
99.5 Below reporting threshold......... 1
--------- --------- ----------
99.9 Total new obligations........... 1,529 1,924 1,723
---------------------------------------------------------------------------

Howard University

For partial support of Howard University (20 U.S.C. 121 et seq.),
$232,474,000, of which not less than $3,600,000 shall be for a matching
endowment grant pursuant to the Howard University Endowment Act (Public
Law 98-480) and shall remain available until expended. (Department of
Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
P.L. 106-554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0603-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 General support................... 193 202 202
00.02 Howard University Hospital........ 30 30 30
--------- --------- ----------

[[Page 362]]

10.00 Total new obligations (object
class 41.0)................... 223 232 232
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 4
22.00 New budget authority (gross)...... 219 232 232
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 223 232 232
23.95 Total new obligations............. -223 -232 -232
24.40 Unobligated balance carried
forward, end of year............
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 219 232 232
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 1 14 14
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 1 14 14
73.10 Total new obligations............. 223 232 232
73.20 Total outlays (gross)............. -210 -232 -232
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 14 14 14
--------- --------- ----------
74.99 Obligated balance, end of year 14 14 14
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 209 218 218
86.93 Outlays from discretionary
balances........................ 1 14 14
--------- --------- ----------
87.00 Total outlays (gross)........... 210 232 232
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 219 232 232
90.00 Outlays........................... 210 232 232
---------------------------------------------------------------------------

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 2000, direct Federal appropriations for general
support represented approximately 53 percent of the university's
educational and general expenditures.

College Housing and Academic Facilities Loans Program

For Federal administrative expenses authorized under section 121 of
the Higher Education Act of 1965, $762,000 to carry out activities
related to existing facility loans entered into under the Higher
Education Act of 1965. (Department of Education Appropriations Act,
2001, as enacted by section 1(a)(1) of P.L. 106-554.)

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 of 1965 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 of 1965, as amended,
$208,000. (Department of Education Appropriations Act, 2001, as enacted
by section 1(a)(1) of P.L. 106-554.)

General Fund Credit Receipt Accounts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0241-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
0101 Negative subsidies/subsidy
reestimates..................... 2
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

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

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

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation (Federal
administration)............... 1 1 1
1 1 1
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year..........................
72.95 Uncollected customer payments
from Federal sources, start of
year.......................... -1 -1 -1
--------- --------- ----------
72.99 Obligated balance, start of
year........................ -1 -1 -1
73.10 Total new obligations............. 1 1 1
73.20 Total outlays (gross)............. -1 -1 -1
Unpaid obligations, end of year:

74.95 Uncollected customer payments
from Federal sources, end of
year.......................... -1 -1
--------- --------- ----------
74.99 Obligated balance, end of year -1 -1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 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 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Direct loan subsidy budget authority:
1330 Subsidy budget authority downward
reestimate...................... -2
--------- --------- ----------
1339 Total subsidy budget authority.. -2
Direct loan subsidy outlays:
1340 Subsidy outlays downward
reestimate...................... -2
--------- --------- ----------
1349 Total subsidy outlays........... -2
----------------------------------------------------------------------------

Administrative expense data:
3510 Budget authority.................. 1 1 1
3580 Outlays from balances............. 1 1
3590 Outlays from new authority........
---------------------------------------------------------------------------

The College Housing and Academic Facilities Loans Program and the
Historically Black College and University Capital Financing Program are
administered separately, but are consolidated for presentation purposes.

College Housing and Academic Facilities Loans Program.--Funds for
this activity pay the Federal costs for administering the College
Housing and Academic Facilities Loans (CHAFL), College Housing Loans
(CHL), and Higher Education Facilities Loans (HEFL) programs. Prior to
1994, these programs provided financing for the construction,
reconstruction, and renovation of housing, academic, and other
educational facilities. Although no new loans have been awarded since
fiscal year 1993, costs for administering the outstanding loans will
remain for at least 30 more years. Agreements exist with the Department
of Health and Human Services to provide architectural and engineering
services and with the Federal Reserve Bank to provide loan servicing.
The 2002 budget request provides funding for personnel compensation and
other administrative costs. In accordance with the Federal Credit Reform
Act, loan servicing costs for CHL and HEFL are paid from their
respective collections.

[[Page 363]]

Historically Black College and University Capital Financing
Program.--The Historically Black College and University (HBCU) Capital
Financing Program provides HBCUs with access to capital financing for
the repair, renovation, and construction of classrooms, libraries,
laboratories, dormitories, instructional equipment, and research
instrumentation. The Higher Education Amendments of 1992 granted the
Department authority to enter into insurance agreements with a private
for-profit Designated Bonding Authority to guarantee no more than
$375,000,000 in outstanding principal and unpaid accrued interest
combined. 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.

Since the first loan was issued in 1996, a total of 8 loans for $53
million have been made. Additional loans are expected in 2001 and 2002.
No subsidy appropriations are required. The 2002 budget provides funds
for continuing Federal administrative activities only.

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0241-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 7 7 7
---------------------------------------------------------------------------

College Housing and Academic Facilities Loans Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.02 Interest paid to Treasury......... 2 1 1
08.02 Payment of downward reestimate to
receipt account................. 1
08.04 Payment of interest on downward
reestimates to receipt account.. 1
--------- --------- ----------
08.91 Subtotal, Downward reestimate
payments...................... 2
--------- --------- ----------
10.00 Total new obligations........... 2 3 1
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New financing authority (gross)... 2 4 2
22.10 Resources available from
recoveries of prior year
obligations..................... 2
22.40 Capital transfer to general fund.. -1
22.60 Portion applied to repay debt..... -1 -1
22.70 Balance of authority to borrow
withdrawn....................... -1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 2 3 1
23.95 Total new obligations............. -2 -3 -1
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

67.15 Authority to borrow (indefinite) 2
69.00 Offsetting collections (cash)..... 2 2 2
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 2 4 2
----------------------------------------------------------------------------

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

72.40 Unpaid obligations: Borrowing
Authority..................... 6
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 6
73.10 Total new obligations............. 2 3 1
73.20 Total financing disbursements
(gross)......................... -6 -3 -1
73.45 Recoveries of prior year
obligations..................... -2
87.00 Total financing disbursements
(gross)......................... 6 3 1
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Interest repayments......... -1 -1 -1
88.40 Principal repayments........ -1 -1 -1
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -2 -2 -2
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 2
90.00 Financing disbursements........... 4 1 -1
---------------------------------------------------------------------------

The College Housing and Academic Facilities Loans Financing Account
records all cash flows to and from the Government resulting from direct
loans made in fiscal years 1992 and 1993.

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4252-0-3-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
--------- --------- ----------
1150 Total direct loan obligations...
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 23 26 25
1231 Disbursements: Direct loan
disbursements................... 3
1251 Repayments: Repayments and
prepayments..................... -1 -1
--------- --------- ----------
1290 Outstanding, end of year........ 26 25 24
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4252-0-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Net value of assets related to
post-1991 direct loans
receivable:

1401 Direct loans receivable, gross.. 22 26 25 24
1405 Allowance for subsidy cost (-).. -4 -4 -3
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 22 22 21 21
------------ -------------- ------------ -------------
1999 Total assets.................... 22 22 21 21
LIABILITIES:
2103 Federal liabilities: Debt......... 22 22 23 23
------------ -------------- ------------ -------------
2999 Total liabilities............... 22 22 23 23
------------ -------------- ------------ -------------
4999 Total liabilities and net position 22 22 23 23
-----------------------------------------------------------------------------------------------

College Housing and Academic Facilities Loans Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 New loan awards................... 2
00.02 Interest paid to Treasury......... 18 14 14
--------- --------- ----------
10.00 Total new obligations........... 20 14 14
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 33 72
22.00 New budget authority (gross)...... 59 60 50
22.60 Portion applied to repay debt..... -118 -36
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 92 14 14
23.95 Total new obligations............. -20 -14 -14
24.40 Unobligated balance carried
forward, end of year............ 72
----------------------------------------------------------------------------

New budget authority (gross), detail:
Mandatory:

60.05 Appropriation (indefinite)...... 7 2
69.00 Offsetting collections (cash)..... 63 55 50
69.27 Capital transfer to general fund.. -4 -2 -2
--------- --------- ----------
69.90 Spending authority from
offsetting collections (total
mandatory).................... 59 53 48
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 59 60 50
----------------------------------------------------------------------------

[[Page 364]]

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

72.40 Unpaid obligations, start of
year.......................... 23 25 19
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 23 25 19
73.10 Total new obligations............. 20 14 14
73.20 Total outlays (gross)............. -17 -20 -15
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 25 19 18
--------- --------- ----------
74.99 Obligated balance, end of year 25 19 18
----------------------------------------------------------------------------

Outlays (gross), detail:
86.98 Outlays from mandatory balances... 17 20 15
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Repayments of principal..... -43 -38 -34
88.40 Interest received on loans.. -20 -17 -16
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -63 -55 -50
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -4 5
90.00 Outlays........................... -46 -35 -35
---------------------------------------------------------------------------

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. This account includes loans made under
the College Housing and Academic Facilities Loans, College Housing
Loans, and Higher Education Facilities Loans programs, which continue to
be administered separately.

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0242-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
CHAFL LIQUIDATING
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 148 144 138
1231 Disbursements: Direct loan
disbursements................... 4
1251 Repayments: Repayments and
prepayments..................... -8 -6 -5
--------- --------- ----------
1290 Outstanding, end of year........ 144 138 133
----------------------------------------------------------------------------

HIGHER EDUCATION FACILITIES
LOANS
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 30 27 24
1251 Repayments: Repayments and
prepayments..................... -3 -3 -2
--------- --------- ----------
1290 Outstanding, end of year........ 27 24 22
----------------------------------------------------------------------------

COLLEGE HOUSING LOANS
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 345 313 283
1251 Repayments: Repayments and
prepayments..................... -32 -30 -27
--------- --------- ----------
1290 Outstanding, end of year........ 313 283 256
---------------------------------------------------------------------------

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-0242-0-1-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
CHAFL LIQUIDATING:
0111 Revenue........................... 16 14 12
0112 Expense........................... -12 -21 -14
------------ -------------- ------------ -------------
0115 Net income or loss (-).......... 4 -7 -2
HIGHER EDUCATION FACILITIES LOANS:
0121 Revenue........................... 5 3 3
0122 Expense........................... -3 -1 -1
------------ -------------- ------------ -------------
0125 Net income or loss (-).......... 2 2 2
COLLEGE HOUSING LOANS:
0131 Revenue........................... 42 38 35
0132 Expense........................... -5 -38 -35
------------ -------------- ------------ -------------
0135 Net income or loss (-).......... 37
------------ -------------- ------------ -------------
0191 Total revenues.................... 63 55 50
------------ -------------- ------------ -------------
0192 Total expenses.................... -20 -60 -50
------------ -------------- ------------ -------------
0195 Total income or loss (-).......... 43 -5
------------ -------------- ------------ -------------
0199 Total comprehensive income........ 43 -5
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1601 Direct loans, gross............. 484 445 412
1602 Interest receivable............. 7 7 6
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 491 452 418
------------ -------------- ------------ -------------
1999 Total assets.................... 491 452 418
LIABILITIES:
2103 Federal liabilities: Debt......... 346 228 191
------------ -------------- ------------ -------------
2999 Total liabilities............... 346 228 191
------------ -------------- ------------ -------------
4999 Total liabilities and net position 346 228 191
-----------------------------------------------------------------------------------------------

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0242-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
43.0 Interest and dividends............ 18 14 14
44.0 Refunds........................... 2
--------- --------- ----------
99.9 Total new obligations........... 20 14 14
---------------------------------------------------------------------------

Historically Black College and University Capital Financing Direct Loan
Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct Loan Awards................ 35 30 30
00.02 Interest paid to Treasury......... 1 1 2
--------- --------- ----------
10.00 Total new obligations........... 36 31 32
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New financing authority (gross)... 60 32 33
22.70 Balance of authority to borrow
withdrawn....................... -24
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 36 32 33
23.95 Total new obligations............. -36 -31 -32
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

67.15 Authority to borrow (indefinite) 59 30 30
69.00 Offsetting collections (cash)..... 1 2 3
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 60 32 33
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 25 46
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 25 46
73.10 Total new obligations............. 36 31 32
73.20 Total financing disbursements
(gross)......................... -11 -11 -17
Unpaid obligations, end of year:

74.40 Unpaid obligations: Borrowing
Authority..................... 25 46 61
--------- --------- ----------
74.99 Obligated balance, end of year 25 46 61
87.00 Total financing disbursements
(gross)......................... 11 11 17
----------------------------------------------------------------------------

[[Page 365]]

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Interest repayments......... -1 -2 -2
88.40 Principal repayments........ -1
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -1 -2 -3
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 59 30 30
90.00 Financing disbursements........... 10 9 14
---------------------------------------------------------------------------

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. However, the Department anticipates that all HBCU loans will
be financed by the FFB.

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4255-0-3-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........ 346 311 281
1113 Unobligated limitation carried
forward......................... -311 -281 -251
--------- --------- ----------
1150 Total direct loan obligations... 35 30 30
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 11 21 30
1231 Disbursements: Direct loan
disbursements................... 10 9 15
1251 Repayments: Repayments and
prepayments..................... -1
--------- --------- ----------
1290 Outstanding, end of year........ 21 30 44
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4255-0-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Net value of assets related to
post-1991 direct loans
receivable:

1401 Direct loans receivable, gross.. 11 21 30 44
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 11 21 30 44
------------ -------------- ------------ -------------
1999 Total assets.................... 11 21 30 44
LIABILITIES:
2103 Federal liabilities: Debt......... 11 46 76 105
------------ -------------- ------------ -------------
2999 Total liabilities............... 11 46 76 105
------------ -------------- ------------ -------------
4999 Total liabilities and net position 11 46 76 105
-----------------------------------------------------------------------------------------------

OFFICE OF STUDENT FINANCIAL ASSISTANCE

Federal Funds

General and special funds:

Student Financial Assistance

For carrying out subparts 1, 3 and 4 of part A, section 428K, part C
and part E of title IV of the Higher Education Act of 1965, as amended,
[$10,674,000,000] $11,674,000,000, which shall remain available through
September 30, [2002] 2003.
The maximum Pell Grant for which a student shall be eligible during
award year [2001-2002] 2002-2003 shall be [$3,750] $3,850: 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
[2000] 2001 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. (Department of
Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
P.L. 106-554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
Federal Pell grants:

01.01 Federal Pell grants............. 10,730 8,657 9,400
Campus-based aid:

02.01 Federal supplemental educational
opportunity grants (SEOG)..... 636 693 691
02.02 Federal work-study.............. 944 1,014 1,011
02.03 Federal Perkins loans: Federal
capital contributions......... 104 100 100
02.05 Federal Perkins loans: Loan
cancellations................. 30 60 60
--------- --------- ----------
02.91 Subtotal, Campus-based
activities.................. 1,714 1,867 1,862
03.01 Leveraging educational assistance
partnership..................... 40 55 55
04.01 Loan forgiveness for child care
providers....................... 1 1
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 12,484 10,580 11,318
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 4,554 1,492 1,586
22.00 New budget authority (gross)...... 9,375 10,674 11,674
22.10 Resources available from
recoveries of prior year
obligations..................... 47
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 13,976 12,166 13,260
23.95 Total new obligations............. -12,484 -10,580 -11,318
24.40 Unobligated balance carried
forward, end of year............ 1,492 1,586 1,942
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 9,435 10,674 11,674
40.15 Appropriation (emergency)....... 10
40.76 Reduction pursuant to P.L. 106-
113........................... -70
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 9,375 10,674 11,674
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 3,176 6,476 6,995
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 3,176 6,476 6,995
73.10 Total new obligations............. 12,484 10,580 11,318
73.20 Total outlays (gross)............. -9,060 -10,061 -11,158
73.40 Adjustments in expired accounts
(net)........................... -76
73.45 Recoveries of prior year
obligations..................... -47
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 6,476 6,995 7,155
--------- --------- ----------
74.99 Obligated balance, end of year 6,476 6,995 7,155
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 2,186 2,302 2,816
86.93 Outlays from discretionary
balances........................ 6,874 7,759 8,342
--------- --------- ----------
87.00 Total outlays (gross)........... 9,060 10,061 11,158
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 9,375 10,674 11,674
90.00 Outlays........................... 9,060 10,061 11,158
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0200-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding: \1\
1210 Outstanding, start of year........ 400 394 377
1231 Disbursements: Direct loan
disbursements................... 25 25 25
1251 Repayments: Repayments and
prepayments..................... -45 -37 -30
1264 Write-offs for default: Other
adjustments, net................ 14 -5 -8
--------- --------- ----------
1290 Outstanding, end of year........ 394 377 364
---------------------------------------------------------------------------
\1\ Includes in all years institutional matching share of defaulted
notes assigned from institutions to the Education Department.

[[Page 366]]

The Administration's 2002 budget for the SFA account is $11.674
billion, an increase of $1 billion, or 9.4 percent, over the 2001
appropriation, which together with matching funds (less allowable
administrative costs) would provide over 7 million awards totalling more
than $12.9 billion in available aid.

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 proposes $9.756 billion, an increase of $1
billion or 11.4 percent over the 2001 appropriation level, for the Pell
Grant program in 2002, to raise the maximum award for the 2002-2003
award year to $3,850--the highest ever and an increase of $100 from the
2001-2002 level of $3,750. Approximately 4 million students would
receive grants under the program in the 2002-2003 award year.

Recent program data indicate that more people are applying for Pell
Grants, and more of those applying are eligible to receive aid, than was
previously forecast. As a result, the cost of funding awards for the
2001-2002 award year has increased by $117 million since 2001 funds were
appropriated; this additional need in 2001 would be funded from the
proposed $1 billion increase for 2002. In addition, the 2001
appropriation level was supplemented by $319 million in surplus funds
from prior years to fully fund the maximum award level of $3,750. No
surplus is expected to be available to supplement 2002 appropriations.
Therefore, another $436 million of the proposed $1 billion increase for
2002 is needed just to maintain the previous year's funding level,
replacing the $117 million and $319 million used for 2001. The remaining
$447 million of the $1 billion would support increasing the maximum
award by $100, to $3,850, for academic year 2002-2003 and would allow
for the possibility of further growth in program costs.

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.

Federal Supplemental Educational Opportunity Grants (SEOG).--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. The Administration proposes $691 million for the SEOG program in
2002, the same as the 2001 level. This level of funding would provide
approximately $875 million in available aid to an estimated 1.2 million
needy students.

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. To continue to provide nearly 1 million students the
opportunity to work their way through college, the Administration
proposes $1.011 billion, the same as the 2001 appropriation, for the
Work-Study program.

Perkins Loan Program.--Institutions award low-interest loans from
institutional revolving funds, which are comprised of Federal Capital
Contributions, institutional matching funds, and student repayments on
outstanding loans. The Administration proposes $100 million in new
budget authority for the Perkins loan program, the same as the 2001
level. This level of funding would provide $1.1 billion in available aid
to some 695,000 needy undergraduate and graduate students in the 2002-
2003 award year.

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.
Amendments to the Higher Education Act in 1992 and 1998 greatly expanded
the number of borrowers with loans eligible for cancellation. The
Administration's budget proposal for Perkins Loan cancellations is $60
million, the same as the 2001 level.

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 the Special Leveraging Educational Assistance
Partnership (LEAP) 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 the authorized activities may not
exceed 33\1/3\ percent. The Administration proposes $55 million for LEAP
in 2002, the same as the 2001 appropriation.

Loan Forgiveness for Child Care Providers.--Under this demonstration
program, student loan borrowers who have earned degrees in early
childhood education and worked for two full years as child care
providers in low-income communities may have a portion of their loan
obligation forgiven. Additional forgiveness is awarded for each
additional consecutive year of service, up to a total of 100 percent of
the borrower's outstanding balance after five full years. Awards are
made on a first-come, first-served basis. The Administration proposes $1
million for Loan Forgiveness for Child Care Providers in 2002, the same
as the 2001 level. Fewer than 300 recipients are expected in either 2001
or 2002.

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)

2000 actual 2001 est. 2002 est.
Pell grants......................... 7,925 9,172 9,562
Student loans:
Guaranteed student loans:
Stafford loans.................. 11,259 11,436 11,683
Unsubsidized Stafford loans..... 9,126 9,907 10,606
PLUS............................ 2,326 2,560 2,821
Direct student loans:
Stafford loans.................. 5,366 5,442 5,575

[[Page 367]]

Unsubsidized Stafford loans..... 3,807 4,129 4,420
PLUS............................ 1,175 1,290 1,419
Consolidation:
FFEL............................ 5,695 5,948 6,083
Direct Loans.................... 5,369 8,290 5,307
------------------------------------
Student loans, subtotal..... 44,124 49,002 47,914
Work-study.......................... 1,120 1,215 1,215
Supplemental educational opportunity
grants.............................. 799 875 875
Perkins loans....................... 1,084 1,113 1,113
Leveraging educational assistance
partnership......................... 90 135 135
Loan forgiveness for child care
providers........................... 1 1
------------------------------------
Total aid available......... 55,141 61,513 60,816
====================================
Note: Detail may not add to totals due to rounding.

NUMBER OF AID AWARDS

[In thousands]

2000 actual 2001 est. 2002 est.
Pell grants......................... 3,853 3,969 4,032
Student loans:
Guaranteed student loans:
Stafford loans.................. 3,293 3,345 3,377
Unsubsidized Stafford loans..... 2,244 2,408 2,524
PLUS............................ 342 366 388
Direct student loans:
Stafford loans.................. 1,552 1,535 1,553
Unsubsidized Stafford loans..... 1,010 1,028 1,078
PLUS............................ 177 183 193
Consolidation:
FFEL............................ 298 306 309
Direct Loans.................... 272 419 275
------------------------------------
Student loans, subtotal..... 9,187 9,589 9,699
Work-study.......................... 912 990 990
Supplemental educational opportunity
grants.............................. 1,087 1,190 1,190
Perkins loans....................... 677 695 695
Leveraging educational assistance
partnership......................... 90 135 135
Loan forgiveness for child care
providers........................... * *
------------------------------------
Total awards................ 15,806 16,568 16,741
====================================
Note: Detail may not add to totals due to rounding.
*Fewer than 500 recipients

AVERAGE AID AWARDS

[In whole dollars]

2000 actual 2001 est. 2002 est.
Pell grants......................... 2,057 2,311 2,371
Student loans:
Guaranteed student loans:
Stafford loans.................. 3,419 3,418 3,460
Unsubsidized Stafford loans..... 4,066 4,115 4,202
PLUS............................ 6,811 7,002 7,276
Direct student loans:
Stafford loans.................. 3,457 3,545 3,589
Unsubsidized Stafford loans..... 3,771 4,017 4,099
PLUS............................ 6,643 7,056 7,335
Consolidation:
FFEL............................ 19,122 19,429 19,666
Direct Loans.................... 19,747 19,785 19,265
Work-study.......................... 1,228 1,228 1,228
Supplemental educational opportunity
grants.............................. 735 735 735
Perkins loans....................... 1,600 1,600 1,600
Leveraging Educational Assistance
Partnership......................... 1,000 1,000 1,000
Loan Forgiveness for Child Care
Providers........................... 5,000 5,000

NUMBER OF STUDENTS AIDED

[In thousands]

2000 actual 2001 est. 2002 est.
Unduplicated student count.......... 7,778 8,145 8,191

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

ADMINISTRATIVE PAYMENTS TO INSTITUTIONS

[In millions of dollars]

2000 actual 2001 est. 2002 est.
Pell grants......................... 19 20 20
Work-study.......................... 70 76 76
Supplemental educational opportunity
grants.............................. 32 35 35
Perkins loans....................... 43 45 45

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

DEFAULTED PERKINS LOANS

(In millions of dollars)

2000 actual 2001 est. 2002 est.
Outstanding defaulted loans,
beginning of year:
Assigned defaulted loans \1\...... 400 394 377
Unassigned defaulted loans \2\.... 980 1,017 1,056
New defaulted loans................. 185 201 263
Collections on assigned loans....... -45 -37 -30
Collections on unassigned loans..... -102 -107 -113
Write-offs for assigned loans....... 14 -5 -8
Write-offs for unassigned loans..... -21 -30 -43
------------------------------------
Outstanding defaulted loans, end of
year................................ 1,411 1,433 1,502
====================================
\1\ Permanently assigned to the Federal Government for collection.
\2\ Unassigned loans at institutions.

Federal Student Loan Reserve Fund

Program and Financing (in millions of dollars)

Obligations by program activity:
01.02 Obligations, non-federal.......... 1,953 3,560 3,903
--------- --------- ----------
10.00 Total new obligations........... 1,953 3,560 3,903
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 2,093 2,232 2,329
22.00 New budget authority (gross)...... 2,092 3,657 3,962
22.40 Capital transfer to general fund.. -1,085
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 4,185 5,889 5,206
23.95 Total new obligations............. -1,953 -3,560 -3,903
24.40 Unobligated balance carried
forward, end of year............ 2,232 2,329 1,303
----------------------------------------------------------------------------

New budget authority (gross), detail:
Mandatory:

69.00 Offsetting collections (cash)... 2,092 3,657 3,962
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 1,953 3,560 3,903
73.20 Total outlays (gross)............. -1,953 -3,560 -3,903
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 1,953 3,560 3,903
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
88.00 Federal sources............... -1,646 -3,340 -3,643
88.40 Non-Federal sources........... -446 -317 -319
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -2,092 -3,657 -3,962
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -139 -97 -59
---------------------------------------------------------------------------

The Higher Education Amendments of 1998 clarified that reserve funds
held by public and non-profit guaranty agencies participating in the
Federal Family Education Loan (FFEL) program are Federal property. These
reserves are used to pay default claims from FFEL lenders and fees to
support agency efforts to successfully avert defaults. The Federal
Government reimburses these reserves for default claim payments. In
addition, optional borrower guarantee fees are deposited into the
reserves (agencies may charge borrowers up to 1 percent of loan
principal as a guarantee fee). The following schedules reflect the
balances in these guaranty agency funds.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4257-0-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 2,092 3,657 3,962
0102 Expense........................... -1,953 -3,560 -3,903
------------ -------------- ------------ -------------
0105 Net income or loss (-)............ 139 97 59
-----------------------------------------------------------------------------------------------

[[Page 368]]

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4257-0-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 2,232 2,329 1,303
------------ -------------- ------------ -------------
1999 Total assets.................... 2,232 2,329 1,303
NET POSITION:
3300 Cumulative results of operations.. 2,232 2,329 1,303
------------ -------------- ------------ -------------
3999 Total net position.............. 2,232 2,329 1,303
-----------------------------------------------------------------------------------------------

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4257-0-3-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
41.0 Grants, subsidies, and
contributions................... 294 131 139
42.0 Insurance claims and indemnities.. 1,659 3,429 3,764
--------- --------- ----------
99.9 Total new obligations........... 1,953 3,560 3,903
---------------------------------------------------------------------------

Credit accounts:

Federal Direct Student Loan Program, Program Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.05 Upward Subsidy Reestimate......... 1,085
00.06 Interest on Subsidy Reestimate.... 74
00.09 Student Loan Administrative
Expenses........................ 735 770 780
--------- --------- ----------
10.00 Total new obligations........... 735 1,929 780
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 12 11 11
22.00 New budget authority (gross)...... 735 1,929 780
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 747 1,940 791
23.95 Total new obligations............. -735 -1,929 -780
24.40 Unobligated balance carried
forward, end of year............ 11 11 11
----------------------------------------------------------------------------

New budget authority (gross), detail:
Mandatory:

60.00 Appropriation................... 735 770 780
60.05 Appropriation (indefinite)...... 1,159
--------- --------- ----------
62.50 Appropriation (total
mandatory).................. 735 1,929 780
Offsetting collections (cash):

69.00 Offsetting collections (cash)... 3,511 1,643 1,416
69.00 Offsetting collections (cash)--
Downward Reestimate........... 531
69.00 Offsetting collections (cash)--
Interest on downward
reestimate.................... 147
69.27 Capital transfer to general fund.. -3,511 -2,321 -1,416
--------- --------- ----------
69.90 Spending authority from
offsetting collections (total
mandatory)....................
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 735 1,929 780
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 300 387 437
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 300 387 437
73.10 Total new obligations............. 735 1,929 780
73.20 Total outlays (gross)............. -649 -1,879 -777
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 387 437 440
--------- --------- ----------
74.99 Obligated balance, end of year 387 437 440
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 433 1,641 492
86.98 Outlays from mandatory balances... 216 238 285
--------- --------- ----------
87.00 Total outlays (gross)........... 649 1,879 777
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -3,511 -2,321 -1,416
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -2,776 -392 -636
90.00 Outlays........................... -2,862 -442 -639
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

2000 actual 2001 est. 2002 est.
Enacted/requested:
Budget Authority.................. -2,776 -392 -636
Outlays........................... -2,862 -442 -639
Legislative proposal, subject to
PAYGO:
Budget Authority.................. 4
Outlays........................... 4
------------------------------------
Total:
Budget Authority.................. -2,776 -392 -632
Outlays........................... -2,862 -442 -635
====================================

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

----------------------------------------------------------------------------
Identification code 91-0243-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Direct loan levels supportable by subsidy
budget authority:
1150 Stafford.......................... 5,759 5,868 6,010
1150 Unsubsidized Stafford............. 4,210 4,598 4,923
1150 PLUS.............................. 1,338 1,447 1,593
1150 Consolidated...................... 4,547 8,450 5,422
--------- --------- ----------
1159 Total direct loan levels........ 15,854 20,363 17,948
Direct loan subsidy (in percent):
1320 Stafford.......................... 2.37 2.50 2.66
1320 Unsubsidized Stafford............. -23.26 -22.38 -22.20
1320 PLUS.............................. -18.07 -16.38 -16.21
1320 Consolidated...................... -7.85 -8.01 -6.96
--------- --------- ----------
1329 Weighted average subsidy rate... -9.09 -8.82 -8.74
Direct loan subsidy budget authority:
1330 Stafford.......................... 136 147 160
1330 Unsubsidized Stafford............. -979 -1,029 -1,093
1330 PLUS.............................. -242 -237 -258
1330 Consolidated...................... -357 -677 -377
1330 Subsidy Reestimate Upward......... 1,159
1330 Subsidy Reestimate Downward....... -2,442 -678
--------- --------- ----------
1339 Total subsidy budget authority.. -3,884 -1,315 -1,568
Direct loan subsidy outlays:
1340 Stafford.......................... 218 133 144
1340 Unsubsidized Stafford............. -754 -903 -966
1340 PLUS.............................. -180 -209 -225
1340 Consolidated...................... -353 -664 -369
1340 Subsidy Reestimate Upward......... 1,159
1340 Subsidy Reestimate Downward....... -2,442 -678
--------- --------- ----------
1349 Total subsidy outlays........... -3,511 -1,162 -1,416
----------------------------------------------------------------------------

Student loan administrative expense data:
3510 Budget authority.................. 735 770 780
3590 Outlays........................... 649 719 777
---------------------------------------------------------------------------

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. For 2002, 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 2002
budget, the President is proposing a change to the loan forgiveness
provisions of the Direct Loan and FFEL programs. This proposal is
discussed as part of this program description.

[[Page 369]]

From its inception in 1965 through 2000, the FFEL program has
provided over $300 billion in loans to postsecondary students and their
parents. Since July 1, 1994, the Direct Loan program has provided $72
billion in new and consolidation loans to students and parents. Taken
together, the FFEL and Direct Loan programs will make almost $35 billion
in new loans available in 2001. Because funding for these two programs
is provided on a permanent indefinite basis, for budget purposes they
are considered separately from other Federal student financial
assistance programs. The FFEL and Direct Loan programs should be viewed
in combination with these other programs, however, and with Perkins
Loans in particular, as part of the overall Federal effort to ensure
access to higher education.

Loan capital in the FFEL program is provided by private lenders.
State and private nonprofit guaranty agencies act as agents of the
Federal Government, providing a variety of services including 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 Direct Loan program was created by the Student Loan Reform Act
of 1993. Under this program, the Federal Government provides loan funds
to postsecondary institutions directly or through an alternative
originator. The Direct Loan program began operation in academic year
1994-1995 with 7 percent of overall loan volume and is expected to
account for 31 percent in academic year 2000-2001. 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.

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 3-month commercial paper rate for a given
quarter plus 2.34 percent--or 1.74 percent during in-school, grace, or
deferment periods--is higher than the current interest rate charged
borrowers.

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.
The interest rate for new FFEL and Direct 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. Interest rates for all new FFEL and Direct Consolidation
Loans are capped at 8.25 percent.

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 and FFEL lenders have the option
of paying some or all of a borrower's origination fee for Stafford Loan
borrowers. Direct Loan borrowers are charged an origination fee equal to
3 percent of principal, which partially offsets Federal program
operation costs. Borrowers in both programs may be offered financial
incentives to encourage prompt repayment.

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.

Under both programs, new borrowers after October 1, 1998, who are
employed as teachers in schools serving low-income populations for five
consecutive, complete school years, qualify for up to $5,000 in loan
forgiveness. The Administration is proposing to increase this benefit to
a maximum of $17,500 for qualifying mathematics and science teachers.

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

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, and 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)

[[Page 370]]

Total FFEL:....................... 3,350,282 (1,617.502) 3,621,994
Direct Loans:
Program:
Regular............................. (715,953) (979,179) (1,044.966)
Consolidation....................... (352,697) (664,024) (369,3640
Reestimate of Prior Year Costs......(2,442,286) 481,223
Non-Contractual Modification \2\.... 2,596
Total, Direct Loans...............(3,510,936) (1,161,980) (1,411,735)
Administration:
FFEL :\3\............................. 48,000 48,000 49,636
Student Aid \4\....................... 735,000 770,000 780,000
----------- ----------- ----------
Subtotal, Administration............ 783,000 818,000 829,636
Total, FFEL and Direct Loans........ 622,346 (1,961,482) (3,039,896)
Program Cost Outlays:
FFEL:
Liquidating \1\.......................(1,636,701) (699,345) (604,457)
Program:
Regular............................. 3,333,312 3,445,578 3,447,111
Consolidation....................... 196,823 137,409 213,499
Reestimate of Prior Year Costs...... 776,000 (4,727,793)
Non-Contractual Modification \2\.... 4,420
Subtotal, Program................. 4,306,135 (1,144,806) 3,665,029
Total, FFEL....................... 2,669,434 (1,844,15) 3,060,572
Direct Loans:
Program:
Regular............................. (715,953) (979,179) (1,044,966)
Consolidation....................... (352,697) (664,024) (369,364)
Reestimate of Prior Year Costs......(2,442,286) 481,223
Non-Contractual Modifications \2\... 2,596
Total, Direct Loans...............(3,510,936) (1,161,980) (1,411,735)
Administration:
FFEL \3\.............................. 38,038 56,092 49,808
Student Aid \4\....................... 648,696 719,495 777,164
----------- ----------- ----------
Subtotal, Administration............ 686,734 775,587 826,972
Total, FFEL and Direct Loans........ (154,768) (2,230,544) 2,475,810
\1\ Liquidating account reflects loans made prior to 1992.
\2\ Reflect the costs or savings associated with policy changes that
would affect the terms of existing loans.
\3\ Reflects annual discretionary appropriation.
\4\ Supports account maintenance fee payments to FFEL guaranty agencies,
Direct Loan origination and servicing, and a range of administrative
activities such as application printing, mailing, and processing that are
common to all Federal student financial assistance programs.

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

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
FFEL:
Stafford.............................. 11,259 11,436 11,683
Unsubsidized Stafford................. 9,126 9,907 10,606
PLUS.................................. 2,326 2,560 2,821
--------- --------- ----------
Subtotal............................ 22,711 23,903 25,111
Consolidation......................... 5,695 5,948 6,083
--------- --------- ----------
Total, FFEL......................... 28,407 29,851 31,193
Direct Loans:
Stafford.............................. 5,366 5,442 5,575
Unsubsidized Stafford................. 3,807 4,129 4,420
PLUS.................................. 1,175 1,290 1,419
--------- --------- ----------
Subtotal............................ 10,347 10,860 11,414
Consolidation....................... 5,369 8,290 5,307
--------- --------- ----------
Total, Direct Loans................. 15,717 19,150 16,721
Total, All Loans.................... 44,124 49,001 47,914
---------------------------------------------------------------------------
\1\ Net commitments equal gross commitments minus loan cancellations.

Number of Loans (In thousands)

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
FFEL:
Stafford.............................. 3,293 3,345 3,377
Unsubsidized Stafford................. 2,244 2,408 2,524
PLUS.................................. 342 366 388
--------- --------- ----------
Subtotal............................ 5,879 6,119 6,289
Consolidation......................... 298 306 309
--------- --------- ----------
Total, FFEL......................... 6,176 6,425 6,598
Direct Loans:
Stafford.............................. 1,552 1,535 1,553
Unsubsidized Stafford................. 1,010 1,028 1,078
PLUS.................................. 177 183 193
--------- --------- ----------
Subtotal............................ 2,739 2,745 2,825
Consolidation......................... 272 419 275
--------- --------- ----------
Total, Direct Loans................. 3,011 3,164 3,101
Total, All Loans.................... 9,187 9,589 9,699
---------------------------------------------------------------------------

Average Loan Size (in whole dollars)

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
FFEL:
Stafford.............................. 3,419 3,418 3,460
Unsubsidized Stafford................. 4,066 4,115 4,202
PLUS.................................. 6,811 7,002 7,276
--------- --------- ----------
Weighted Average, without
Consolidations.................... 3,863 3,906 3,993
--------- --------- ----------
Consolidation......................... 19,122 19,429 19,666
--------- --------- ----------
Weighted Average, FFEL.............. 4,599 4,646 4,728
Direct Loans:
Stafford.............................. 3,457 3,545 3,589
Unsubsidized Stafford................. 3,771 4.017 4,099
PLUS.................................. 6,643 7.056 7,335
--------- --------- ----------
Weighted Average, Direct Loans...... 3,778 3,956 4,040
--------- --------- ----------
Consolidation......................... 19,747 19,785 19,265
--------- --------- ----------
Weighted Average, Direct Loans...... 5,221 6,052 5,393
Weighted Average, All Loans......... 4,803 5,110 4,940
---------------------------------------------------------------------------

Summary of Subsidy Rates, Default and Interest Rates

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Subsidy Rates (in percent) \1\
FFEL:
Stafford.............................. 24.92 22.46 23.15
Unsubsidized Stafford................. 8.47 6.24 6.86
PLUS.................................. 5.80 3.83 3.92
Consolidation......................... 4.29 2.31 3.51
Weighted Average, FFEL.............. 14.20 11.62 12.18
Direct Loans:
Stafford.............................. 2.37 2.50 2.68
Unsubsidized Stafford................. -23.26 -22.38 -22.19
PLUS.................................. -18.07 -16.38 -16.21
Consolidation....................... -7.85 -8.01 -6.96
Weighted Average, Direct Loans...... -9.09 -8.82 -8.73
Default Rates (in percent) \2\
FFEL:
Stafford.............................. 15.68 15.80 15.80
Unsubsidized Stafford................. 14.63 14.74 14.85
PLUS.................................. 9.19 9.38 9.57
Weighted Average, FFEL.............. 16.70 16.72 16.67
Direct Loans:
Stafford.............................. 14.68 14.80 14.81
Unsubsidized Stafford................. 14.02 14.13 14.25
PLUS.................................. 8.84 8.99 9.14
Consolidation......................... 19.71 19.02 19.90
Weighted Average, Direct Loans...... 15.80 16.09 15.79
Borrower Interest Rates (in percent) \3\
FFEL:
Stafford.............................. 7.70 7.59 7.48
Unsubsidized Stafford................. 7.70 7.59 7.48
PLUS.................................. 8.57 8.70 8.62
Consolidation (reflects Sub and Unsub
Stafford Only)...................... 7.79 8.25 8.00
Direct Loans:
Stafford.............................. 7.70 7.59 7.48
Unsubsidized Stafford................. 7.70 7.59 7.48
PLUS.................................. 8.57 8.70 8.62
Consolidation (reflects Sub and Unsub
Stafford only)...................... 7.69 8.00 7.88
---------------------------------------------------------------------------
\1\ Subsidy rates represent the Federal portion of non-administrative
costs--principally interest subsidies and defaults--associated with each
borrowed dollar. For example, a $1,000 loan with Federal subsidy costs of
$100 would have a subsidy rate of 10 percent.
\2\ Default rates displayed in this table, which reflect projected
defaults over the life of a loan cohort, are used in developing program cost
estimates. The Department uses other rates based on defaults occurring in
the first two years of repayment to determine institutional eligibility to
participate in Federal loan programs. These two-year rates tend to be lower
than those included in this table.
\3\ These represent average borrower interest rates during repayment for
a typical borrower under standard repayment over the life of the loan.

[[Page 371]]

Composition of Loan Collections (In thousands of dollars)

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
FFEL:
Collections by Guaranty Agencies \1\.. 2,596,201 2,045,315 2,095,001
Collections by Department of Education
\2\................................. 634,663 423,516 431,160
Internal Revenue Service Tax Refund
Offsets............................. 927,097 716,361 715,369
Total, FFEL....................... 4,157,960 3,185,192 3,241,192
Direct Loans:
Collections by Department of Education
\2\................................. 123,507 522,619 712,330
Internal Revenue Service Tax Refund
Offsets............................. 45,144 78,553 116,066
Total, Direct Loans............... 168,652 601,172 828,396
Total, FFEL and Direct Loan......... 4,326,612 3,786,364 4,069,926
---------------------------------------------------------------------------
\1\ These figures show collections net of the amount agencies are
allowed to retain under the provisions of the Higher Education Act of 1965.
Agencies may retain 24 percent of most collections, and 18.5 percent of
amounts collected through the consolidation of existing defaulted loans.
\2\ These figures include amounts subsequently paid to Department
contract collections agencies; contract collection costs total $110 million
for 2000 ($81 million for FFEL and $29 million for Direct Loans); $171
million for 2001 ($77 million for FFEL and $95 million for Direct Loans);
and $207 million for 2002 ($78 million for FFEL and $129 million for Direct
Loans).

Projected Participation in Repayment Plans \1\ (in percent)

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Standard:
Percent of Loan Volume: \2\
Stafford.......................... 74.14 70.18 66.43
Unsubsidized Stafford............. 70.24 66.17 62.34
PLUS.............................. 77.82 77.82 77.82
Consolidation..................... 37.42 35.18 39.03
Subsidy Rate (in percent):
Stafford.......................... 5.28 5.21 5.71
Unsubsidized Stafford............. -19.53 -18.92 -18.32
PLUS.............................. -13.99 -13.14 -12.99
Consolidation..................... -0.83 -0.53 0.05
Graduated: \3\
Percent of Loan Volume \2\
Stafford.......................... 18.57 21.57 24.41
Unsubsidized Stafford............. 20.67 23.66 26.47
PLUS.............................. 16.20 16.20 16.20
Consolidation..................... 26.13 24.94 26.99
Subsidy Rate (in percent):
Stafford.......................... -6.50 -4.15 -3.55
Unsubsidized Stafford............. -34.52 -30.66 -29.92
PLUS.............................. -33.14 -28.12 -27.83
Consolidation..................... -12.73 -13.94 -12.73
Extended: \3\
Percent of Loan Volume: \2\
Stafford.......................... 5.90 6.85 7.75
Unsubsidized Stafford............. 7.51 8.59 9.61
PLUS.............................. 5.99 5.99 5.99
Consolidation..................... 15.75 16.95 14.89
Subsidy Rate (in percent):
Stafford.......................... -5.87 -3.29 -2.72
Unsubsidized Stafford............. -33.70 -29.62 -28.98
PLUS.............................. -32.67 -26.16 -25.92
Consolidation..................... -12.64 -12.74 -11.63
Income-Contingent:
Percent of Loan Volume: \2\
Stafford.......................... 1.40 1.40 1.40
Unsubsidized Stafford............. 1.58 1.58 1.58
Consolidation..................... 20.69 22.93 19.09
Subsidy Rate (in percent):
Stafford.......................... 0.39 0.32 0.49
Unsubsidized Stafford............. 0.30 0.12 0.23
Consolidation..................... -12.29 -9.53 -9.46
\1\ For modeling purposes, all FFEL borrowers are assumed to have chosen
Standard repayment. For Direct Loans, no data is included for the
Alternative repayment plan, since 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 Direct 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.

------------------------------------------------------------------------
Percent of
Volume
Within
Direct
Maximum Extended
Debt Level Term (in and
years) Graduated
Plans
(Stafford)
FY 01
------------------------------------------------------------------------
Below $10,000.................................... 12 5.73
$10,000-$20,000.................................. 15 13.24
$20,000-$40,000.................................. 20 32.00
$40,000-$60,000.................................. 25 20.74
Above $60,000.................................... 30 28.29
------------------------------------------------------------------------

The Higher Education Amendments of 1998 broadened the availability
of alternative repayment plans in the FFEL program. As noted in the
Table above, 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.

FFEL RISK CATEGORIES: STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 30.52 27.25 27.88
Category 2: 4 year college, 3rd
and 4th year students........... 21.63 20.33 21.05
Category 3: 2 year college, all
students........................ 24.98 24.19 24.97
Category 4: Proprietary school,
all students.................... 25.50 17.11 18.18
Category 5: Graduate students..... 24.22 22.07 22.74

Gross Default Rates (in percent)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 19.26 19.43 19.53
Category 2: 4 year college, 3rd
and 4th year students........... 12.64 12.73 12.79
Category 3: 2 year college, all
students........................ 30.52 30.74 30.85
Category 4: Proprietary school,
all students.................... 44.60 45.11 45.53
Category 5: Graduate students..... 8.19 8.24 8.26

UNSUBSIDIZED STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 9.79 6.73 7.44
Category 2: 4 year college, 3rd
and 4th year students........... 6.76 5.65 6.25
Category 3: 2 year college, all
students........................ 12.74 10.37 11.06
Category 4: Proprietary school,
all students.................... 17.51 8.58 9.54
Category 5: Graduate students..... 6.92 5.56 6.11

Gross Default Rates (in percent)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 19.69 19.87 20.00
Category 2: 4 year college, 3rd
and 4th year students........... 12.48 12.57 12.67
Category 3: 2 year college, all
students........................ 29.64 29.89 30.11
Category 4: Proprietary school,
all students.................... 42.85 43.47 44.00
Category 5: Graduate students..... 8.10 8.14 8.18

PLUS LOANS

Subsidy Rate (as a percentage of loan commitments)

2000 actual 2001 est. 2002 est.
All PLUS Loans.................... 5.80 3.83 3.92

Gross Default Rates (in percent)

2000 actual 2001 est. 2002 est.
All PLUS Loans.................... 9.19 9.38 9.57

[[Page 372]]

DIRECT LOAN RISK CATEGORIES: STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 7.42 7.08 7.28
Category 2: 4 year college, 3rd
and 4th year students........... -0.68 0.41 0.61
Category 3: 2 year college, all
students........................ 5.52 7.24 7.59
Category 4: Proprietary school,
all students.................... 11.50 4.24 4.84
Category 5: Graduate students..... 0.99 1.12 1.25

Gross Default Rates (in percent)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 19.35 19.52 19.61
Category 2: 4 year college, 3rd
and 4th year students........... 12.49 12.58 12.64
Category 3: 2 year college, all
students........................ 30.50 30.74 30.86
Category 4: Proprietary school,
all students.................... 44.14 44.65 45.07
Category 5: Graduate students..... 8.11 8.15 8.17

UNSUBSIDIZED STAFFORD LOANS

Subsidy Rate (as a percentage of loan commitments)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... -23.04 -21.89 -21.43
Category 2: 4 year college, 3rd
and 4th year students........... -24.74 -22.87 -22.79
Category 3: 2 year college, all
students........................ -16.90 -15.74 -15.60
Category 4: Proprietary school,
all students.................... -7.83 -14.36 -14.21
Category 5: Graduate students..... -24.96 -23.74 -23.55

Gross Default Rates (in percent)

2000 actual 2001 est. 2002 est.
Risk Categories:
Category 1: 4 year college, 1st
and 2nd year students........... 19.36 19.54 19.66
Category 2: 4 year college, 3rd
and 4th year students........... 12.27 12.36 12.45
Category 3: 2 year college, all
students........................ 29.45 29.72 29.95
Category 4: Proprietary school,
all students.................... 42.30 42.91 43.44
Category 5: Graduate students..... 8.01 8.05 8.09

PLUS LOANS

Subsidy Rate (as a percentage of loan commitments)

2000 actual 2001 est. 2002 est.
All PLUS Loans.................... -18.07 -16.38 -16.21

Gross Default Rates (in percent)

2000 actual 2001 est. 2002 est.
All PLUS Loans.................... 8.84 8.99 9.14

Selected Program Costs and Offsets \1\ (in thousands of dollars)

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
FFEL:
Interest costs:
Interest benefits:
FFEL Liquidating...................... 16,481
FFEL Program.......................... 1,926,586 2,177,225 2,121,050
----------- ----------- ----------
Total............................... 1,943,067 2,177,225 2,121,050
Special allowance:
FFEL Liquidating...................... 75,539 46,228 25,013
FFEL Program.......................... 900,126 782,745 908,788
----------- ----------- ----------
Total............................... 975,666 828,973 933,802
Default costs and offsets:
Default claims:
FFEL Liquidating...................... 86,351 115,419 62,716
FFEL Program.......................... 1,560,662 3,224,912 3,580,502
----------- ----------- ----------
Total............................... 1,647,013 3,340,331 3,643,218
Net default collections:
FFEL Liquidating...................... 2,008,624 981,554 756,467
FFEL Program.......................... 2,149,336 2,203,638 2,485,062
----------- ----------- ----------
Total............................... 4,157,960 3,185,192 3,241,530
Contract collection costs:..........
FFEL Liquidating.................... 40,912 42,060 33,584
FFEL Program.......................... 40,285 34,684 44,544
----------- ----------- ----------
Total............................... 81,197 76,743 78,128
Death, disability, and bankruptcy
costs:
FFEL Liquidating.................... 34,858 44,768 36,502
FFEL Program........................ 274,703 371,638 421,800
----------- ----------- ----------
Total............................... 309,560 416,406 458,303
Fees:
Borrower origination fees:............ 750,082 706,622 739,777
Lender origination fee................ 125,014 117,770 123,296
Sallie Mae offset fee:................ 44,723 51,368 47,374
Consolidation loan holder fees:....... 209,817 278,037 318,984
Direct Loans:
Borrower repayments:.................. 5,820,065 6,636,713 8,335,706
Borrower origination fees:........ 358,336 286,635 183,226
Net default Collections:.......... 168,652 601,172 828,396
Contact Collection Costs.......... 28,546 94,699 129,074
Administrative Costs:
Federal administration:
FFEL.............................. 48,000 48,000 49,636
Student Aid Management (SAM) \2\.. 735,000 770,000 780,000
Guaranty agency administrative
payments:
Account Maintenance Fee (included
in SAM)......................... 180,000 170,000 180,000
Loan Issuance and Processing Fee.. 149,799 176,814 185,782
----------------------------------------------------------------------------
Details may not sum to totals due to rounding.
\1\ This table represents explicit cash flows in the FFEL and Direct
Loan financing accounts. Examples of these flows would include payments of
FFEL interest benefits, default claims, and discharge claims, or collections
on FFEL or Direct Loan defaults all of which involve explicit events that
are reflected in the Department's financial systems as they occur. Non-
events, such as Direct Loan interest benefits, defaults, or discharges,
involve payments that are not received, and hence not recorded in the
Department's financial systems in the same way. For that reason, these non-
events are not included in this table.
\2\ 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.

Object Classification (in millions of dollars)

Personnel compensation:

11.1 Full-time permanent............. 33 37 39
11.5 Other personnel compensation.... 3 3 2
--------- --------- ----------
11.9 Total personnel compensation.. 36 40 41
12.1 Civilian personnel benefits....... 8 8 9
21.0 Travel and transportation of
persons......................... 6 6 5
23.1 Rental payments to GSA............ 6 7 5
23.3 Communications, utilities, and
miscellaneous charges........... 41 37 48
24.0 Printing and reproduction......... 12 8 8
25.1 Advisory and assistance services.. 1 6 6
25.2 Other services.................... 30 25 32
25.3 Purchases of goods and services
from Government accounts........ 5 1 3
25.7 Operation and maintenance of
equipment....................... 394 449 438
31.0 Equipment......................... 5 1 2
32.0 Land and structures............... 11 12 3
41.0 Grants, subsidies, and
contributions................... 180 1,329 180
--------- --------- ----------
99.9 Total new obligations........... 735 1,929 780
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0243-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 554 571 571
---------------------------------------------------------------------------

Federal Direct Student Loan Program, Program Account

(Legislative proposal, subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.03 Non contractual modification...... 3
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 3
----------------------------------------------------------------------------

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

New budget authority (gross), detail:
Mandatory:

60.05 Appropriation (indefinite)...... 3
69.00 Offsetting collections (cash)..... -1
69.27 Capital transfer to general fund.. 1
--------- --------- ----------
69.90 Spending authority from
offsetting collections (total
mandatory)....................
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 3
----------------------------------------------------------------------------

[[Page 373]]

Change in unpaid obligations:
73.10 Total new obligations............. 3
73.20 Total outlays (gross)............. -3
----------------------------------------------------------------------------

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

Offsets:
Against gross budget authority and outlays:

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

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

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

----------------------------------------------------------------------------
Identification code 91-0243-4-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Direct loan subsidy (in percent):
1320 Stafford.......................... 0.02
1320 Unsubsidized Stafford............. 0.02
--------- --------- ----------
1329 Weighted average subsidy rate... 0.01
Direct loan subsidy budget authority:
1330 Stafford.......................... 1
1330 Unsubsidized Stafford............. 1
1330 Non contractual modifications..... 2
--------- --------- ----------
1339 Total subsidy budget authority.. 4
Direct loan subsidy outlays:
1340 Stafford.......................... 1
1340 Non contractual modifications..... 2
--------- --------- ----------
1349 Total subsidy outlays........... 3
---------------------------------------------------------------------------

Federal Direct Student Loan Program, Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
Direct loans:

01.01 Stafford........................ 5,759 5,868 6,010
01.02 Unsubsidized Stafford........... 4,210 4,598 4,923
01.03 PLUS............................ 1,338 1,447 1,593
01.04 Consolidated.................... 4,547 8,450 5,422
--------- --------- ----------
01.91 Subtotal, direct loans
obligations................. 15,854 20,363 17,948
Payment for consolidations:

02.04 Consolidated.................... 26 47 31
03.01 Payment of contract collections... 29 95 129
04.01 Interest payment to Treasury...... 4,402 4,177 5,265
Other obligations:

08.01 Payment of negative subsidy to
program account............... 1,316 1,663 1,432
08.02 Payment of downward reestimate
to program account............ 2,158 531
08.04 Payment of interest on downward
reestimate to program account... 284 147
--------- --------- ----------
08.91 Subtotal, other obligations..... 3,758 2,341 1,432
--------- --------- ----------
10.00 Total new obligations........... 24,069 27,023 24,805
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 5 17
22.00 New financing authority (gross)... 24,082 27,006 24,805
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 24,087 27,023 24,805
23.95 Total new obligations............. -24,069 -27,023 -24,805
24.40 Unobligated balance carried
forward, end of year............ 17
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

67.15 Authority to borrow (indefinite) 19,612 22,687 19,381
69.00 Offsetting collections (cash)..... 7,539 8,684 9,347
69.47 Portion applied to repay debt..... -3,069 -4,365 -3,923
--------- --------- ----------
69.90 Spending authority from
offsetting collections (total
mandatory).................... 4,470 4,319 5,424
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 24,082 27,006 24,805
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 6,718 7,020 3,373
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 6,718 7,020 3,373
73.10 Total new obligations............. 24,069 27,023 24,805
73.20 Total financing disbursements
(gross)......................... -23,766 -30,670 -24,606
73.40 Adjustments in expired accounts
(net)...........................
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 7,020 3,373 3,573
--------- --------- ----------
74.99 Obligated balance, end of year 7,020 3,373 3,573
87.00 Total financing disbursements
(gross)......................... 23,766 30,670 24,606
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

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

88.00 Upward reestimate......... -1,085
88.00 Interest on upward
reestimate.............. -74
88.25 Interest on uninvested funds.. -1,191
Non-Federal sources:
Stafford loans:

88.40 Repayment of principal,
Stafford................ -1,825 -1,283 -1,647
88.40 Interest received on
loans, Stafford......... -404 -1,224 -1,428
88.40 Fees, Stafford............ -188 -139 -83
88.40 Repayment of principal,
Unsubsidized Stafford... -1,156 -820 -1,101
88.40 Interest received on
loans, Unsubsidized
Stafford................ -325 -831 -1,023
88.40 Fees, Unsubsidized
Stafford................ -131 -103 -66
88.40 Repayment of principal,
PLUS.................... -544 -257 -323
88.40 Interest received on
loans, PLUS............. -227 -347 -387
88.40 Fees, PLUS................ -40 -45 -35
88.40 Payment of principal,
Consolidated............ -955 -973 -1,342
88.40 Interest received on
loans, Consolidated..... -553 -1,503 -1,912
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -7,539 -8,684 -9,347
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 16,543 18,322 15,458
90.00 Financing disbursements........... 16,229 21,986 15,259
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4253-0-3-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
STAFFORD
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 5,759 5,868 6,010
--------- --------- ----------
1150 Total direct loan obligations... 5,759 5,868 6,010
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 19,067 23,943 28,057
1231 Disbursements: Direct loan
disbursements................... 6,557 5,436 5,510
1251 Repayments: Repayments and
prepayments..................... -1,825 -1,283 -1,647
1261 Adjustments: Capitalized interest. 119
1264 Write-offs for default: Other
adjustments, net................ 25 -39 -46
--------- --------- ----------
1290 Outstanding, end of year........ 23,943 28,057 31,874
----------------------------------------------------------------------------

UNSUBSIDIZED STAFFORD
Position with respect to appropriations act
limitation on obligations:
1131 Direct loan obligations exempt
from limitation................. 4,210 4,598 4,923
--------- --------- ----------
1150 Total direct loan obligations... 4,210 4,598 4,923
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 11,516 15,506 19,437
1231 Disbursements: Direct loan
disbursements................... 4,812 4,046 4,342
1251 Repayments: Repayments and
prepayments..................... -1,156 -820 -1,101
1261 Adjustments: Capitalized interest. 309 729 783
1264 Write-offs for default: Other
adjustments, net................ 25 -24 -29
--------- --------- ----------
1290 Outstanding, end of year........ 15,506 19,437 23,432
----------------------------------------------------------------------------

PLUS
Position with respect to appropriations act
limitation on obligations:
1131 Direct loan obligations exempt
from limitation................. 1,338 1,447 1,593
--------- --------- ----------

[[Page 374]]

1150 Total direct loan obligations... 1,338 1,447 1,593
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 2,737 3,642 4,618
1231 Disbursements: Direct loan
disbursements................... 1,396 1,255 1,380
1251 Repayments: Repayments and
prepayments..................... -544 -257 -323
1261 Adjustments: Capitalized interest. 35
1264 Write-offs for default: Other
adjustments, net................ 18 -22 -28
--------- --------- ----------
1290 Outstanding, end of year........ 3,642 4,618 5,647
----------------------------------------------------------------------------

CONSOLIDATED
Position with respect to appropriations act
limitation on obligations:
1131 Direct loan obligations exempt
from limitation................. 4,547 8,450 5,422
--------- --------- ----------
1150 Total direct loan obligations... 4,547 8,450 5,422
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 11,655 14,622 21,965
1231 Disbursements: Direct loan
disbursements................... 3,618 8,290 5,307
1251 Repayments: Repayments and
prepayments..................... -955 -973 -1,342
1261 Adjustments: Capitalized interest. 269 88 60
1264 Write-offs for default: Other
adjustments, net................ 35 -62 -90
--------- --------- ----------
1290 Outstanding, end of year........ 14,622 21,965 25,900
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4253-0-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ -6,718 7,020 3,373 3,573
Net value of assets related to
post-1991 direct loans
receivable:

Direct loans receivable, gross:
1401 Stafford...................... 19,698 23,943 28,057 31,875
1401 Unsubsidized Stafford......... 11,216 15,505 19,437 23,432
1401 PLUS.......................... 2,848 3,643 4,618 5,647
1401 Consolidated.................. 12,067 14,622 21,965 25,899
Interest receivable:
1402 Interest receivable, Stafford. 333 405 474 539
1402 Interest receivable, Unsub
Stafford.................... 405 516 647 780
1402 Interest receivable, PLUS..... 1,965 2,513 3,186 3,896
1402 Interest receivable,
Consolidated................ 427 518 777 917
1405 Allowance for subsidy cost (-).. -1,558 2,585 3,321 2,927
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 47,401 64,250 82,482 95,912
------------ -------------- ------------ -------------
1999 Total assets.................... 40,683 71,270 85,855 99,485
LIABILITIES:
2103 Federal liabilities: Debt......... 52,070 68,612 86,935 102,393
------------ -------------- ------------ -------------
2999 Total liabilities............... 52,070 68,612 86,935 102,393
NET POSITION:
3100 Appropriated capital.............. -11,386 2,657 -1,079 -2,909
------------ -------------- ------------ -------------
3999 Total net position.............. -11,386 2,657 -1,079 -2,909
------------ -------------- ------------ -------------
4999 Total liabilities and net position 40,684 71,269 85,856 99,484
-----------------------------------------------------------------------------------------------

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 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Obligations by program activity:
Other obligations:

08.01 Payment of negative subsidy to
program account............... -2
--------- --------- ----------
10.00 Total new obligations........... -2
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New financing authority (gross)... 1
23.95 Total new obligations............. 2
24.40 Unobligated balance carried
forward, end of year............ 3
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

67.15 Authority to borrow (indefinite) -2
69.00 Offsetting collections (cash)..... 3
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 1
----------------------------------------------------------------------------

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

Offsets:
Against gross financing authority and
financing disbursements:

Payments from program account:
88.00 Offsetting collections (cash)
from: Non Contractual
Modification................ -3
----------------------------------------------------------------------------

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

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4253-4-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
LIABILITIES:
2103 Federal liabilities: Debt......... -2
------------ -------------- ------------ -------------
2999 Total liabilities............... -2
NET POSITION:
3100 Appropriated capital.............. 2
------------ -------------- ------------ -------------
3999 Total net position.............. 2
-----------------------------------------------------------------------------------------------

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 of
1965, as amended, [$48,000,000] $49,636,000. (Department of Education
Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.02 Guaranteed Loan Net Subsidy....... 3,763 3,852 4,218
00.07 Upward reestimate................. 607
00.08 Interest on reestimate............ 169
Administrative expenses:

00.09 Administrative expenses due to
limitations................... 48 48 50
--------- --------- ----------
10.00 Total new obligations........... 4,587 3,900 4,268
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 4,624 3,900 4,268
23.95 Total new obligations............. -4,587 -3,900 -4,268
23.98 Unobligated balance expiring or
withdrawn....................... -37
----------------------------------------------------------------------------

[[Page 375]]

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation (Federal
administration)............... 48 48 50
Mandatory:

60.05 Appropriation (indefinite)...... 4,576 3,852 4,218
Offsetting collections (cash):

69.00 Offsetting collections (cash)--
downward reestimate........... 3,526
69.00 Offsetting collections (cash)--
interest on downward
reestimate.................... 1,202
69.27 Capital transfer to general fund.. -4,728
--------- --------- ----------
69.90 Spending authority from
offsetting collections (total
mandatory)....................
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 4,624 3,900 4,268
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 1,032 1,275 1,535
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 1,032 1,275 1,535
73.10 Total new obligations............. 4,587 3,900 4,268
73.20 Total outlays (gross)............. -4,344 -3,639 -3,708
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 1,275 1,535 2,095
--------- --------- ----------
74.99 Obligated balance, end of year 1,275 1,535 2,095
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 36 37 39
86.93 Outlays from discretionary
balances........................ 2 19 11
86.97 Outlays from new mandatory
authority....................... 3,301 2,345 2,581
86.98 Outlays from mandatory balances... 1,006 1,238 1,077
--------- --------- ----------
87.00 Total outlays (gross)........... 4,344 3,639 3,708
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -4,728
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 4,624 -828 4,268
90.00 Outlays........................... 4,344 -1,089 3,708
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

2000 actual 2001 est. 2002 est.
Enacted/requested:
Budget Authority.................. 4,624 -828 4,268
Outlays........................... 4,345 -1,089 3,708
Legislative proposal, subject to
PAYGO:
Budget Authority.................. 8
Outlays........................... 7
------------------------------------
Total:
Budget Authority.................. 4,624 -828 4,276
Outlays........................... 4,345 -1,089 3,715
====================================

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

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Guaranteed loan levels supportable by subsidy
budget authority:
2150 Stafford.......................... 10,761 12,877 13,152
2150 Unsubsidized Stafford............. 8,875 11,382 12,186
2150 PLUS.............................. 2,279 2,943 3,244
2150 Consolidated...................... 4,588 5,958 6,093
--------- --------- ----------
2159 Total loan guarantee levels..... 26,503 33,160 34,675
Guaranteed loan subsidy (in percent):
2320 Stafford.......................... 24.92 22.46 23.14
2320 Unsubsidized Stafford............. 8.47 6.24 6.85
2320 PLUS.............................. 5.80 3.83 3.92
2320 Consolidated...................... 4.29 2.31 3.51
--------- --------- ----------
2329 Weighted average subsidy rate... 14.20 11.62 12.17
Guaranteed loan subsidy budget authority:
2330 Stafford.......................... 2,682 2,892 3,043
2330 Unsubsidized Stafford............. 752 710 834
2330 PLUS.............................. 132 113 127
2330 Consolidated...................... 197 138 214
2330 Subsidy reestimate upward......... 776
2330 Subsidy reestimate downward....... -4,728
--------- --------- ----------
2339 Total subsidy budget authority.. 4,539 -875 4,218
Guaranteed loan subsidy outlays:
2340 Stafford.......................... 2,517 2,665 2,647
2340 Unsubsidized Stafford............. 690 672 692
2340 PLUS.............................. 126 109 106
2340 Consolidated...................... 197 137 213
2340 Subsidy reestimate upward......... 776
2340 Subsidy reestimate downward....... -4,728
--------- --------- ----------
2349 Total subsidy outlays........... 4,306 -1,145 3,658
----------------------------------------------------------------------------

Administrative expense data:
3510 Budget authority.................. 48 48 50
3590 Outlays........................... 38 56 50
---------------------------------------------------------------------------

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

Personnel compensation:

11.1 Full-time permanent............. 22 24 25
11.3 Other than full-time permanent.. 1
--------- --------- ----------
11.9 Total personnel compensation.. 23 24 25
12.1 Civilian personnel benefits....... 5 5 6
21.0 Travel and transportation of
persons......................... 1 1
23.1 Rental payments to GSA............ 5 4 4
23.3 Communications, utilities, and
miscellaneous charges........... 2 2 2
25.2 Other services.................... 1 4
25.3 Purchases of goods and services
from Government accounts........ 1 1 1
25.7 Operation and maintenance of
equipment....................... 9 9 6
31.0 Equipment......................... 1 1
32.0 Land and structures............... 2
41.0 Grants, subsidies, and
contributions................... 4,540 3,852 4,218
--------- --------- ----------
99.9 Total new obligations........... 4,587 3,900 4,268
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 372 368 368
---------------------------------------------------------------------------

Federal Family Education Loan Program Account

(Legislative proposal, subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.02 Guaranteed Loan Net Subsidy....... 8
--------- --------- ----------
10.00 Total new obligations (object
class 41.0)................... 8
----------------------------------------------------------------------------

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

New budget authority (gross), detail:
Mandatory:

60.05 Appropriation (indefinite)...... 8
8
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 8

[[Page 376]]

73.20 Total outlays (gross)............. -7
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 1
--------- --------- ----------
74.99 Obligated balance, end of year 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 7
----------------------------------------------------------------------------

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

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

----------------------------------------------------------------------------
Identification code 91-0231-4-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Guaranteed loan subsidy (in percent):
2320 Stafford.......................... 0.02
2320 Unsubsidized Stafford............. 0.01
--------- --------- ----------
2329 Weighted average subsidy rate... 0.01
Guaranteed loan subsidy budget authority:
2330 Stafford.......................... 2
2330 Unsubsidized Stafford............. 2
2330 Non contractual modification...... 4
--------- --------- ----------
2339 Total subsidy budget authority.. 8
Guaranteed loan subsidy outlays:
2340 Stafford.......................... 2
2340 Unsubsidized Stafford............. 1
2340 Non contractual modification...... 4
--------- --------- ----------
2349 Total subsidy outlays........... 7
----------------------------------------------------------------------------

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

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............... 1,926 2,177 2,121
01.02 Special allowance............... 799 387 434
01.03 Default claims.................. 748 1,375 1,460
01.04 Death, disability, and
bankruptcy claims............. 123 129 138
01.07 Contract collection costs....... 26 20 25
01.08 Loan Processing Fee............. 73 84 85
--------- --------- ----------
01.91 Subtotal, Stafford loans...... 3,695 4,172 4,263
Unsubsidized Stafford loans:

02.02 Special allowance............... 82 254 320
02.03 Default claims.................. 407 830 983
02.04 Death, disability, and
bankruptcy claims............. 54 65 76
02.07 Contract collection costs....... 3 5 7
02.08 Loan Processing Fee............. 61 74 79
--------- --------- ----------
02.91 Subtotal, Unsubsidized
Stafford loans.............. 607 1,228 1,465
PLUS loans:

03.02 Special allowance............... 11 21 18
03.03 Default claims.................. 70 125 145
03.04 Death, disability, and
bankruptcy claims............. 56 59 66
03.07 Contract Collection Costs....... 1 2 2
03.08 Loan Processing Fee............. 16 19 21
--------- --------- ----------
03.91 Subtotal, PLUS loans.......... 154 226 252
SLS loans:

04.02 Special allowance............... 2
04.03 Default claims.................. 49 93 66
04.04 Death, disability and bankruptcy
claims........................ 9 7 7
04.07 Contract collection costs....... 7 4 5
--------- --------- ----------
04.91 Subtotal, SLS loans........... 67 104 78
Consolidation loans:

05.02 Special allowance............... 6 120 136
05.03 Default claims.................. 286 802 927
05.04 Death, disability, and
bankruptcy claims............. 34 111 135
05.07 Contract collection costs....... 3 4 6
--------- --------- ----------
05.91 Subtotal, Consolidations loans 329 1,037 1,204
08.02 Downward reestimate............... 3,526
08.04 Interest on downward reestimate... 1,202
--------- --------- ----------
08.91 Direct Program by Activities--
Subtotal (1 level)............ 4,728
--------- --------- ----------
10.00 Total new obligations........... 4,852 11,495 7,262
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 4,990 8,250 4,165
22.00 New financing authority (gross)... 8,112 7,410 7,762
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 13,102 15,660 11,927
23.95 Total new obligations............. -4,852 -11,495 -7,262
24.40 Unobligated balance carried
forward, end of year............ 8,250 4,165 4,664
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

69.00 Offsetting collections (cash)... 8,112 7,410 7,762
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 2,152 1,361 3,224
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 2,152 1,361 3,224
73.10 Total new obligations............. 4,852 11,495 7,262
73.20 Total financing disbursements
(gross)......................... -5,643 -9,632 -8,450
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 1,361 3,224 2,037
--------- --------- ----------
74.99 Obligated balance, end of year 1,361 3,224 2,037
87.00 Total financing disbursements
(gross)......................... 5,643 9,632 8,450
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

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

88.00 Stafford loans............ -2,518 -2,665 -2,647
88.00 Unsubsidized Stafford..... -690 -672 -692
88.00 PLUS loans................ -126 -109 -106
88.00 Consolidated loans........ -197 -137 -213
88.00 Upward reestimate......... -607
88.00 Interest on upward
reestimate.............. -169
88.25 Interest on uninvested funds.. -500 -440 -359
Non-Federal sources:
Student Loans: Stafford,
Unsubsidized Stafford,
PLUS, SLS & Consolidation:

88.40 Stafford recoveries on
defaults................ -1,585 -1,192 -1,266
88.40 Stafford origination fees. -438 -399 -404
88.40 Stafford Sallie Mae offset
fees.................... -25 -28 -25
88.40 Unsubsidized Stafford
recoveries on defaults.. -159 -440 -536
88.40 Unsubsidized Stafford
origination fees........ -349 -339 -364
88.40 Unsubsidized Stafford
Sallie Mae offset fees.. -13 -17 -17
88.40 PLUS recoveries on
defaults................ -56 -65 -75
88.40 PLUS origination fees..... -88 -86 -95
88.40 PLUS Sallie Mae offset
fees.................... -5 -6 -6
88.40 SLS recoveries on defaults -187 -131 -128
88.40 SLS Sallie Mae offset fees -1 -1
88.40 Consolidation recoveries
on defaults............. -162 -375 -480
88.40 Consolidation origination
fees.................... -27 -30 -30
88.40 Consolidated loan holders
fee..................... -210 -278 -319
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -8,112 -7,410 -7,762
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... -2,469 2,222 688
---------------------------------------------------------------------------

[[Page 377]]

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-4251-0-3-502 2000 actual 2001 est. 2002 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................. 12,074 12,877 13,152
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 12,074 12,877 13,152
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 55,684 60,388 62,832
2231 Disbursements of new guaranteed
loans........................... 10,298 11,414 11,552
2251 Repayments and prepayments........ -4,473 -7,538 -8,817
Adjustments:

2261 Terminations for default that
result in loans receivable.... -998 -1,303 -1,472
2263 Terminations for default that
result in claim payments...... -123 -129 -138
--------- --------- ----------
2290 Outstanding, end of year........ 60,388 62,832 63,957
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 60,388 62,832 63,957
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 3,148 2,446 2,455
2331 Disbursements for guaranteed
loan claims................... 998 1,303 1,472
2351 Repayments of loans receivable.. -1,340 -1,192 -1,266
2361 Write-offs of loans receivable.. -112 -102 -106
2364 Other adjustments, net.......... -248
--------- --------- ----------
2390 Outstanding, end of year...... 2,446 2,455 2,555
----------------------------------------------------------------------------

UNSUBSIDIZED STAFFORD
Position with respect to appropriations act
limitation on commitments:
2131 Guaranteed loan commitments exempt
from limitation................. 10,128 11,382 12,186
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 10,128 11,382 12,186
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 30,537 36,361 41,840
2231 Disbursements of new guaranteed
loans........................... 8,181 9,673 10,389
2251 Repayments and prepayments........ -1,759 -3,349 -4,410
Adjustments:

2261 Terminations for default that
result in loans receivable.... -544 -780 -977
2263 Terminations for default that
result in claim payments...... -54 -65 -76
--------- --------- ----------
2290 Outstanding, end of year........ 36,361 41,840 46,766
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 36,361 41,840 46,766
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 748 1,050 1,331
2331 Disbursements for guaranteed
loan claims................... 544 780 977
2351 Repayments of loans receivable.. -134 -440 -536
2361 Write-offs of loans receivable.. -49 -59 -75
2364 Other adjustments, net.......... -59
--------- --------- ----------
2390 Outstanding, end of year...... 1,050 1,331 1,697
----------------------------------------------------------------------------

PLUS
Position with respect to appropriations act
limitation on commitments:
2131 Guaranteed loan commitments exempt
from limitation................. 2,626 2,943 3,244
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 2,626 2,943 3,244
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 6,630 7,470 8,553
2231 Disbursements of new guaranteed
loans........................... 2,064 2,466 2,718
2251 Repayments and prepayments........ -1,075 -1,205 -1,460
Adjustments:

2261 Terminations for default that
result in loans receivable.... -93 -119 -145
2263 Terminations for default that
result in claim payments...... -56 -59 -66
--------- --------- ----------
2290 Outstanding, end of year........ 7,470 8,553 9,600
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 7,470 8,553 9,600
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 221 199 205
2331 Disbursements for guaranteed
loan claims................... 93 119 145
2351 Repayments of loans receivable.. -47 -65 -75
2361 Write-offs of loans receivable.. -51 -48 -52
2364 Other adjustments, net.......... -17
--------- --------- ----------
2390 Outstanding, end of year...... 199 205 223
----------------------------------------------------------------------------

SLS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 2,418 2,001 1,183
2251 Repayments and prepayments........ -342 -723 -525
Adjustments:

2261 Terminations for default that
result in loans receivable.... -66 -88 -71
2263 Terminations for default that
result in claim payments...... -9 -7 -7
--------- --------- ----------
2290 Outstanding, end of year........ 2,001 1,183 580
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 2,001 1,183 580
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 606 458 408
2331 Disbursements for guaranteed
loan claims................... 66 88 71
2351 Repayments of loans receivable.. -158 -131 -128
2361 Write-offs of loans receivable.. -8 -7 -6
2364 Other adjustments, net.......... -48
--------- --------- ----------
2390 Outstanding, end of year...... 458 408 345
----------------------------------------------------------------------------

CONSOLIDATED
Position with respect to appropriations act
limitation on commitments:
2131 Guaranteed loan commitments exempt
from limitation................. 4,599 5,958 6,093
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 4,599 5,958 6,093
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 22,737 27,891 31,207
2231 Disbursements of new guaranteed
loans........................... 6,059 5,948 6,083
2251 Repayments and prepayments........ -490 -1,784 -2,221
Adjustments:

2261 Terminations for default that
result in loans receivable.... -381 -737 -924
2263 Terminations for default that
result in claim payments...... -34 -111 -135
--------- --------- ----------
2290 Outstanding, end of year........ 27,891 31,207 34,010
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 27,891 31,207 34,010
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 1,060 1,190 1,516
2331 Disbursements for guaranteed
loan claims................... 381 737 924
2351 Repayments of loans receivable.. -137 -375 -480
2361 Write-offs of loans receivable.. -31 -36 -46
2364 Other adjustments, net.......... -83
--------- --------- ----------
2390 Outstanding, end of year...... 1,190 1,516 1,914
---------------------------------------------------------------------------

[[Page 378]]

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4251-0-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 6,384 8,250 4,165 4,664
Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:

1501 Defaulted guaranteed loans
receivable, gross............. 8,701 5,342 5,913 6,732
------------ -------------- ------------ -------------
1599 Net present value of assets
related to defaulted
guaranteed loans............ 8,701 5,342 5,913 6,732
------------ -------------- ------------ -------------
1999 Total assets.................... 15,085 13,592 10,078 11,396
NET POSITION:
3100 Appropriated capital.............. 14,968 13,592 10,077 11,396
------------ -------------- ------------ -------------
3999 Total net position.............. 14,968 13,592 10,077 11,396
------------ -------------- ------------ -------------
4999 Total liabilities and net position 15,085 13,592 10,077 11,396
-----------------------------------------------------------------------------------------------

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 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New financing authority (gross)... 7
24.40 Unobligated balance carried
forward, end of year............ 7
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

69.00 Offsetting collections (cash)... 7
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

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

88.00 Stafford loans............ -2
88.00 Unsubsidized Stafford..... -1
88.00 Scheduled payments from
program account for
noncontractual
modifications........... -4
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -7
----------------------------------------------------------------------------

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

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-4251-4-3-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 7
------------ -------------- ------------ -------------
1999 Total assets.................... 7
NET POSITION:
3100 Appropriated capital.............. 7
------------ -------------- ------------ -------------
3999 Total net position.............. 7
------------ -------------- ------------ -------------
4999 Total liabilities and net position 7
-----------------------------------------------------------------------------------------------

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.............. 16
01.02 Special allowance net of
origination fees.............. 72 44 23
01.03 Default claims.................. 72 97 56
01.04 Death, disability, and
bankruptcy claims............. 30 34 27
01.07 Contract collection costs....... 31 34 28
--------- --------- ----------
01.91 Subtotal, Stafford loans...... 221 209 134
PLUS/SLS loans:

02.01 Default claims.................. 14 18 6
02.02 Death, disability, and
bankruptcy claims............. 5 11 10
02.05 Contract collection costs....... 8 8 6
02.06 Special allowance net of
origination fees.............. 3 2 2
--------- --------- ----------
02.91 Subtotal, PLUS/SLS loans...... 30 39 24
--------- --------- ----------
10.00 Total new obligations........... 251 248 158
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 3,779 578
22.00 New budget authority (gross)...... 830 248 158
22.40 Capital transfer to general fund.. -3,779 -578
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 830 248 158
23.95 Total new obligations............. -251 -248 -158
24.40 Unobligated balance carried
forward, end of year............ 578
----------------------------------------------------------------------------

New budget authority (gross), detail:
Mandatory:

60.05 Appropriation (indefinite)...... 96
69.00 Offsetting collections (cash)..... 2,018 990 762
69.27 Capital transfer to general fund.. -1,284 -742 -604
--------- --------- ----------
69.90 Spending authority from
offsetting collections (total
mandatory).................... 734 248 158
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 830 248 158
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 172 42
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 172 42
73.10 Total new obligations............. 251 248 158
73.20 Total outlays (gross)............. -383 -291 -158
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 42
--------- --------- ----------
74.99 Obligated balance, end of year 42
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 248 158
86.98 Outlays from mandatory balances... 383 42
--------- --------- ----------
87.00 Total outlays (gross)........... 383 291 158
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

88.40 Federal collections on
defaulted loans......... -468 -190 -152
88.40 Federal collections on
bankruptcies............ -8 -7 -5
88.40 Offsets against Federal
tax refunds............. -575 -235 -182
88.40 Reimbursements from
guaranty agencies....... -660 -400 -301
88.40 Federal collections on
defaulted loans, PLUS/
SLS..................... -126 -42 -33
88.40 Federal collections on
bankruptcies, PLUS/SLS.. -1 -2 -1
88.40 Offsets against Federal
tax refunds, PLUS/SLS... -73 -42 -33
88.40 Reimbursements from
guaranty agencies, PLUS/
SLS..................... -107 -72 -55
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -2,018 -990 -762
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -1,188 -742 -604

[[Page 379]]

90.00 Outlays........................... -1,637 -699 -604
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
STAFFORD LOANS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 11,470 8,670 5,953
2251 Repayments and prepayments........ -2,532 -2,574 -1,657
Adjustments:

2261 Terminations for default that
result in loans receivable.... -238 -98 -65
2263 Terminations for default that
result in claim payments...... -30 -45 -37
--------- --------- ----------
2290 Outstanding, end of year........ 8,670 5,953 4,194
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 8,670 5,953 4,194
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 14,737 13,579 12,768
2331 Disbursements for guaranteed
loan claims................... 238 98 65
2351 Repayments of loans receivable.. -1,733 -523 -396
2361 Write-offs of loans receivable.. -300 -277 -260
2364 Other adjustments, net.......... 637 -109 -81
--------- --------- ----------
2390 Outstanding, end of year...... 13,579 12,768 12,096
----------------------------------------------------------------------------

PLUS/SLS LOANS
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 1,855 1,444 1,112
2251 Repayments and prepayments........ -360 -303 -159
Adjustments:

2261 Terminations for default that
result in loans receivable.... -46 -18 -8
2263 Terminations for default that
result in claim payments...... -5 -11 -10
--------- --------- ----------
2290 Outstanding, end of year........ 1,444 1,112 935
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 1,444 1,112 935
----------------------------------------------------------------------------

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

2310 Outstanding, start of year...... 3,172 2,979 2,834
2331 Disbursements for guaranteed
loan claims................... 46 18 8
2351 Repayments of loans receivable.. -311 -93 -71
2361 Write-offs of loans receivable.. -53 -50 -47
2364 Other adjustments, net.......... 125 -20 -16
--------- --------- ----------
2390 Outstanding, end of year...... 2,979 2,834 2,708
---------------------------------------------------------------------------

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 91-0230-0-1-502 1999 actual 2000 actual 2001 est. 2002 est.
-----------------------------------------------------------------------------------------------
Stafford:
0111 Revenue........................... 1,019 1,711 832 639
0112 Expense........................... -585 -221 -211 -134
------------ -------------- ------------ -------------
0115 Net income or loss (-)............ 434 1,490 621 505
PLUS/SLS:
0121 Revenue........................... 169 307 158 123
0122 Expense........................... -66 -30 -38 -24
------------ -------------- ------------ -------------
0125 Net income or loss (-)............ 103 277 120 99
------------ -------------- ------------ -------------
0191 Total revenues.................... 1,188 2,018 990 762
------------ -------------- ------------ -------------
0192 Total expenses.................... -651 -251 -249 -158
------------ -------------- ------------ -------------
0195 Total income or loss (-).......... 537 1,767 741 604
------------ -------------- ------------ -------------
0199 Total comprehensive income........ 537 1,767 741 604
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1701 Defaulted guaranteed loans,
gross......................... 10,591 16,560 15,928 15,437
------------ -------------- ------------ -------------
1704 Defaulted guaranteed loans and
interest receivable, net.... 10,591 16,560 15,928 15,437
------------ -------------- ------------ -------------
1799 Value of assets related to
loan guarantees............. 10,591 16,560 15,928 15,437
------------ -------------- ------------ -------------
1999 Total assets.................... 10,707 16,560 15,928 15,437
NET POSITION:
3100 Appropriated capital.............. 10,707 16,560 15,928 15,437
------------ -------------- ------------ -------------
3999 Total net position.............. 10,707 16,560 15,928 15,437
-----------------------------------------------------------------------------------------------
\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 for 1992 and beyond is recorded in
corresponding program and financing accounts.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0230-0-1-502 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
25.2 Other services.................... 40 42 33
33.0 Investments and loans............. 85 115 63
41.0 Grants, subsidies, and
contributions................... 92 46 25
42.0 Insurance claims and indemnities.. 34 45 37
--------- --------- ----------
99.9 Total new obligations........... 251 248 158
---------------------------------------------------------------------------

OFFICE OF EDUCATIONAL RESEARCH AND IMPROVEMENT

Federal Funds

General and special funds:

Education Research, Statistics, and [Improvement] Assessment

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, parts A, B, K and L and sections
10102 and 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, $732,721,000] $273,067,000: Provided, [That of the funds
appropriated for part A of title X of the Elementary and Secondary
Education Act of 1965, as amended, $5,000,000 shall be made available
for a high school reform program of grants to State educational agencies
to improve academic performance and provide technical skills training:
Provided further, That of the funds appropriated for part A of title X
of the Elementary and Secondary Education Act of 1965, as amended,
$5,000,000 shall be made available to carry out part L of title X of the
Act: Provided further, That of the amount available for part A of title
X of the Elementary and Secondary Education Act of 1965, as amended,
$5,000,000 shall be available for grants to State and local educational
agencies, in collaboration with other agencies and organizations, for
school dropout prevention programs designed to address the needs of
populations or communities with the highest dropout rates: Provided
further, That of the amount made available for part A of title X of the
Elementary and Secondary Education Act of 1965, as amended, $50,000,000
shall be made available to enable the Secretary of Education to award
grants to develop, implement, and strengthen programs to teach American
history (not social studies) as a separate subject within school
curricula: Provided further,] That $53,000,000 of the amount available
for the national education research institutes

[[Page 380]]

shall be allocated notwithstanding section 912(m)(1)(B-F) and
subparagraphs (B) and (C) of section 931(c)(2) of Public Law 103-227
[and $20,000,000 of that $53,000,000 shall be made available for the
Interagency Education Research Initiative: Provided further, That of the
funds appropriated for part A of title X of the Elementary and Secondary
Education Act, as amended, $50,000,000 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 Public Law 105-277: Provided further, That the funds
made available for comprehensive school reform shall become available on
July 1, 2001, and remain available through September 30, 2002, 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 $139,624,000 of the funds for
section 10101 of the Elementary and Secondary Education Act of 1965
shall be available for the projects and in the amounts specified in the
statement of the managers on the conference report accompanying this
Act: Provided further, That of the funds appropriated under section
10601 of title X of the Elementary and Secondary Education Act of 1965,
as amended, $2,000,000 shall be used to conduct a violence prevention
demonstration program: Provided further, That of the funds available for
section 10601 of title X of the Elementary and Secondary Education Act
of 1965, as amended, $150,000 shall be awarded to the Center for
Educational Technologies to complete 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, of
the funds for title VI of Public Law 103-227 and notwithstanding the
provisions of section 601(c)(1)(C) of that Act, $1,200,000 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]. (Department of Education
Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
554.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1100-0-1-503 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Direct program:
Obligations by program activity:

Research, development and
dissemination:
00.01 Research and dissemination.... 103 120 123
00.02 Regional educational
laboratories................ 65 65 65
00.03 Statistics.................... 68 80 85
00.04 Assessment...................... 40 40
00.05 Eisenhower professional
development Federal activities 23 23
00.06 Fund for the Improvement of
Education..................... 242 341
00.07 Javits gifted and talented
education..................... 7 8
00.08 Eisenhower regional mathematics
and science education
consortia..................... 15 15
00.09 National writing project........ 9 10
00.10 Civic education................. 10 12
00.11 International education exchange 7 10
--------- --------- ----------
01.00 Total direct program.............. 589 724 273
09.01 Reimbursable program.............. 6 6 6
--------- --------- ----------
10.00 Total new obligations............. 595 730 279
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 2
22.00 New budget authority (gross)...... 597 728 279
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 597 730 279
23.95 Total new obligations............. -595 -730 -279
24.40 Unobligated balance carried
forward, end of year............ 2
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 597 733 273
40.75 Reduction pursuant to P.L. 106-
554 (Labor/HHS)............... -1
40.76 Reduction pursuant to P.L. 106-
113........................... -6
41.00 Transferred to other accounts... -10
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 591 722 273
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 6 6 6
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 597 728 279
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 682 720 725
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 682 720 725
73.10 Total new obligations............. 595 730 279
73.20 Total outlays (gross)............. -563 -725 -644
73.40 Adjustments in expired accounts
(net)........................... 5
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 720 725 360
--------- --------- ----------
74.99 Obligated balance, end of year 720 725 360
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 85 130 70
86.93 Outlays from discretionary
balances........................ 478 595 574
--------- --------- ----------
87.00 Total outlays (gross)........... 563 725 644
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

Net budget authority and outlays:
89.00 Budget authority.................. 591 722 273
90.00 Outlays........................... 556 719 638
---------------------------------------------------------------------------

The Administration is working with Congress to develop legislation
reauthorizing the National Assessment of Educational Progress. When new
authorizing legislation is enacted, resources for this program will be
requested. See the ``Legislative proposal, not subject to PAYGO''
schedule for additional details.

Research and dissemination.--Funds support the activities of the
five National Education Research Institutes, as well as interagency
research focusing on large-scale educational improvements and teaching
language minority students. Funds also support a variety of
dissemination activities that make the best research-based information
on educational practice available to educators, parents, and
policymakers.

Regional educational laboratories.--Funds support a network of 10
regional educational laboratories responsible for promoting the use of
broad-based systemic strategies to improve student achievement. The
regional laboratories conduct applied research and development,
dissemination, and technical assistance to address needs in their
regions.

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.

Summary of Budget Authority and Outlays

(in millions of dollars)

2000 actual 2001 est. 2002 est.
Enacted/requested:
Budget Authority.................. 591 722 273
Outlays........................... 557 719 638
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 109
Outlays........................... 28
------------------------------------
Total:
Budget Authority.................. 591 722 382
Outlays........................... 557 719 666
====================================

[[Page 381]]

Object Classification (in millions of dollars)

Direct obligations:

11.3 Personnel compensation: Other
than full-time permanent...... 1 1
24.0 Printing and reproduction....... 2 2 1
25.1 Advisory and assistance services 2 2
25.2 Other services.................. 70 82 70
25.3 Purchases of goods and services
from Government accounts...... 29 43 25
25.5 Research and development
contracts..................... 95 95 92
25.7 Operation and maintenance of
equipment..................... 7 7 7
41.0 Grants, subsidies, and
contributions................. 381 490 76
92.0 Undistributed................... 2 2 2
--------- --------- ----------
99.0 Subtotal, direct obligations.. 589 724 273
99.0 Reimbursable obligations.......... 6 6 6
--------- --------- ----------
99.9 Total new obligations........... 595 730 279
---------------------------------------------------------------------------

Personnel Summary

Education Research Statistics and Assessment

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1100-2-1-503 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Direct program:
Obligations by program activity:

00.04 Assessment...................... 109
--------- --------- ----------
01.00 Total direct program.............. 109
09.01 Reimbursable program.............. 1
--------- --------- ----------
10.00 Total new obligations............. 110
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 110
23.95 Total new obligations............. -110
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 109
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 1
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 110
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 110
73.20 Total outlays (gross)............. -29
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 81
--------- --------- ----------
74.99 Obligated balance, end of year 81
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 29
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

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

Net budget authority and outlays:
89.00 Budget authority.................. 109
90.00 Outlays........................... 28
---------------------------------------------------------------------------

Assessment.--The National Assessment of Educational Progress (NAEP)
administers assessments and surveys to a sample of students in order to
gather reliable information about educational attainment in important
skill areas. Under the Administration's proposal, NAEP would continue to
provide national, State and long-term trend information. In addition,
Federal funds would pay for the costs of annual State NAEP in reading
and mathematics at grades 4 and 8.

Object Classification (in millions of dollars)

Direct obligations:

Personnel compensation:
11.1 Full-time permanent........... 1
11.3 Other than full-time permanent 1
--------- --------- ----------
11.9 Total personnel compensation 2
25.1 Advisory and assistance services 1
25.2 Other services.................. 2
25.5 Research and development
contracts..................... 2
41.0 Grants, subsidies, and
contributions................. 102
--------- --------- ----------
99.0 Subtotal, direct obligations.. 109
99.0 Reimbursable obligations.......... 1
--------- --------- ----------
99.9 Total new obligations........... 110
---------------------------------------------------------------------------

Personnel Summary

DEPARTMENTAL MANAGEMENT

Federal Funds

General and special funds:

Program Administration

For carrying out, to the extent not otherwise provided, the
Department of Education Organization Act, including rental of conference
rooms in the District of Columbia and hire of two passenger motor
vehicles, [$413,184,000] $424,212,000. (Department of Education
Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
554.)

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-0800-0-1-503 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
01.99 Balance, start of year............ 1 1
Receipts:
02.00 Contributions..................... 1
--------- --------- ----------
04.00 Total: Balances and collections... 1 1 1
--------- --------- ----------
07.99 Balance, end of year.............. 1 1 1
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Program administration............ 382 412 424
00.02 Trust funds....................... 1
09.01 Reimbursable program.............. 10 1 1
--------- --------- ----------
10.00 Total new obligations........... 393 413 425
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance carried
forward, start of year.......... 2
22.00 New budget authority (gross)...... 394 413 425
22.21 Unobligated balance transferred to
other accounts.................. -1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 395 413 425
23.95 Total new obligations............. -393 -413 -425
23.98 Unobligated balance expiring or
withdrawn....................... -1
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 384 413 424
40.75 Reduction pursuant to P.L. 106-
554 (Labor/HHS)............... -1
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 384 412 424

[[Page 382]]

68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 10 1 1
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 394 413 425
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 138 148 128
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 138 148 128
73.10 Total new obligations............. 393 413 425
73.20 Total outlays (gross)............. -367 -433 -415
73.40 Adjustments in expired accounts
(net)........................... -16
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 148 128 138
--------- --------- ----------
74.99 Obligated balance, end of year 148 128 138
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 281 315 326
86.93 Outlays from discretionary
balances........................ 86 119 89
--------- --------- ----------
87.00 Total outlays (gross)........... 367 433 415
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -10 -1 -1
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 384 412 424
90.00 Outlays........................... 357 432 414
---------------------------------------------------------------------------

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, and research activities.

In addition, this account includes the cost of providing centralized
support and administrative services, overall policy development, and
strategic planning for the Department. Included in the centralized
activities are rent and mail services; telecommunciations; contractual
services; financial management and accounting, including payments to
schools, education agencies and other grant recipients, and preparation
of auditable financial statements; 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 Presidential Scholars, Satellite Town
Meetings, School Recognition, and the Gifts and Bequests Miscellaneous
Fund.

Reimbursable program.--Reimbursements to this account are for
providing administrative services to other agencies, recycling
activities, and in-kind travel.

Object Classification (in millions of dollars)

Direct obligations:

Personnel compensation:
11.1 Full-time permanent........... 155 187 195
11.3 Other than full-time permanent 25 8 9
11.5 Other personnel compensation.. 4 4 3
--------- --------- ----------
11.9 Total personnel compensation 184 199 207
12.1 Civilian personnel benefits..... 38 43 44
21.0 Travel and transportation of
persons....................... 7 7 7
23.1 Rental payments to GSA.......... 29 34 35
23.3 Communications, utilities, and
miscellaneous charges......... 12 13 13
24.0 Printing and reproduction....... 3 6 6
25.1 Advisory and assistance services 3 5 4
25.2 Other services.................. 21 23 23
25.3 Purchases of goods and services
from Government accounts...... 11 9 8
25.7 Operation and maintenance of
equipment..................... 57 57 63
26.0 Supplies and materials.......... 3 3 3
31.0 Equipment....................... 11 10 9
32.0 Land and structures............. 4 3 2
--------- --------- ----------
99.0 Subtotal, direct obligations.. 383 412 424
99.0 Reimbursable obligations.......... 9 1 1
99.5 Below reporting threshold......... 1
--------- --------- ----------
99.9 Total new obligations........... 393 413 425
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0800-0-1-503 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 2,659 2,755 2,755
---------------------------------------------------------------------------

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, [$76,000,000] $79,934,000. (Department of Education Appropriations
Act, 2001, as enacted by section 1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Civil rights...................... 71 76 80
--------- --------- ----------
10.00 Total new obligations........... 71 76 80
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 71 76 80
23.95 Total new obligations............. -71 -76 -80
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 71 76 80
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 20 23 16
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 20 23 16
73.10 Total new obligations............. 71 76 80
73.20 Total outlays (gross)............. -68 -83 -79
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 23 16 17
--------- --------- ----------
74.99 Obligated balance, end of year 23 16 17
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 61 63 68
86.93 Outlays from discretionary
balances........................ 7 20 11
--------- --------- ----------
87.00 Total outlays (gross)........... 68 83 79
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 71 76 80
90.00 Outlays........................... 68 83 79
---------------------------------------------------------------------------

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

[[Page 383]]

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)

Direct obligations:

Personnel compensation:
11.1 Full-time permanent........... 42 45 48
11.3 Other than full-time permanent 1 2 2
--------- --------- ----------
11.9 Total personnel compensation 43 47 50
12.1 Civilian personnel benefits..... 9 10 11
21.0 Travel and transportation of
persons....................... 1 1 1
23.1 Rental payments to GSA.......... 5 6 6
23.3 Communications, utilities, and
miscellaneous charges......... 2 2 2
25.2 Other services.................. 1 1 1
25.3 Purchases of goods and services
from Government accounts...... 1 1 1
25.7 Operation and maintenance of
equipment..................... 4 5 5
31.0 Equipment....................... 2 1 1
--------- --------- ----------
99.0 Subtotal, direct obligations.. 68 74 78
99.5 Below reporting threshold......... 3 2 2
--------- --------- ----------
99.9 Total new obligations........... 71 76 80
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-0700-0-1-751 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 712 724 724
---------------------------------------------------------------------------

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, [$36,500,000] $38,720,000. (Department of Education Appropriations
Act, 2001, as enacted by section 1(a)(1) of P.L. 106-554.)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Inspector General................. 34 36 39
--------- --------- ----------
10.00 Total new obligations........... 34 36 39
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 34 36 39
23.95 Total new obligations............. -34 -36 -39
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 34 36 39
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 9 10 9
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 9 10 9
73.10 Total new obligations............. 34 36 39
73.20 Total outlays (gross)............. -33 -38 -38
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 10 9 10
--------- --------- ----------
74.99 Obligated balance, end of year 10 9 10
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 27 29 32
86.93 Outlays from discretionary
balances........................ 6 8 7
--------- --------- ----------
87.00 Total outlays (gross)........... 33 38 38
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 34 36 39
90.00 Outlays........................... 33 38 38
---------------------------------------------------------------------------

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 19 20
11.3 Other than full-time permanent.. 1 1 1
11.5 Other personnel compensation.... 1
--------- --------- ----------
11.9 Total personnel compensation.. 18 20 21
12.1 Civilian personnel benefits....... 4 5 6
21.0 Travel and transportation of
persons......................... 2 2 2
23.1 Rental payments to GSA............ 3 3 3
25.1 Advisory and assistance services.. 2 2 3
25.2 Other services.................... 1 1
25.3 Purchases of goods and services
from Government accounts........ 1 1 1
25.7 Operation and maintenance of
equipment....................... 1 2 2
31.0 Equipment......................... 1 1
32.0 Land and structures............... 1
--------- --------- ----------
99.9 Total new obligations........... 34 36 39
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 91-1400-0-1-751 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 262 285 285
---------------------------------------------------------------------------

Headquarters Renovation

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 91-1500-0-1-503 2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------

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

72.40 Unpaid obligations, start of
year.......................... 3 3
--------- --------- ----------
72.99 Obligated balance, start of
year........................ 3 3
73.20 Total outlays (gross)............. -3
Unpaid obligations, end of year:

74.40 Unpaid obligations, end of year. 3
--------- --------- ----------
74.99 Obligated balance, end of year 3
----------------------------------------------------------------------------

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

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

This account provided 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 was completed in 1998, were provided by the General
Services Administration.

[[Page 384]]

GENERAL FUND RECEIPT ACCOUNTS

(in millions of dollars)

----------------------------------------------------------------------------
2000 actual 2001 est. 2002 est.
----------------------------------------------------------------------------
Offsetting receipts from the public:
91-274130 College housing and
academic facilities loan, downward
reestimates of subsidies............ 2
91-291500 Repayment of loans, capital
contributions, higher education
activities.......................... 69 50 50
91-310300 FFEL Guarantee agency
reserve recoveries.................. 59
91-310900 HEAF reserve recoveries.... 7
--------- --------- ----------
General Fund Offsetting receipts from
the public............................. 69 59 109
---------------------------------------------------------------------------

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 of
1985, 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 15 days in advance of any transfer.
[Sec. 305. The Comptroller General of the United States shall
evaluate the extent to which funds made available under part A of title
I of the Elementary and Secondary Education Act of 1965 are allocated to
schools and local educational agencies with the greatest concentrations
of school-age children from low-income families, the extent to which
allocations of such funds adjust to shifts in concentrations of pupils
from low-income families in different regions, States, and substate
areas, the extent to which the allocation of such funds encourages the
targeting of State funds to areas with higher concentrations of children
from low-income families, and the implications of current distribution
methods for such funds, shall make formula and other policy
recommendations to improve the targeting of such funds to more
effectively serve low-income children in both rural and urban areas, and
shall prepare interim and final reports based on the results of the
study, to be submitted to Congress not later than February 1, 2001, and
April 1, 2001.]
[Sec. 306. (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
same percentage of that remainder as it received of the funds
allocated to States under section 307(a)(2) of the Department of
Education Appropriations Act, 1999.
(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 are 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 fully qualified teacher in that agency, who is certified
within the State (which may include certification through State or local
alternative routes), has a baccalaureate degree, and demonstrates the
general knowledge, teaching skills, and subject matter knowledge
required to teach in his or her content areas, that agency may use funds
under this section to (A) help pay the salary of a full- or part-time
teacher hired to reduce class size, which may be in combination with
other Federal, State, or local funds; or (B) pay for activities
described in subsection (c)(2)(A)(iii) which may be related to teaching
in smaller classes.
(c)(1) The basic purpose and intent of this section is to reduce
class size with fully qualified teachers. Each local educational agency
that receives funds under this section shall use such funds to carry out
effective approaches to reducing class size with fully qualified
teachers who are certified within the State, including teachers
certified through State or local alternative routes, and who demonstrate
competency in the areas in which they teach, 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 use funds under this
section for--
(i) recruiting (including through the use of signing bonuses,
and other financial incentives), hiring, and training fully
qualified regular and special education teachers (which may include
hiring special education teachers to team-teach with regular
teachers in classrooms that contain both children with disabilities
and non-disabled children) and teachers of special-needs children
who are certified within the State, including teachers certified
through State or local alternative routes, have a baccalaureate
degree and demonstrate the general knowledge, teaching skills, and
subject matter knowledge required to teach in their content areas;
(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 (which may include such
activities as those described in section 2210 of the Elementary and
Secondary Education Act of 1965, opportunities for teachers to
attend multi-week institutes, such as those made available during
the summer months that provide intensive professional development in
partnership with local educational agencies and initiatives that
promote retention and mentoring), to teachers, including special
education teachers and teachers of special-needs children, in order
to meet the goal of ensuring that all instructional staff have the
subject matter knowledge, teaching knowledge, and teaching skills
necessary to teach effectively in the content area or areas in which
they provide instruction, consistent with title II of the Higher
Education Act of 1965.
(B)(i) Except as provided under clause (ii), a local educational
agency may use not more than a total of 25 percent of the award received
under this section for activities described in clauses (ii) and (iii) of
subparagraph (A).
(ii) A local educational agency in which 10 percent or more of
teachers in elementary schools, as defined by section 14101(14) of the
Elementary and Secondary Education Act of 1965, have not met applicable
State and local certification requirements (including certifi

[[Page 385]]

cation through State or local alternative routes), or if such
requirements have been waived, may use more than 25 percent of the funds
it receives under this section for activities described in subparagraph
(A)(iii) to help teachers who are not certified by the State become
certified, including through State or local alternative routes, or to
help teachers affected by class size reduction who lack sufficient
content knowledge to teach effectively in the areas they teach to obtain
that knowledge, if the local educational agency notifies the State
educational agency of the percentage of the funds that it will use for
the purpose described in this clause.
(C) A local educational agency that has already reduced class size
in the early grades to 18 or less children (or has already reduced class
size to a State or local class size reduction goal that was in effect on
the day before the enactment of the Department of Education
Appropriations Act, 2000, if that State or local educational agency goal
is 20 or fewer children) may use funds received under this section--
(i) to make further class size reductions in grades kindergarten
through 3;
(ii) to reduce class size in other grades; or
(iii) to carry out activities to improve teacher quality
including professional development.
(D) If a local educational agency has already reduced class size in
the early grades to 18 or fewer children and intends to use funds
provided under this section to carry out professional development
activities, including activities to improve teacher quality, then the
State shall make the award under subsection (b) to the local educational
agency.
(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
not hired under this section. Funds under this section may be used to
pay the salary of teachers hired under section 307 of the Department of
Education Appropriations Act, 1999, or under section 310 of the
Department of Education Appropriations Act, 2000.
(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 State and local educational agency receiving funds under
this section shall publicly report to parents on its progress in
reducing class size, increasing the percentage of classes in core
academic areas taught by fully qualified teachers who are certified
within the State and demonstrate competency in the content areas in
which they teach, and on the impact that hiring additional highly
qualified teachers and reducing class size, has had, if any, on
increasing student academic achievement.
(3) Each school receiving funds under this section shall provide to
parents, upon request, the professional qualifications of their child's
teacher.
(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) 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) 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.
(h) No funds under this section may be used to pay the salary of any
teacher hired with funds under section 307 of the Department of
Education Appropriations Act, 1999, unless, by the start of the 2001-
2002 school year, the teacher is certified within the State (which may
include certification through State or local alternative routes) and
demonstrates competency in the subject areas in which he or she teaches.
(i) Not later than 30 days after the date of the enactment of this
Act, the Secretary shall provide specific notification to each local
educational agency eligible to receive funds under this part regarding
the flexibility provided under subsection (c)(2)(B)(ii) and the ability
to use such funds to carry out activities described in subsection
(c)(2)(A)(iii).]
[Sec. 307. Section 412 of the National Education Statistics Act of
1994 (Public Law 103-382) is amended--
(1) in subsection 412(c)(1), after ``period of'' and before
``years,'', by striking ``3'' and inserting ``4''; and
(2) after ``expiration of such term.'', by adding the following
new subsection:
``(4) Conforming provision.--Members of the Board previously
granted 3 year terms, whose terms are in effect on the date of
enactment of the Department of Education Appropriations Act, 2001,
shall have their terms extended by one year.''.]
[Sec. 308. (a) Section 435(a)(2) of the Higher Education Act of 1965
(20 U.S.C. 1085(a)(2)) is amended by adding at the end thereof the
following new subparagraph:
``(D) Notwithstanding the first sentence of subparagraph (A), the
Secretary shall restore the eligibility to participate in a program
under subpart 1 of part A, part B, or part D of an institution that did
not appeal its loss of eligibility within 30 days of receiving
notification if the Secretary determines, on a case-by-case basis, that
the institution's failure to appeal was substantially justified under
the circumstances, and that--
``(i) the institution made a timely request that the appropriate
guaranty agency correct errors in the draft data used to calculate
the institution's cohort default rate;
``(ii) the guaranty agency did not correct the erroneous data in
a timely fashion; and
``(iii) the institution would have been eligible if the
erroneous data had been corrected by the guaranty agency.''.
(b) The amendment made by subsection (a) of this section shall be
effective for cohort default rate calculations for fiscal years 1997 and
1998.]
[Sec. 309. Section 439(r)(2) of the Higher Education Act of 1965 (20
U.S.C. 1087-2(r)(2)) is amended--
(1) in clause (A)(i), by striking ``auditors and examiners'' and
inserting ``and fix the compensation of such auditors and examiners
as may be necessary''; and
(2) by inserting at the end of subparagraph (E) the following
new subparagraph:
``(F) Compensation of auditors and examiners.--
``(i) Rates of pay.--Rates of basic pay for all auditors
and examiners appointed pursuant to subparagraph (A) may be
set and adjusted by the Secretary of the Treasury without
regard to the provisions of chapter 51 or subchapter III of
chapter 53 of title 5, United States Code.
``(ii) Comparability.--
``(I) In general.--Subject to section 5373 of title 5,
United States Code, the Secretary of the Treasury may provide
additional compensation and benefits to auditors and examiners
appointed pursuant to subparagraph (A) if the same type of
compensation or benefits are then being provided by any agency
referred to in section 1206 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b)
or, if not then being provided, could be provided by such an
agency under applicable provisions of law, rule, or regulation.
``(II) Consultation.--In setting and adjusting the total
amount of compensation and benefits for auditors and examiners
appointed pursuant to subparagraph (A), the Secretary of the
Treasury shall consult with, and seek to maintain comparability
with, the agencies referred to in section 1206 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 1833b).''.]
[Sec. 310. Section 117(i) of the Carl D. Perkins Vocational and
Technical Education Act of 1998 (20 U.S.C. 2327(i)) is amended by
inserting ``such sums as may be necessary for'' before ``each of the 4
succeeding fiscal years.''.]
[Sec. 311. Section 432(m)(1) of the Higher Education Act of 1965 (20
U.S.C. 1082(m)(1)) is amended--
(1) by striking clause (iv) of subparagraph (D); and
(2) by adding at the end the following new subparagraph:
``(E) Perfection of security interests in student
loans.--
``(i) In general.--Notwithstanding the provisions of any
State law to the contrary, including the Uniform Commercial
Code as in effect in any State, a security interest in loans
made under this part, on behalf of any eligible lender (as
defined in section 435(d)) shall attach, be perfected, and
be

[[Page 386]]

assigned priority in the manner provided by the applicable
State's law for perfection of security interests in
accounts, as such law may be amended from time to time
(including applicable transition provisions). If any such
State's law provides for a statutory lien to be created in
such loans, such statutory lien may be created by the entity
or entities governed by such State law in accordance with
the applicable statutory provisions that created such a
statutory lien.
``(ii) Collateral description.--In addition to any other
method for describing collateral in a legally sufficient
manner permitted under the laws of the State, the
description of collateral in any financing statement filed
pursuant to this subparagraph shall be deemed legally
sufficient if it lists such loans, or refers to records
(identifying such loans) retained by the secured party or
any designee of the secured party identified in such
financing statement, including the debtor or any loan
servicer.
``(iii) Sales.--Notwithstanding clauses (i) and (ii) and
any provisions of any State law to the contrary, other than
any such State's law providing for creation of a statutory
lien, an outright sale of loans made under this part shall
be effective and perfected automatically upon attachment as
defined in the Uniform Commercial Code of such State.''.]
[Sec. 312. Section 435(a)(5) of the Higher Education Act of 1965 (20
U.S.C. 1085(a)(5)) is amended--
(1) in subparagraph (A)(i), by striking ``July 1, 2002,'' and
inserting ``July 1, 2004,'';
(2) in subparagraph (B), by striking ``1999, 2000, and 2001''
and inserting ``1999 through 2003''.]
[Sec. 313. From the amounts made available for the ``Fund for the
Improvement of Education'' under the heading ``Education Research,
Statistics, and Improvement'', $10,000,000, to remain available until
expended, shall be available to the Secretary of Education to be
transferred to the Secretary of the Interior for an award to the
National Constitution Center for construction activities authorized
under Public Law 100-433.]
[Sec. 314. Section 4116(b)(4) of the Elementary and Secondary
Education Act of 1965 is amended by striking subparagraph (D) and
inserting in lieu thereof: ``(D) the development and implementation of
character education and training programs that reflect the values of
parents, teachers, and local communities, and incorporate elements of
good character, including honesty, citizenship, courage, justice,
respect, personal responsibility, and trustworthiness; and''.]
[Sec. 315. The Secretary of Education shall review the nursing
program operated by Graceland University in Lamoni, Iowa, and may
exercise the waiver authority provided in section 102(a)(3)(B) of the
Higher Education Act of 1965, without regard to the provisions of 34 CFR
600.7(b)(3)(ii), if the Secretary determines that such a waiver is
appropriate.]
[Sec. 316. Section 415 of the Higher Education Act of 1965 is
amended--
(1) in section 415A(a)(2), by striking ``section 415F'' and
inserting ``section 415E'';
(2) in section 415E, by striking 415E(c) and inserting in lieu
thereof the following:
``(c) Authorized Activities.--Each State receiving a grant under
this section may use the grant funds for--
``(1) making awards that--
``(A) supplement grants received under section 415C(b)(2) by
eligible students who demonstrate financial need; or
``(B) provide grants under section 415C(b)(2) to additional
eligible students who demonstrate financial need;
``(2) providing scholarships for eligible students--
``(A) who demonstrate financial need; and
``(B) who--
``(i) desire to enter a program of study leading to a
career in--
``(I) information technology;
``(II) mathematics, computer science, or engineering;
``(III) teaching; or
``(IV) another field determined by the State to be critical
to the State's workforce needs; or
``(ii) demonstrate merit or academic achievement; and
``(3) making awards that--
``(A) supplement community service work-study awards
received under section 415C(b)(2) by eligible students who
demonstrate financial need; or
``(B) provide community service work-study awards under
section 415C(b)(2) to additional eligible students who
demonstrate financial need.''.
(3) in section 415E, adding at the end the following new
subsections:
``(f) Special Rule.--Notwithstanding subsection (d), for purposes of
determining a State's share of the cost of the authorized activities
described in subsection (c), the State shall consider only those
expenditures from non-Federal sources that exceed its total expenditures
for need-based grants, scholarships, and work-study assistance for
fiscal year 1999 (including any such assistance provided under this
subpart).
``(g) Use of Funds for Administrative Costs Prohibited.--A State
receiving a grant under this section shall not use any of the grant
funds to pay administrative costs associated with any of the authorized
activities described in subsection (c).''.]
[Sec. 317. (a) Section 402D of the Higher Education Act of 1965 (20
U.S.C. 1070a-14) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following new
subsection:
``(c) Special Rule.--
``(1) Use for student aid.--A recipient of a grant that
undertakes any of the permissible services identified in subsection
(b) may, in addition, use such funds to provide grant aid to
students. A grant provided under this paragraph shall not exceed the
maximum appropriated Pell Grant or, be less than the minimum
appropriated Pell Grant, for the current academic year. In making
grants to students under this subsection, an institution shall
ensure that adequate consultation takes place between the student
support service program office and the institution's financial aid
office.
``(2) Eligible students.--For purposes of receiving grant aid
under this subsection, eligible students shall be current
participants in the student support services program offered by the
institution and be--
``(A) students who are in their first 2 years of
postsecondary education and who are receiving Federal Pell
Grants under subpart 1; or
``(B) students who have completed their first 2 years of
postsecondary education and who are receiving Federal Pell
Grants under subpart 1 if the institution demonstrates to
the satisfaction of the Secretary that--
``(i) these students are at high risk of dropping out;
and
``(ii) it will first meet the needs of all its eligible
first- and second-year students for services under this
paragraph.
``(3) Determination of need.--A grant provided to a student
under paragraph (1) shall not be considered in determining that
student's need for grant or work assistance under this title, except
that in no case shall the total amount of student financial
assistance awarded to a student under this title exceed that
student's cost of attendance, as defined in section 472.
``(4) Matching required.--A recipient of a grant who uses such
funds for the purpose described in paragraph (1) shall match the
funds used for such purpose, in cash, from non-Federal funds, in an
amount that is not less than 33 percent of the total amount of funds
used for that purpose. This paragraph shall not apply to any grant
recipient that is an institution of higher education eligible to
receive funds under part A or B of title III or title V.
``(5) Reservation.--In no event may a recipient use more than 20
percent of the funds received under this section for grant aid.
``(6) Supplement, not supplant.--Funds received by a grant
recipient that are used under this subsection shall be used to
supplement, and not supplant, non-Federal funds expended for student
support services programs.''.
(b) The amendments made by subsection (a) shall apply with respect
to student support services grants awarded on or after the date of
enactment of this Act.]
[Sec. 318. (a) Subparagraph (B) of section 427A(c)(4) of the Higher
Education Act of 1965 (20 U.S.C. 1077a(c)(4)) is amended to read as
follows:
``(B)(i) For any 12-month period beginning on July 1 and
ending on or before June 30, 2001, the rate determined under
this subparagraph is determined on the preceding June 1 and
is equal to--
``(I) the bond equivalent rate of 52-week Treasury bills
auctioned at the final auction held prior to such June 1; plus
``(II) 3.25 percent.

[[Page 387]]

``(ii) For any 12-month period beginning on July 1 of
2001 or any succeeding year, the rate determined under this
subparagraph is determined on the preceding June 26 and is
equal to--
``(I) the weekly average 1-year constant maturity Treasury
yield, as published by the Board of Governors of the Federal
Reserve System, for the last calendar week ending on or before
such June 26; plus
``(II) 3.25 percent.''.
(b) Subparagraph (A) of section 455(b)(4) of such Act (20 U.S.C.
1087e(b)(4)) is amended to read as follows:
``(A)(i) For Federal Direct PLUS Loans for which the
first disbursement is made on or after July 1, 1994, the
applicable rate of interest shall, during any 12-month
period beginning on July 1 and ending on or before June 30,
2001, be determined on the preceding June 1 and be equal
to--
``(I) the bond equivalent rate of 52-week Treasury bills
auctioned at final auction held prior to such June 1; plus
``(II) 3.1 percent,
except that such rate shall not exceed 9 percent.
``(ii) For any 12-month period beginning on July 1 of
2001 or any succeeding year, the applicable rate of interest
determined under this subparagraph shall be determined on
the preceding June 26 and be equal to--
``(I) the weekly average 1-year constant maturity Treasury
yield, as published by the Board of Governors of the Federal
Reserve System, for the last calendar week ending on or before
such June 26; plus
``(II) 3.1 percent,
except that such rate shall not exceed 9 percent.''.]
[Sec. 319. Section 1543 of the Higher Education Amendments of 1992
(20 U.S.C. 1070 note) is amended by adding at the end the following new
subsection:
``(e) Designation.--Scholarships awarded under this section shall be
known as `B. J. Stupak Olympic Scholarships'.''.]
[Sec. 320. (a) Subject to subsection (c), the Secretary of Education
shall release the reversionary interests that were retained by the
United States, as part of the conveyance of certain real property
situated in the County of Marin, State of California, in an April 3,
1978 Quitclaim Deed, which was filed for record on June 5, 1978, in Book
3384, at page 33, of the official Records of Marin County, California.
(b) The Secretary shall execute the release of the reversionary
interests under subsection (a) without consideration.
(c) The Secretary shall execute and file in the appropriate office
or offices a deed of release, amended deed, or other appropriate
instruments effectuating the release of the reversionary interests under
subsection (a). In all other respects the provisions of the April 3,
1978 Quitclaim Deed shall remain intact.]
[Sec. 321. (a) Grants to Native American Schools and State
Educational Agencies.--
(1) Allocation of funds.--Of the amount made available under the
heading ``School improvement programs'' for grants made in
accordance with this section for school repair and renovation,
activities under part B of the Individuals with Disabilities
Education Act (20 U.S.C. 1411 et seq.), and technology activities,
the Secretary of Education shall allocate--
(A) $75,000,000 for grants to impacted local educational
agencies (as defined in paragraph (3)) for school repair,
renovation, and construction;
(B) $3,250,000 for grants to outlying areas for school
repair and renovation in high-need schools and communities,
allocated on such basis, and subject to such terms and
conditions, as the Secretary determines appropriate;
(C) $25,000,000 for grants to public entities, private
nonprofit entities, and consortia of such entities, for use in
accordance with subpart 2 of part C of title X of the Elementary
and Secondary Education Act of 1965; and
(D) the remainder to State educational agencies in
proportion to the amount each State received under part A of
title I of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6311 et seq.) for fiscal year 2000, except that no
State shall receive less than 0.5 percent of the amount
allocated under this subparagraph.
(2) Determination of grant amount.--
(A) Determination of weighted student units.--For purposes
of computing the grant amounts under paragraph (1)(A) for fiscal
year 2001, the Secretary shall determine the results obtained by
the computation made under section 8003 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 7703) with respect to
children described in subsection (a)(1)(C) of such section and
computed under subsection (a)(2)(B) of such section for such
year--
(i) for each impacted local educational agency that
receives funds under this section; and
(ii) for all such agencies together.
(B) Computation of payment.--For fiscal year 2001, the
Secretary shall calculate the amount of a grant to an impacted
local educational agency by--
(i) dividing the amount described in paragraph (1)(A) by
the results of the computation described in subparagraph
(A)(ii); and
(ii) multiplying the number derived under clause (i) by
the results of the computation described in subparagraph
(A)(i) for such agency.
(3) Definition.--For purposes of this section, the term
``impacted local educational agency'' means, for fiscal year 2001--
(A) a local educational agency that receives a basic support
payment under section 8003(b) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7703(b)) for such fiscal year;
and
(B) with respect to which the number of children determined
under section 8003(a)(1)(C) of such Act for the preceding school
year constitutes at least 50 percent of the total student
enrollment in the schools of the agency during such school year.
(b) Within-State Allocations.--
(1) Administrative costs.--
(A) State educational agency administration.--Except as
provided in subparagraph (B), each State educational agency may
reserve not more than 1 percent of its allocation under
subsection (a)(1)(D) for the purpose of administering the
distribution of grants under this subsection.
(B) State entity administration.--If the State educational
agency transfers funds to a State entity described in paragraph
(2)(A), the agency shall transfer to such entity 0.75 of the
amount reserved under this paragraph for the purpose of
administering the distribution of grants under this subsection.
(2) Reservation for competitive school repair and renovation
grants to local educational agencies.--
(A) In general.--Subject to the reservation under paragraph
(1), of the funds allocated to a State educational agency under
subsection (a)(1)(D), the State educational agency shall
distribute 75 percent of such funds to local educational
agencies or, if such State educational agency is not responsible
for the financing of education facilities, the agency shall
transfer such funds to the State entity responsible for the
financing of education facilities (referred to in this section
as the ``State entity'') for distribution by such entity to
local educational agencies in accordance with this paragraph, to
be used, consistent with subsection (c), for school repair and
renovation.
(B) Competitive grants to local educational agencies.--
(i) In general.--The State educational agency or State
entity shall carry out a program of competitive grants to
local educational agencies for the purpose described in
subparagraph (A). Of the total amount available for
distribution to such agencies under this paragraph, the
State educational agency or State entity, shall, in carrying
out the competition--
(I) award to high poverty local educational agencies
described in clause (ii), in the aggregate, at least an amount
which bears the same relationship to such total amount as the
aggregate amount such local educational agencies received under
part A of title I of the Elementary and Secondary Education Act
of 1965 for fiscal year 2000 bears to the aggregate amount
received for such fiscal year under such part by all local
educational agencies in the State;
(II) award to rural local educational agencies in the State,
in the aggregate, at least an amount which bears the same
relationship to such total amount as the aggregate amount such
rural local educational agencies received under part A of title
I of the Elementary and Secondary Education Act of 1965 for
fiscal year 2000 bears to the aggregate amount received for such
fiscal year under such part by all local educational agencies in
the State; and
(III) award the remaining funds to local educational
agencies not receiving an award under subclause (I) or (II), in

[[Page 388]]

cluding high poverty and rural local educational agencies that
did not receive such an award.
(ii) High poverty local educational agencies.--A local
educational agency is described in this clause if--
(I) the percentage described in subparagraph (C)(i) with
respect to the agency is 30 percent or greater; or
(II) the number of children described in such subparagraph
with respect to the agency is at least 10,000.
(C) Criteria for awarding grants.--In awarding competitive
grants under this paragraph, a State educational agency or State
entity shall take into account the following criteria:
(i) The percentage of poor children 5 to 17 years of
age, inclusive, in a local educational agency.
(ii) The need of a local educational agency for school
repair and renovation, as demonstrated by the condition of
its public school facilities.
(iii) The fiscal capacity of a local educational agency
to meet its needs for repair and renovation of public school
facilities without assistance under this section, including
its ability to raise funds through the use of local bonding
capacity and otherwise.
(iv) In the case of a local educational agency that
proposes to fund a repair or renovation project for a
charter school or schools, the extent to which the school or
schools have access to funding for the project through the
financing methods available to other public schools or local
educational agencies in the State.
(v) The likelihood that the local educational agency
will maintain, in good condition, any facility whose repair
or renovation is assisted under this section.
(D) Possible matching requirement.--
(i) In general.--A State educational agency or State
entity may require local educational agencies to match funds
awarded under this subsection.
(ii) Match amount.--The amount of a match described in
clause (i) may be established by using a sliding scale that
takes into account the relative poverty of the population
served by the local educational agency.
(3) Reservation for competitive idea or technology grants to
local educational agencies.--
(A) In general.--Subject to the reservation under paragraph
(1), of the funds allocated to a State educational agency under
subsection (a)(1)(D), the State educational agency shall
distribute 25 percent of such funds to local educational
agencies through competitive grant processes, to be used for the
following:
(i) To carry out activities under part B of the
Individuals with Disabilities Education Act (20 U.S.C. 1411
et seq.).
(ii) For technology activities that are carried out in
connection with school repair and renovation, including--
(I) wiring;
(II) acquiring hardware and software;
(III) acquiring connectivity linkages and resources; and
(IV) acquiring microwave, fiber optics, cable, and satellite
transmission equipment.
(B) Criteria for awarding idea grants.--In awarding
competitive grants under subparagraph (A) to be used to carry
out activities under part B of the Individuals with Disabilities
Education Act (20 U.S.C. 1411 et seq.), a State educational
agency shall take into account the following criteria:
(i) The need of a local educational agency for
additional funds for a student whose individually allocable
cost for expenses related to the Individuals with
Disabilities Education Act substantially exceeds the State's
average per-pupil expenditure (as defined in section
14101(2) of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 8801(2))).
(ii) The need of a local educational agency for
additional funds for special education and related services
under part B of the Individuals with Disabilities Education
Act (20 U.S.C. 1411 et seq.).
(iii) The need of a local educational agency for
additional funds for assistive technology devices (as
defined in section 602 of the Individuals with Disabilities
Education Act (20 U.S.C. 1401)) or assistive technology
services (as so defined) for children being served under
part B of the Individuals with Disabilities Education Act
(20 U.S.C. 1411 et seq.).
(iv) The need of a local educational agency for
additional funds for activities under part B of the
Individuals with Disabilities Education Act (20 U.S.C. 1411
et seq.) in order for children with disabilities to make
progress toward meeting the performance goals and indicators
established by the State under section 612(a)(16) of such
Act (20 U.S.C. 1412).
(C) Criteria for awarding technology grants.--In awarding
competitive grants under subparagraph (A) to be used for
technology activities that are carried out in connection with
school repair and renovation, a State educational agency shall
take into account the need of a local educational agency for
additional funds for such activities, including the need for the
activities described in subclauses (I) through (IV) of
subparagraph (A)(ii).
(c) Rules Applicable to School Repair and Renovation.--With respect
to funds made available under this section that are used for school
repair and renovation, the following rules shall apply:
(1) Permissible uses of funds.--School repair and renovation
shall be limited to one or more of the following:
(A) Emergency repairs or renovations to public school
facilities only to ensure the health and safety of students and
staff, including--
(i) repairing, replacing, or installing roofs,
electrical wiring, plumbing systems, or sewage systems;
(ii) repairing, replacing, or installing heating,
ventilation, or air conditioning systems (including
insulation); and
(iii) bringing public schools into compliance with fire
and safety codes.
(B) School facilities modifications necessary to render
public school facilities accessible in order to comply with the
Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.).
(C) School facilities modifications necessary to render
public school facilities accessible in order to comply with
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794).
(D) Asbestos abatement or removal from public school
facilities.
(E) Renovation, repair, and acquisition needs related to the
building infrastructure of a charter school.
(2) Impermissible uses of funds.--No funds received under this
section may be used for--
(A) payment of maintenance costs in connection with any
projects constructed in whole or part with Federal funds
provided under this section;
(B) the construction of new facilities, except for
facilities for an impacted local educational agency (as defined
in subsection (a)(3)); or
(C) stadiums or other facilities primarily used for athletic
contests or exhibitions or other events for which admission is
charged to the general public.
(3) Charter schools.--A public charter school that constitutes a
local educational agency under State law shall be eligible for
assistance under the same terms and conditions as any other local
educational agency (as defined in section 14101(18) of the
Elementary and Secondary Education Act of 1965 (20 U.S.C.
8801(18))).
(4) Supplement, not supplant.--Excluding the uses described in
subparagraphs (B) and (C) of paragraph (1), a local educational
agency shall use Federal funds subject to this subsection only to
supplement the amount of funds that would, in the absence of such
Federal funds, be made available from non-Federal sources for school
repair and renovation.
(d) Special Rule.--Each local educational agency that receives funds
under this section shall ensure that, if it carries out repair or
renovation through a contract, any such contract process ensures the
maximum number of qualified bidders, including small, minority, and
women-owned businesses, through full and open competition.
(e) Public Comment.--Each local educational agency receiving funds
under paragraph (2) or (3) of subsection (b)--
(1) shall provide parents, educators, and all other interested
members of the community the opportunity to consult on the use of
funds received under such paragraph;
(2) shall provide the public with adequate and efficient notice
of the opportunity described in paragraph (1) in a widely read and
distributed medium; and
(3) shall provide the opportunity described in paragraph (1) in
accordance with any applicable State and local law specifying how
the comments may be received and how the comments may be reviewed by
any member of the public.
(f) Reporting.--
(1) Local reporting.--Each local educational agency receiving
funds under subsection (a)(1)(D) shall submit a report to the State

[[Page 389]]

educational agency, at such time as the State educational agency may
require, describing the use of such funds for--
(A) school repair and renovation (and construction, in the
case of an impacted local educational agency (as defined in
subsection (a)(3)));
(B) activities under part B of the Individuals with
Disabilities Education Act (20 U.S.C. 1411 et seq.); and
(C) technology activities that are carried out in connection
with school repair and renovation, including the activities
described in subclauses (I) through (IV) of subsection
(b)(3)(A)(ii).
(2) State reporting.--Each State educational agency shall submit
to the Secretary of Education, not later than December 31, 2002, a
report on the use of funds received under subsection (a)(1)(D) by
local educational agencies for--
(A) school repair and renovation (and construction, in the
case of an impacted local educational agency (as defined in
subsection (a)(3)));
(B) activities under part B of the Individuals with
Disabilities Education Act (20 U.S.C. 1411 et seq.); and
(C) technology activities that are carried out in connection
with school repair and renovation, including the activities
described in subclauses (I) through (IV) of subsection
(b)(3)(A)(ii).
(3) Additional reports.--Each entity receiving funds allocated
under subsection (a)(1)(A) or (B) shall submit to the Secretary, not
later than December 31, 2002, a report on its uses of funds under
this section, in such form and containing such information as the
Secretary may require.
(g) Applicability of Part B of IDEA.--If a local educational agency
uses funds received under this section to carry out activities under
part B of the Individuals with Disabilities Education Act (20 U.S.C.
1411 et seq.), such part (including provisions respecting the
participation of private school children), and any other provision of
law that applies to such part, shall apply to such use.
(h) Reallocation.--If a State educational agency does not apply for
an allocation of funds under subsection (a)(1)(D) for fiscal year 2001,
or does not use its entire allocation for such fiscal year, the
Secretary may reallocate the amount of the State educational agency's
allocation (or the remainder thereof, as the case may be) to the
remaining State educational agencies in accordance with subsection
(a)(1)(D).
(i) Participation of Private Schools.--
(1) In general.--Section 6402 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7372) shall apply to subsection
(b)(2) in the same manner as it applies to activities under title VI
of such Act, except that--
(A) such section shall not apply with respect to the title
to any real property renovated or repaired with assistance
provided under this section;
(B) the term ``services'' as used in section 6402 of such
Act with respect to funds under this section shall be provided
only to private, nonprofit elementary or secondary schools with
a rate of child poverty of at least 40 percent and may include
for purposes of subsection (b)(2) only--
(i) modifications of school facilities necessary to meet the
standards applicable to public schools under the Americans with
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.);
(ii) modifications of school facilities necessary to meet
the standards applicable to public schools under section 504 of
the Rehabilitation Act of 1973 (29 U.S.C. 794); and
(iii) asbestos abatement or removal from school facilities;
and
(C) notwithstanding the requirements of section 6402(b) of
the Elementary and Secondary Education Act of 1965 (20 U.S.C.
7372(b)), expenditures for services provided using funds made
available under subsection (b)(2) shall be considered equal for
purposes of such section if the per-pupil expenditures for
services described in subparagraph (B) for students enrolled in
private nonprofit elementary and secondary schools that have
child poverty rates of at least 40 percent are consistent with
the per-pupil expenditures under this section for children
enrolled in the public schools in the school district of the
local educational agency receiving funds under this section.
(2) Remaining funds.--If the expenditure for services described
in paragraph (1)(B) is less than the amount calculated under
paragraph (1)(C) because of insufficient need for such services, the
remainder shall be available to the local educational agency for
renovation and repair of public school facilities.
(3) Application.--If any provision of this section, or the
application thereof, to any person or circumstances is judicially
determined to be invalid, the provisions of the remainder of the
section and the application to other persons or circumstances shall
not be affected thereby.
(j) Definitions.--For purposes of this section:
(1) Charter school.--The term ``charter school'' has the meaning
given such term in section 10310(1) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 8066(1)).
(2) Elementary school.--The term ``elementary school'' has the
meaning given such term in section 14101(14) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 8801(14)).
(3) Local educational agency.--The term ``local educational
agency'' has the meaning given such term in subparagraphs (A) and
(B) of section 14101(18) of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 8801(18)).
(4) Outlying area.--The term ``outlying area'' has the meaning
given such term in section 14101(21) of the Elementary and Secondary
Act of 1965 (20 U.S.C. 8801(21)).
(5) Poor children and child poverty.--The terms ``poor
children'' and ``child poverty'' refer to children 5 to 17 years of
age, inclusive, who are 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 (42 U.S.C. 9902(2)) applicable to a family of the size
involved for the most recent fiscal year for which data satisfactory
to the Secretary are available.
(6) Rural local educational agency.--The term ``rural local
educational agency'' means a local educational agency that the State
determines is located in a rural area using objective data and a
commonly employed definition of the term ``rural''.
(7) Secondary school.--The term ``secondary school'' has the
meaning given such term in section 14101(25) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 8801(25)).
(8) State.--The term ``State'' means each of the 50 states, the
District of Columbia, and the Commonwealth of Puerto Rico.]
[Sec. 322. (a) Part C of title X of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 8061 et seq.) is amended--
(1) by inserting after the part heading the following:
``Subpart 1--Basic Charter School Grant Program'';
and
(2) by adding at the end the following:
``Subpart 2--Credit Enhancement Initiatives To Assist
Charter School Facility Acquisition, Construction, and
Renovation

``SEC. 10321. PURPOSE.

``The purpose of this subpart is to provide one-time grants to
eligible entities to permit them to demonstrate innovative credit
enhancement initiatives that assist charter schools to address the cost
of acquiring, constructing, and renovating facilities.

``SEC. 10322. GRANTS TO ELIGIBLE ENTITIES.

``(a) In General.--The Secretary shall use 100 percent of the amount
available to carry out this subpart to award not less than 3 grants to
eligible entities having applications approved under this subpart to
demonstrate innovative methods of assisting charter schools to address
the cost of acquiring, constructing, and renovating facilities by
enhancing the availability of loans or bond financing.
``(b) Grantee Selection.--The Secretary shall evaluate each
application submitted, and shall make a determination of which are
sufficient to merit approval and which are not. The Secretary shall
award at least one grant to an eligible entity described in section
10330(2)(A), at least one grant to an eligible entity described in
section 10330(2)(B), and at least one grant to an eligible entity
described in section 10330(2)(C), if applications are submitted that
permit the Secretary to do so without approving an application that is
not of sufficient quality to merit approval.
``(c) Grant Characteristics.--Grants under this subpart shall be of
a sufficient size, scope, and quality so as to ensure an effective
demonstration of an innovative means of enhancing credit for the
financing of charter school acquisition, construction, or renovation.
``(d) Special Rule.--In the event the Secretary determines that the
funds available are insufficient to permit the Secretary to award not
less than 3 grants in accordance with subsections (a) through (c), such
3-grant minimum and the second sentence of subsection (b) shall not
apply, and the Secretary may determine the appropriate number of grants
to be awarded in accordance with subsection (c).

[[Page 390]]

``SEC. 10323. APPLICATIONS.

``(a) In General.--To receive a grant under this subpart, an
eligible entity shall submit to the Secretary an application in such
form as the Secretary may reasonably require.
``(b) Contents.--An application under subsection (a) shall contain--
``(1) a statement identifying the activities proposed to be
undertaken with funds received under this subpart, including how the
applicant will determine which charter schools will receive
assistance, and how much and what types of assistance charter
schools will receive;
``(2) a description of the involvement of charter schools in the
application's development and the design of the proposed activities;
``(3) a description of the applicant's expertise in capital
market financing;
``(4) a description of how the proposed activities will leverage
the maximum amount of private-sector financing capital relative to
the amount of government funding used and otherwise enhance credit
available to charter schools;
``(5) a description of how the applicant possesses sufficient
expertise in education to evaluate the likelihood of success of a
charter school program for which facilities financing is sought;
``(6) in the case of an application submitted by a State
governmental entity, a description of the actions that the entity
has taken, or will take, to ensure that charter schools within the
State receive the funding they need to have adequate facilities; and
``(7) such other information as the Secretary may reasonably
require.

``SEC. 10324. CHARTER SCHOOL OBJECTIVES.

``An eligible entity receiving a grant under this subpart shall use
the funds deposited in the reserve account established under section
10325(a) to assist one or more charter schools to access private sector
capital to accomplish one or both of the following objectives:
``(1) The acquisition (by purchase, lease, donation, or
otherwise) of an interest (including an interest held by a third
party for the benefit of a charter school) in improved or unimproved
real property that is necessary to commence or continue the
operation of a charter school.
``(2) The construction of new facilities, or the renovation,
repair, or alteration of existing facilities, necessary to commence
or continue the operation of a charter school.

``SEC. 10325. RESERVE ACCOUNT.

``(a) Use of Funds.--To assist charter schools to accomplish the
objectives described in section 10324, an eligible entity receiving a
grant under this subpart shall, in accordance with State and local law,
directly or indirectly, alone or in collaboration with others, deposit
the funds received under this subpart (other than funds used for
administrative costs in accordance with section 10326) in a reserve
account established and maintained by the entity for this purpose.
Amounts deposited in such account shall be used by the entity for one or
more of the following purposes:
``(1) Guaranteeing, insuring, and reinsuring bonds, notes,
evidences of debt, loans, and interests therein, the proceeds of
which are used for an objective described in section 10324.
``(2) Guaranteeing and insuring leases of personal and real
property for an objective described in section 10324.
``(3) Facilitating financing by identifying potential lending
sources, encouraging private lending, and other similar activities
that directly promote lending to, or for the benefit of, charter
schools.
``(4) Facilitating the issuance of bonds by charter schools, or
by other public entities for the benefit of charter schools, by
providing technical, administrative, and other appropriate
assistance (including the recruitment of bond counsel, underwriters,
and potential investors and the consolidation of multiple charter
school projects within a single bond issue).
``(b) Investment.--Funds received under this subpart and deposited
in the reserve account shall be invested in obligations issued or
guaranteed by the United States or a State, or in other similarly low-
risk securities.
``(c) Reinvestment of Earnings.--Any earnings on funds received
under this subpart shall be deposited in the reserve account established
under subsection (a) and used in accordance with such subsection.

``SEC. 10326. LIMITATION ON ADMINISTRATIVE COSTS.

``An eligible entity may use not more than 0.25 percent of the funds
received under this subpart for the administrative costs of carrying out
its responsibilities under this subpart.

``SEC. 10327. AUDITS AND REPORTS.

``(a) Financial Record Maintenance and Audit.--The financial records
of each eligible entity receiving a grant under this subpart shall be
maintained in accordance with generally accepted accounting principles
and shall be subject to an annual audit by an independent public
accountant.
``(b) Reports.--
``(1) Grantee annual reports.--Each eligible entity receiving a
grant under this subpart annually shall submit to the Secretary a
report of its operations and activities under this subpart.
``(2) Contents.--Each such annual report shall include--
``(A) a copy of the most recent financial statements,
and any accompanying opinion on such statements, prepared by
the independent public accountant reviewing the financial
records of the eligible entity;
``(B) a copy of any report made on an audit of the
financial records of the eligible entity that was conducted
under subsection (a) during the reporting period;
``(C) an evaluation by the eligible entity of the
effectiveness of its use of the Federal funds provided under
this subpart in leveraging private funds;
``(D) a listing and description of the charter schools
served during the reporting period;
``(E) a description of the activities carried out by the
eligible entity to assist charter schools in meeting the
objectives set forth in section 10324; and
``(F) a description of the characteristics of lenders
and other financial institutions participating in the
activities undertaken by the eligible entity under this
subpart during the reporting period.
``(3) Secretarial report.--The Secretary shall review the
reports submitted under paragraph (1) and shall provide a
comprehensive annual report to the Congress on the activities
conducted under this subpart.

``SEC. 10328. NO FULL FAITH AND CREDIT FOR GRANTEE OBLIGATIONS.

``No financial obligation of an eligible entity entered into
pursuant to this subpart (such as an obligation under a guarantee, bond,
note, evidence of debt, or loan) shall be an obligation of, or
guaranteed in any respect by, the United States. The full faith and
credit of the United States is not pledged to the payment of funds which
may be required to be paid under any obligation made by an eligible
entity pursuant to any provision of this subpart.

``SEC. 10329. RECOVERY OF FUNDS.

``(a) In General.--The Secretary, in accordance with chapter 37 of
title 31, United States Code, shall collect--
``(1) all of the funds in a reserve account established by an
eligible entity under section 10325(a) if the Secretary determines,
not earlier than 2 years after the date on which the entity first
received funds under this subpart, that the entity has failed to
make substantial progress in carrying out the purposes described in
section 10325(a); or
``(2) all or a portion of the funds in a reserve account
established by an eligible entity under section 10325(a) if the
Secretary determines that the eligible entity has permanently ceased
to use all or a portion of the funds in such account to accomplish
any purpose described in section 10325(a).
``(b) Exercise of Authority.--The Secretary shall not exercise the
authority provided in subsection (a) to collect from any eligible entity
any funds that are being properly used to achieve one or more of the
purposes described in section 10325(a).
``(c) Procedures.--The provisions of sections 451, 452, and 458 of
the General Education Provisions Act (20 U.S.C. 1234 et seq.) shall
apply to the recovery of funds under subsection (a).
``(d) Construction.--This section shall not be construed to impair
or affect the authority of the Secretary to recover funds under part D
of the General Education Provisions Act (20 U.S.C. 1234 et seq.).

``SEC. 10330. DEFINITIONS.

``In this subpart:
``(1) The term `charter school' has the meaning given such term
in section 10310.

[[Page 391]]

``(2) The term `eligible entity' means--
``(A) a public entity, such as a State or local
governmental entity;
``(B) a private nonprofit entity; or
``(C) a consortium of entities described in
subparagraphs (A) and (B).

``SEC. 10331. AUTHORIZATION OF APPROPRIATIONS.

``For the purpose of carrying out this subpart, there are authorized
to be appropriated $100,000,000 for fiscal year 2001.''.
(b) Part C of title X of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 8061 et seq.) is amended in each of the following
provisions by striking ``part'' each place such term appears and
inserting ``subpart'':
(1) Sections 10301 through 10305.
(2) Section 10307.
(3) Sections 10309 through 10311.
Sec. 323. (a) Section 8003(b)(2)(F) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7703(b)(2)(F)) is amended--
(1) by striking ``the Secretary shall use'' and inserting ``the
Secretary--
``(i) shall use'';
(2) by striking the period at the end and inserting ``; and'';
and
(3) by adding at the end the following:
``(ii) except as provided in subparagraph (C)(i)(I),
shall include all of the children described in subparagraphs
(F) and (G) of subsection (a)(1) enrolled in schools of the
local educational agency in determining (I) the eligibility
of the agency for assistance under this paragraph, and (II)
the amount of such assistance if the number of such children
meet the requirements of subsection (a)(3).''.
(b) Section 8003(b)(2) of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 7703(b)(2)) is amended by adding at the end the
following:
``(G) Determination of average tax rates for general
fund purposes.--For the purpose of determining average tax
rates for general fund purposes for local educational
agencies in a State under this paragraph (except under
subparagraph (C)(i)(II)(bb)), the Secretary shall use
either--
``(i) the average tax rate for general fund purposes for
comparable local educational agencies, as determined by the
Secretary in regulations; or
``(ii) the average tax rate of all the local educational
agencies in the State.''].
Sec. 305. (a) Notwithstanding section 321(b)(2)(A) and (3)(A) of the
Department of Education Appropriations Act, 2001, a State educational
agency may determine the percentage of the funds allocated to the agency
under section 321(a)(1)(D) of that Act that the agency shall distribute
in accordance with section 321(b)(2)(A) and (3) of that Act.
(b) Notwithstanding section 321(b)(1)(B) of that Act, if a State
educational agency transfers funds received under section 321(a)(1)(D)
of that Act to the State entity responsible for the financing of
education facilities, the State educational agency shall transfer to the
State entity that share of the administrative funds reserved by the
agency under section 321(b)(1)(A) of that Act that is in proportion to
the percentage of funds that the agency determines under subsection (a)
that it will distribute in accordance with section 321(b)(2) of that
Act. (Department of Education Appropriations Act, 2001, as enacted by
section 1(a)(1) of P.L. 106-554.)