[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)

----------------------------------------------------------------------------
Identification code 91-0900-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0900-2-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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 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.

    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)

----------------------------------------------------------------------------
Identification code 91-1000-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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)

----------------------------------------------------------------------------
Identification code 91-1000-2-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------
    Direct program:
      Obligations by program activity:

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

    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 and 
the McKinney-Vento Homeless Assistance Act.

    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)

----------------------------------------------------------------------------
Identification code 91-0011-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

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

      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)

----------------------------------------------------------------------------
Identification code 91-0101-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0101-2-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

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

    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 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)

----------------------------------------------------------------------------
Identification code 91-1300-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

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

    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.

    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)

----------------------------------------------------------------------------
Identification code 91-0300-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------
    Direct program:
      Obligations by program activity:

        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

    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.

    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)

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

      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)

----------------------------------------------------------------------------
Identification code 91-0400-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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

    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.

    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)

----------------------------------------------------------------------------
Identification code 91-0400-0-1-501      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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)

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

      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)

----------------------------------------------------------------------------
Identification code 91-0241-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-4252-0-3-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0242-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

-----------------------------------------------------------------------------------------------
Identification code   91-0242-0-1-502    1999 actual    2000 actual     2001 est.      2002 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Net value of assets related to 
          pre-1992 direct loans 
          receivable and acquired 
          defaulted guaranteed loans 
          receivable:

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)

----------------------------------------------------------------------------
Identification code 91-4255-0-3-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0200-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-4257-0-3-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0243-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
                                        2000 actual    2001 est.   2002 est.
----------------------------------------------------------------------------
Program Cost:
FFEL:
  Liquidating \1\.......................(1,188,367)    (741,821)   (604,457)
  Program:
    Regular.............................  3,565,824    3,714,477   4,008,183
    Consolidation.......................    196,823      137,635     213,849
    Reestimate of Prior Year Costs......    776,001  (4,727,793)
    Non-Contractual Modifications \2\...                               4,420
                                        -----------  -----------  ----------
      Subtotal, Program.................  4,538,648    (875,681)   4,226,451

[[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)

----------------------------------------------------------------------------
Identification code 91-0243-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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)

----------------------------------------------------------------------------
Identification code 91-0243-4-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-4253-0-3-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0231-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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)

----------------------------------------------------------------------------
Identification code 91-0231-4-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-4251-0-3-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0230-0-1-502      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

-----------------------------------------------------------------------------------------------
Identification code   91-0230-0-1-502    1999 actual    2000 actual     2001 est.      2002 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Net value of assets related to 
          pre-1992 direct loans 
          receivable and acquired 
          defaulted guaranteed loans 
          receivable:

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)

----------------------------------------------------------------------------
Identification code 91-1100-0-1-503      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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

----------------------------------------------------------------------------
Identification code 91-1100-0-1-503      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------
1001  Total compensable workyears: Full-
        time equivalent employment......          12          15           1
---------------------------------------------------------------------------

                                

              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)

----------------------------------------------------------------------------
Identification code 91-1100-2-1-503      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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

----------------------------------------------------------------------------
Identification code 91-1100-2-1-503      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------
1001  Total compensable workyears: Full-
        time equivalent employment......                                  14
---------------------------------------------------------------------------

                                


 
                         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)

----------------------------------------------------------------------------
Identification code 91-0800-0-1-503      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0800-0-1-503      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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)

----------------------------------------------------------------------------
Identification code 91-0700-0-1-751      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-0700-0-1-751      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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)

----------------------------------------------------------------------------
Identification code 91-1400-0-1-751      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

    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)

----------------------------------------------------------------------------
Identification code 91-1400-0-1-751      2000 actual   2001 est.   2002 est.
----------------------------------------------------------------------------

      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.)
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