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

                         THE BUDGET FOR FISCAL YEAR 2003

                             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 (``ESEA'') and section 418A of the Higher Education Act of
    1965, [$12,346,900,000] $13,388,330,000, of which [$4,777,199,000]
    $5,830,129,000 shall become available on July 1, [2002] 2003, and shall
    remain available through September 30, [2003] 2004, and of which
    $7,383,301,000 shall become available on October 1, [2002] 2003, and
    shall remain available through September 30, [2003] 2004, for academic
    year [2002-2003] 2003-2004: Provided, That $235,000,000 shall be
    available for comprehensive school reform grants under part F of the
    ESEA: Provided further, That $15,000,000 of the amount appropriated for
    title I, part B, subpart 1 shall become available October 1, [2001]
    2002, and shall remain available through September 30, [2003] 2004, for
    evaluation and technical assistance: [Provided further, That the funds
    provided for title I, part B, subpart 2 shall become available October
    1, 2001, and shall remain available through September 30, 2003:]
    Provided further, That [$7,172,971,000] $7,175,901,000 shall be
    available for basic grants under section 1124: Provided further, That up
    to $3,500,000 of these funds shall be available to the Secretary of
    Education on October 1, [2001] 2002, to obtain updated educational-
    agency-level census poverty data from the Bureau of the Census: Provided
    further, That $1,365,031,000 shall be available for concentration grants
    under section 1124A: Provided further, That [$1,018,499,000]
    $2,018,499,000 shall be available for targeted grants under section
    1125: Provided further, That $793,499,000 shall be available for
    education finance incentive grants under section 1125A. (Department of
    Education Appropriations Act, 2002; additional authorizing language is
    required.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Grants to local educational
                agencies:
              Local educational agency
                  formulas:
    00.01       Basic grants................       6,957       6,892       7,187
    00.02       Concentration grants........       1,148       1,350       1,351
    00.03       Targeted grants.............                   1,018       2,018
    00.04     Education finance incentive
                grants formula..............                     794         794
            Reading first:
    00.05     Reading first State grants....                     705       1,000
    00.06     Early reading first...........                      75          75
    00.07   Even start......................         234         271         200
    00.08   Literacy through school
              libraries.....................                      12          12
    00.09   State agency programs...........         425         450         444
    00.10   Comprehensive school reform.....         209         237         235
    00.11   Evaluation......................           9           9           9
    00.12   Close up fellowships............                       2
    00.13   Advanced placement..............                      22          22
    00.14   Dropout prevention programs.....                      10
    00.15   Capital expenses................           7
    00.16   Migrant education projects......          30          38          38
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       9,022      11,888      13,388
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          41         163
    22.00 New budget authority (gross)......       9,143      11,725      13,388
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       9,185      11,888      13,388
    23.95 Total new obligations.............      -9,022     -11,888     -13,388
    24.40 Unobligated balance carried
            forward, end of year............         163
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       2,938       4,967       6,005
    55.00   Advance appropriation...........       6,205       6,758       7,383
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       9,143      11,725      13,388
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       3,616       3,972       6,459
    73.10 Total new obligations.............       9,022      11,888      13,388
    73.20 Total outlays (gross).............      -8,650      -9,401     -11,850
    73.40 Adjustments in expired accounts
            (net)...........................         -15
    73.45 Recoveries of prior year
            obligations.....................          -1
    74.40 Obligated balance, end of year....       3,972       6,459       7,997
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................       5,545       6,027       6,579
    86.93 Outlays from discretionary
            balances........................       3,106       3,374       5,271
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       8,650       9,401      11,850
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       9,143      11,725      13,388
    90.00 Outlays...........................       8,650       9,401      11,850
    ---------------------------------------------------------------------------

      Budget Authority and Outlays Excluding Full Funding for Federal Retiree
                           Costs (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       9,140      11,722      13,385
    90.00 Outlays...........................       8,647       9,398      11,847
    ---------------------------------------------------------------------------

                            SUMMARY OF PROGRAM LEVEL

                            (in millions of dollars)

                                         2001-2002
                                          academic
                                            year      2002-2003
                                                    academic year 2003-2004
                                                                academic year
    New Budget Authority................       2,938       4,967       6,005
    Advance appropriation...............       6,758       7,383       7,383
                                        ------------------------------------
          Total program level...........       9,696      12,350      13,388
                                        ====================================
    Change in advance appropriation from
    the previous year...................        +533        +625           0

        Grants to local educational agencies.--Funds are allocated through
    four formulas--Basic Grants, Concentration Grants, Targeted Grants and
    Education Finance Incentive Grants--for local programs that provide
    extra academic support to help raise the achievement of eligible
    students, in high-poverty communities, or, in the case of schoolwide
    programs, help all students in high-poverty schools to meet challenging
    State acedmic standards. States must annually assess participating
    students in at least reading and mathematics, and school districts must
    identify for improvement, and provide assistance to, schools that for
    two consecutive years fail to make adequate yearly progress toward
    helping all groups of students reach the proficient level on the State
    assessments. Disticts must provide students attending such schools the
    choice of attending another public school that is not identified for
    improvement. After three years of failure, students who remain in the
    school would be permitted to use Title I funds to obtain supplemental
    educational services from a public- or private-sector provider. Schools
    that continue to fail to meet State standards would be subject to
    progressively stonger corrective actions and, after six years of
    failure, reconstitution under a restructing plan.

        Reading first State grants.--Funds provide assistance to State and
    local educational agencies in establishing reading

    [[Page 348]]

    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 end of third grade.

        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.

        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.

        Literacy through school libraries.--Funds support competitive grants
    to local educational agencies to provide students with increased access
    to up-to-date school library materials and professional certified
    library media specialists.

        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.

        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.

        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.

        Advanced placement.--Funds support formula grants to States to pay
    test fees for low-income students if they are enrolled in an Advanced
    Placement course and competitive grants to State educational agencies,
    local educational agencies, or national nonprofit educational entities
    for activities, such as teacher training and pre-advanced placement
    course development, designed to expand access for low-income individuals
    to Advanced Placement classes.

        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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    24.0  Printing and reproduction.........                       1           2
    25.1  Advisory and assistance services..          11          26          30
    25.2  Other services....................           8          16          18
    25.3  Other purchases of goods and
            services from Government
            accounts........................           6          13          15
    41.0  Grants, subsidies, and
            contributions...................       8,997      11,832      13,323
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       9,022      11,888      13,388
    ---------------------------------------------------------------------------

                                   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, [$1,143,500,000] $1,140,500,000, of
    which $982,500,000 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), [$48,000,000] $45,000,000 shall be
    for construction under section 8007 and shall remain available through
    September 30, [2003] 2004, $55,000,000 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 $3,000,000 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]. (Department of Education Appropriations Act,
    2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0102-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Payments for federally connected children:

    00.01   Basic support payments..........         882         983         983
    00.02   Supplemental payments for
              children with disabilities....          50          50          50
    00.03   Payments for heavily impacted
              districts.....................           1           5
                                               ---------   ---------  ----------
    00.91   Subtotal, payments for federally
              connected children............         933       1,038       1,033
    01.01 Facilities maintenance............           8           8           8
    02.01 Construction......................          13          22          46
    03.01 Payments for Federal property.....          41          55          55
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................         995       1,123       1,142
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          14          14          35
    22.00 New budget authority (gross)......         993       1,144       1,141
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,009       1,158       1,176
    23.95 Total new obligations.............        -995      -1,123      -1,142
    24.40 Unobligated balance carried
            forward, end of year............          14          35          35
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         993       1,144       1,141
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         266         215         186
    73.10 Total new obligations.............         995       1,123       1,142
    73.20 Total outlays (gross).............      -1,040      -1,152      -1,126
    73.40 Adjustments in expired accounts
            (net)...........................          -4
    73.45 Recoveries of prior year
            obligations.....................          -2
    74.40 Obligated balance, end of year....         215         186         202
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         918         999         999
    86.93 Outlays from discretionary
            balances........................         122         153         127
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,040       1,152       1,126
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         993       1,144       1,141
    90.00 Outlays...........................       1,040       1,152       1,126
    ---------------------------------------------------------------------------

        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, can
    place 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 1.1 million federally connected students enrolled in about
    1,330 local educational agencies to assist them

    [[Page 349]]

    in meeting their operation and maintenance costs. Average per-student
    payments will be approximately $870.

        Payments for Children with Disabilities.--Payments in addition to
    those provided under the Individuals with Disabilities Education Act
    will be provided on behalf of approximately 54,000 federally connected
    students with disabilities in about 830 local educational agencies.
    Average per-student payments will be approximately $920.

        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
    170 local educational agencies with large proportions of federally
    connected students. Payments will be made on behalf of about 140,000
    students who are military dependents or who reside on Indian lands. In
    addition, approximately 25 construction grants will be awarded
    competitively to local educational agencies.

        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, subpart 1 of part A of title VI, and parts B and C of title
    VII of the Elementary and Secondary Education Act of 1965 (``ESEA'');
    [part B of title II of the Higher Education Act;] the McKinney-Vento
    Homeless Assistance Act; and the Civil Rights Act of 1964,
    [$7,827,473,000] $6,784,484,000, of which [$1,717,609,000] $500,000,000
    shall become available October 1, [2001] 2002, and shall remain
    available through September 30, [2003] 2004, of which [$2,801,597,000]
    $3,579,517,000 shall become available on July 1, [2002] 2003, and remain
    available through September 30, [2003] 2004, and of which $1,765,000,000
    shall become available on October 1, [2002] 2003, and shall remain
    available through September 30, [2003] 2004, for academic year [2002-
    2003: Provided, That $75,000,000 for continuing and new grants to
    demonstrate effective approaches to comprehensive school reform shall be
    allocated and expended in the same manner as the funds provided under
    the Fund for the Improvement of Education for this purpose were
    allocated and expended in fiscal year 2001: Provided further, That
    $142,189,000 shall be available to support the activities authorized
    under subpart 4 of part D of title V of the ESEA, of which up to 5
    percent shall become available on October 1, 2001, for evaluation,
    technical assistance, school networking, peer review of applications,
    and program outreach activities and of which not less than 95 percent
    shall become available on July 1, 2002, and remain available through
    September 30, 2003, for grants to local educational agencies: Provided
    further, That funds made available to local educational agencies under
    this subpart shall be used only for activities related to establishing
    smaller learning communities in high schools: Provided further, That of
    the amount made available for subpart 3, part C, of title II of the
    ESEA, $2,000,000 shall be used by the Center for Civic Education to
    implement a comprehensive program to improve public knowledge,
    understanding, and support of the Congress and the state legislatures:
    Provided further, That $269,906,000 of the funds for subpart 1, part D
    of title V of the ESEA shall be available for the projects and in the
    amounts specified in the statement of the managers on the conference
    report accompanying this Act] 2003-2004: Provided, That of the funds
    made available for subpart 2 of part A of title IV of the ESEA,
    $10,000,000, to remain available until expended, shall be for the
    Project School Emergency Response to Violence program to provide
    education-related services to local educational agencies in which the
    learning environment has been disrupted due to a violent or traumatic
    crisis: Provided further, That $387,000,000 shall be for subpart 1 of
    part A of title VI of the ESEA. (Department of Education Appropriations
    Act, 2002.)
        [For emergency expenses to provide education-related services to
    local educational agencies in which the learning environment has been
    disrupted due to a violent or traumatic crisis, for the Project School
    Emergency Response to Violence program, $10,000,000, to remain available
    until expended, and to be obligated from amounts made available in
    Public Law 107-38.] (Emergency Supplemental Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

            Improving teacher quality:
    00.01     Improving teacher quality
                State grants................                   1,700       2,850
    00.02     National activities...........          10          35          15
    00.03     Mathematics and science
                partnerships................                      13          13
    00.04     Troops-to-teachers............                      18          20
    00.05     Transition to teaching........          31          35          39
    00.06     National writing project......                      14
    00.07     Civic education...............                      27
    00.08     Teaching of traditional
                American history............                     100          50
            Educational technology:
    00.09     Educational technology State
                grants......................                     700         700
    00.10     Ready-to-learn television.....                      22          22
    00.11     Preparing tomorrow's teachers
                to use technology...........                      62
    00.12   21st Century community learning
              centers.......................                   1,000       1,000
            School choice and innovation:
    00.13     State grants for innovative
                programs....................         381         388         385
    00.14     Charter schools grants........         190         200         200
    00.15     Credit enhancement for charter
                school facilities...........                                 100
    00.16     Voluntary public school choice                      25          25
    00.17     Magnet schools assistance.....         110         110         110
    00.18     Choice demonstration fund.....                                  50
    00.19   Fund for the Improvement of
              Education.....................          54         833          84
            Safe and drug-free schools and
                communities:
    00.20     State grants..................         437         477         472
    00.21     National programs.............         205         275         172
    00.22   State assessments and enhanced
              assessment instruments........                     387         387
    00.23   Education for homeless children
              and youth.....................          35          50          50
    00.24   Education for Native Hawaiians..          28          30          18
    00.26   Alaska Native education equity..          15          24          14
    00.27   Training and advisory services..           7           7           7
    00.28   Rural education.................                     163
    00.29   Class size reduction............       1,369       1,154
    00.30   School renovation grants........         800         400
    00.31   Eisenhower professional
              development State grants......         439           2
    00.32   Eisenhower professional
              development national
              activities....................          45
    00.33   Close up fellowships............           2
    00.34   Comprehensive regional
              assistance centers............          28
    00.35   Advanced placement..............          22
                                               ---------   ---------  ----------
    01.00 Total direct program..............       4,208       8,251       6,783
    09.01 Reimbursable program..............          60
                                               ---------   ---------  ----------
    10.00 Total new obligations.............       4,268       8,251       6,783
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           6         414
    22.00 New budget authority (gross)......       4,679       7,837       6,784
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       4,686       8,251       6,784
    23.95 Total new obligations.............      -4,268      -8,251      -6,783
    23.98 Unobligated balance expiring or
            withdrawn.......................          -3
    24.40 Unobligated balance carried
            forward, end of year............         414
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       3,107       6,062       5,019
    40.15   Appropriation (emergency).......                      10
    41.00   Transferred to other accounts...          -3
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............       3,104       6,072       5,019
    55.00   Advance appropriation...........       1,515       1,765       1,765
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............          60
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       4,679       7,837       6,784
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       2,380       3,771       7,574
    73.10 Total new obligations.............       4,268       8,251       6,783
    73.20 Total outlays (gross).............      -2,856      -4,449      -6,713
    73.40 Adjustments in expired accounts
            (net)...........................         -20
    73.45 Recoveries of prior year
            obligations.....................          -1

    [[Page 350]]

    74.40 Obligated balance, end of year....       3,771       7,574       7,644
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................       1,214       1,628       1,575
    86.93 Outlays from discretionary
            balances........................       1,642       2,821       5,138
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,856       4,449       6,713
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -60
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       4,619       7,837       6,784
    90.00 Outlays...........................       2,796       4,449       6,713
    ---------------------------------------------------------------------------

                            SUMMARY OF PROGRAM LEVEL

                            (in millions of dollars)

                                         2001-2002
                                          Academic
                                            Year      2002-2003
                                                    Academic Year 2003-2004
                                                                Academic Year
    New Budget Authority................       3,104       6,072       5,019
    Advance Appropriation...............       1,765       1,765       1,765
                                        ------------------------------------
          Total program level...........       4,869       7,837       6,784
                                        ====================================
    Change in advance appropriation over
    previous year.......................        +250

        Improving teacher quality.--
                Improving teacher quality State grants.--Funds support State
            and school district activities to prepare, train, and recruit
            high-quality teachers to improve student achievement.
                National activities.--Funds support competitive grants to
            improve the knowledge and skills of early childhood educators
            who work in communities that have high concentrations of
            children living in poverty.
                Mathematics and science partnerships.--Funds support State
            and local efforts to improve students' academic achievement in
            mathematics and science by promoting strong teaching skills for
            elementary and secondary school teachers, including integrating
            teaching methods based on scientifically-based research and
            technology into the curriculum.
                Troops-to-teachers.--Funds assist eligible members of the
            armed forces to obtain certification as teachers and to become
            highly qualified teachers.
                Transition to teaching.--Funds support competitive grants to
            establish programs to recruit and retain highly qualified mid-
            career professionals and recent college graduates as teachers in
            high-need schools.
                Teaching of traditional American history.--Funds support
            competitive grants to school districts for activities to improve
            history instruction and provide professional development for
            teachers of American history.

        Educational technology.--
                Educational technology State grants.--Funds support formula
            grants to States, which target funds to high-poverty school
            districts, to acquire computers, connections, software, and
            teacher training to enable schools to integrate technology
            effectively into curricula.
                Ready-to-learn television.--Funds support the development,
            distribution and production of educational video for preschool
            children, elementary school children, and their parents to
            facilitate student academic achievement.

        21st Century community learning centers.--
                Funds support formula grants to States, which award
            subgrants to communities to provide academic enrichment
            opportunities and related services to students, primarily
            students who attend high-poverty schools, and their families
            during before-school, after-school, weekend, and summer hours.

        School choice and innovation.--
                State grants for innovative programs.--Funds support formula
            grants to States and local educational agencies to help
            implement innovative strategies for improving student
            achievement.
                Charter schools grants.--Funds support competitive grants to
            State educational agencies and charter schools to support the
            planning, design, initial implementation, and dissemination of
            information regarding charter schools. These schools are created
            by teachers, parents, and members of the community, and are
            exempt from certain local, State, and Federal regulations.
                Credit enhancement for charter school facilities.--Funds
            support competitive grants to State and local governments,
            nonprofit entities, and public and nonprofit consortia, to
            assist charter schools in acquiring, leasing, and renovating
            school facilities.
                Voluntary public school choice.--Funds support competitive
            grants to State educational agencies or local educational
            agencies to implement programs that provide students,
            particularly students who attend low-performing schools, with
            expanded public school choice options.
            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.
            Choice demonstration fund.--Funds support grants to State
        educational agencies, local educational agencies, institutions of
        higher education, governmental agencies, or other public or private
        entities for research projects to measure the effects on student,
        school, and district achievement of providing parents--particularly
        low-income parents--with school choice options.

        Fund for the Improvement of Education (FIE).--Funds support
    nationally significant projects to improve the quality of elementary and
    secondary education to help all children meet challenging State content
    and student achievement standards, including initiatives to improve
    teacher quality. In addition, funds support the distribution of books to
    promote childhood literacy and projects to design and implement
    character education programs.

        Safe and drug-free schools and communities.--
            State Grants.--Funds provide formula grants to States to support
        research-based drug and violence-prevention programs and to
        implement strategies to improve school safety.
            National Programs.--Funds support national activities to prevent
        violence and the illegal use of drugs among, and to promote safety
        and discipline for, students.

        State assessments and enhanced assessments instruments.--Funds
    support formula grants to States to develop and implement the new
    assessments, and related accountability efforts, that States would use
    to test all children annually in grades 3-8 in reading and mathematics.

        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 attend and achieve success in school.

        Education for Native Hawaiians.--Funds provide supplemental
    education services to Native Hawaiians in areas such as 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 areas such

    [[Page 351]]

    as educational planning, curriculum development, teacher training,
    teacher recruitment, student enrichment, and home-based instruction for
    pre-school children. Grants also go to organizations specified in the
    law.

        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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    24.0    Printing and reproduction.......           1           1           2
    25.1    Advisory and assistance services           1          13          16
    25.2    Other services..................          37          56          50
    25.3    Other purchases of goods and
              services from Government
              accounts......................           1           1           1
    25.5    Research and development
              contracts.....................           1           2
    41.0    Grants, subsidies, and
              contributions.................       4,167       8,178       6,714
                                               ---------   ---------  ----------
    99.0      Direct obligations............       4,208       8,251       6,783
    99.0  Reimbursable obligations..........          60
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       4,268       8,251       6,783
    ---------------------------------------------------------------------------

                               Reading Excellence

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0011-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Reading Excellence................         296         201
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         296         201
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          16           6
    22.00 New budget authority (gross)......         286         195
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         302         201
    23.95 Total new obligations.............        -296        -201
    24.40 Unobligated balance carried
            forward, end of year............           6
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          91
    55.00   Advance appropriation...........         195         195
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         286         195
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         282         449         377
    73.10 Total new obligations.............         296         201
    73.20 Total outlays (gross).............        -128        -273        -266
    73.40 Adjustments in expired accounts
            (net)...........................          -1
    74.40 Obligated balance, end of year....         449         377         111
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           9          21
    86.93 Outlays from discretionary
            balances........................         118         251         266
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         128         273         266
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         286         195
    90.00 Outlays...........................         128         273         266
    ---------------------------------------------------------------------------

        Reading Excellence.--This program has been replaced by the Reading
    First program in the Education for the Disadvantaged account. Amounts in
    these schedules reflect balances that are spending out from prior-year
    appropriations.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0011-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    24.0  Printing and reproduction.........           1
    25.1  Advisory and assistance services..           2
    25.2  Other services....................           3
    25.3  Other purchases of goods and
            services from Government
            accounts........................           3
    41.0  Grants, subsidies, and
            contributions...................         287         201
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         296         201
    ---------------------------------------------------------------------------

                                Education Reform

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 21st Century community learning
            centers.........................         846
    01.01 Small learning communities........          22         103
          Educational technology:

    02.01   Technology literacy challenge
              fund..........................         450
    02.02   Technology innovation challenge
              grants........................         136
    02.03   Regional technology in education
              consortia.....................          10
          National activities:

    02.04   Teacher training in technology..         125
    02.05   Community-based technology......          65
    02.06   Technology leadership activities           2
    02.07 Star schools......................          59
    02.08 Ready to learn television.........          16
    02.09 Telecommunications demonstration
            project for mathematics.........           9
                                               ---------   ---------  ----------
    02.91   Total, Education technology.....         872
          Goals 2000:

    03.01   State and local education
              systemic improvement..........           8
    03.02   Parental assistance.............          38
                                               ---------   ---------  ----------
    03.91   Total, Goals 2000...............          46
    04.01 School-to-work opportunities......          30
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,816         103
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          63         103
    22.00 New budget authority (gross)......       1,881
    22.21 Unobligated balance transferred to
            other accounts..................         -26
    22.22 Unobligated balance transferred
            from other accounts.............           2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,920         103
    23.95 Total new obligations.............      -1,816        -103
    23.98 Unobligated balance expiring or
            withdrawn.......................          -1
    24.40 Unobligated balance carried
            forward, end of year............         103
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       1,881
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       2,392       2,464         774
    73.10 Total new obligations.............       1,816         103
    73.20 Total outlays (gross).............      -1,738      -1,793        -651
    73.40 Adjustments in expired accounts
            (net)...........................          -6
    74.40 Obligated balance, end of year....       2,464         774         123
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................       1,577
    86.93 Outlays from discretionary
            balances........................         161       1,793         651
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,738       1,793         651
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,881
    90.00 Outlays...........................       1,738       1,793         651
    ---------------------------------------------------------------------------

        Programs in this account have been transferred to the School
    Improvement account or discontinued. Amounts in these schedules reflect
    balances that are spending out from prior-year appropriations.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           7
    25.2  Other services....................           8
    25.3  Other purchases of goods and
            services from Government
            accounts........................           1
    25.5  Research and development contracts           8
    41.0  Grants, subsidies, and
            contributions...................       1,792         103
                                               ---------   ---------  ----------

    [[Page 352]]

    99.9    Total new obligations...........       1,816         103
    ---------------------------------------------------------------------------

                          Chicago Litigation Settlement

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0220-0-1-501      2001 actual   2002 est.   2003 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..........           1           1
    23.95 Total new obligations.............          -1          -1
    24.40 Unobligated balance carried
            forward, end of year............           1
    ----------------------------------------------------------------------------

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

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

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

                                Indian Education

        For expenses necessary to carry out, to the extent not otherwise
    provided, title VII, part A of the Elementary and Secondary Education
    Act of 1965, [$120,368,000] $122,368,000. (Department of Education
    Appropriations Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to local educational
            agencies........................          93          97          97
    00.02 Special programs for Indian
            children........................          20          20          20
    00.03 National activities...............           3           3           5
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         116         120         122
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         116         120         122
    23.95 Total new obligations.............        -116        -120        -122
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         116         120         122
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          95         132         139
    73.10 Total new obligations.............         116         120         122
    73.20 Total outlays (gross).............         -78        -113        -119
    73.40 Adjustments in expired accounts
            (net)...........................          -2
    74.40 Obligated balance, end of year....         132         139         143
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           2           6           6
    86.93 Outlays from discretionary
            balances........................          76         107         112
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          78         113         119
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         116         120         122
    90.00 Outlays...........................          78         113         119
    ---------------------------------------------------------------------------

        The Indian Education program supports the efforts of local
    educational agencies and tribal schools to improve teaching and learning
    for the Nation's American Indian and Alaska Native Children.

        Grants to local educational agencies.--Formula grants support local
    educational agencies in their efforts to reform elementary and secondary
    school programs that serve Indian students, with the goal of ensuring
    that such programs assist participating students in meeting the same
    academic standards as all other students. In 2001, the Department made
    1,212 formula grants to local educational agencies and tribal schools
    serving more than 462,000 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 91-0101-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           2           3           5
    41.0  Grants, subsidies, and
            contributions...................         114         117         117
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         116         120         122
    ---------------------------------------------------------------------------

                     OFFICE OF ENGLISH LANGUAGE ACQUISITION

                                  Federal Funds

    General and special funds:

                       [Bilingual and Immigrant Education]

                          English Language Acquisition

        For carrying out title III, part A of the ESEA, $665,000,000, of
    which [$415,000,000] $469,000,000 shall become available on July 1,
    [2002] 2003, and shall remain available through September 30, [2003]
    2004. (Department of Education Appropriations Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Language acquisition State grants.                     456         510
    00.02 Bilingual education instructional
            services........................         179         121          91
    00.03 Bilingual education support
            services........................          16
    00.04 Bilingual education professional
            development.....................          99          88          64
    00.05 Immigrant education...............         150
    00.06 Foreign language assistance.......          14
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         458         665         665
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         460         665         665
    23.95 Total new obligations.............        -458        -665        -665
    23.98 Unobligated balance expiring or
            withdrawn.......................          -2
    ----------------------------------------------------------------------------

    [[Page 353]]

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         460         665         665
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         566         603         789
    73.10 Total new obligations.............         458         665         665
    73.20 Total outlays (gross).............        -410        -479        -600
    73.40 Adjustments in expired accounts
            (net)...........................         -11
    74.40 Obligated balance, end of year....         603         789         854
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          17          33          33
    86.93 Outlays from discretionary
            balances........................         393         446         567
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         410         479         600
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         460         665         665
    90.00 Outlays...........................         410         479         600
    ---------------------------------------------------------------------------

        Language acquisition State grants.--Funds provide formula grants to
    States and discretionary National Activities grants to improve services
    for limited English proficient and immigrant students. States are
    accountable for demonstrating that limited English proficient students
    are learning English and meeting the same high State standards as all
    other students. Under National Activities, the statute authorizes
    competitive professional development grants and a clearinghouse.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           3           3           3
    25.5  Research and development contracts           4
    41.0  Grants, subsidies, and
            contributions...................         451         662         662
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         458         665         665
    ---------------------------------------------------------------------------

             OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

                                  Federal Funds

    General and special funds:

                                Special Education

        For carrying out the Individuals with Disabilities Education Act,
    [$8,672,804,000] $9,687,804,000, of which [$3,315,233,000]
    $4,335,233,000 shall become available for obligation on July 1, [2002]
    2003, and shall remain available through September 30, [2003] 2004, and
    of which $5,072,000,000 shall become available on October 1, [2002]
    2003, and shall remain available through September 30, [2003] 2004, for
    academic year [2002-2003] 2003-2004: 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] the amount for
    section 611(c) of the Act shall be equal to the amount available for
    that section [under Public Law 106-554] in the Department of Education
    Appropriations Act, 2002, increased by the amount of inflation as
    specified in section 611(f)(1)(B)(ii) of the Act[: Provided further,
    That $8,380,000 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].
    (Department of Education Appropriations Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

            State grants:
    00.01     Grants to States..............       5,101       7,547       8,529
    00.02     Preschool grants..............         414         390         390
    00.03     Grants for infants and
                families....................         425         472         437
                                               ---------   ---------  ----------
    00.91       Subtotal, State grants......       5,940       8,409       9,356
            National activities:
    01.01     State improvement.............          35          95          52
    01.02     Research and innovation.......          78          78          78
    01.03     Technical assistance and
                dissemination...............          53          53          53
    01.04     Personnel preparation.........          82          90          90
    01.05     Parent information centers....          26          26          26
    01.06     Technology and media services.          39          38          33
                                               ---------   ---------  ----------
    01.91       Subtotal, National
                  activities................         313         380         332
                                               ---------   ---------  ----------
    02.00 Total Direct Program..............       6,253       8,789       9,688
                                               ---------   ---------  ----------
    10.00 Total new obligations.............       6,253       8,789       9,688
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         259         116
    22.00 New budget authority (gross)......       6,110       8,673       9,688
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       6,369       8,789       9,688
    23.95 Total new obligations.............      -6,253      -8,789      -9,688
    24.40 Unobligated balance carried
            forward, end of year............         116
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       2,368       3,601       4,616
    55.00   Advance appropriation...........       3,742       5,072       5,072
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       6,110       8,673       9,688
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       4,044       4,469       6,334
    73.10 Total new obligations.............       6,253       8,789       9,688
    73.20 Total outlays (gross).............      -5,809      -6,924      -8,192
    73.40 Adjustments in expired accounts
            (net)...........................         -20
    74.40 Obligated balance, end of year....       4,469       6,334       7,830
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................       2,314       3,470       3,491
    86.93 Outlays from discretionary
            balances........................       3,495       3,454       4,701
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       5,809       6,924       8,192
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       6,110       8,673       9,688
    90.00 Outlays...........................       5,809       6,924       8,192
    ---------------------------------------------------------------------------

                            SUMMARY OF PROGRAM LEVEL

                            [In millions of dollars]

                                         2001-2002
                                          academic
                                            year      2002-2003
                                                    academic year 2003-2004
                                                                academic year
    Current Budget Authority............       2,368       3,601       4,616
    Advance appropriation...............       5,072       5,072       5,072
                                        ------------------------------------
        Total program level.............       7,440       8,673       9,688
                                        ====================================
    Change in advance appropriation from
    the previous year...................      +1,330           0           0

        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.

    [[Page 354]]

            The goal of this program is to help States provide a
        comprehensive system of early intervention services that will
        enhance child and family 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:

                                             2001 actual   2002 est.   2003 est.
    Number of children served in first
        quarter of fiscal year:
      Ages 3 through 21.....................       6,381       6,470       6,548
      Ages 3 through 5......................         599         611         623
      Birth through 2.......................         231         242         255

                                        1997-1998 ac1998-1999 actual  1999-2000
                                                                          actual
        Educational Environment
    Percent of children ages 6 through 21
        provided special education in:
      Regular classrooms....................        46.5        47.4        47.3
      Resource rooms........................        29.1        28.4        28.3
      Separate classes......................        20.4        20.1        20.3
      Separate schools......................         2.8         2.9         2.9
      Residential facilities................          .7          .7          .7
      Home or hospital......................          .5          .5          .5
        Status of Exiting Students
    Percent of students with disabilities
        aged 14-21 leaving school:
      Graduated with a diploma..............        55.4        57.4        56.2
      Graduated through certification.......        11.2        11.2        11.4
      Dropped out of school.................        31.0        28.9        29.4
      Reached maximum age and other.........         2.4         2.5         3.0

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          21          21          21
    41.0  Grants, subsidies, and
            contributions...................       6,232       8,768       9,667
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       6,253       8,789       9,688
    ---------------------------------------------------------------------------

                 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, [$2,945,813,000] $3,001,840,000,
    of which [$56,552,000] $45,218,000 shall remain available through
    September 30, [2003: Provided] 2004, of which $30,000,000 shall be used
    to make awards to State Vocational Rehabilitation agencies based on
    their performance under the Vocational Rehabilitation State Grants
    program as determined by the Secretary: Provided, That funds available
    under the Vocational Rehabilitation State Grants program may be used by
    State Vocational Rehabilitation agencies to pay for the fiscal year 2003
    continuation costs of projects funded in fiscal year 2002 under title
    VI, Part A of the Rehabilitation Act: Provided further, 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 in the case of a State that was in the
    third year of a 3-year extension grant made pursuant to section 101(f)
    of the Assistive Technology Act of 1998 for fiscal year 2001, the
    Secretary of Education shall award under such section an additional 1-
    year extension of the grant to such State for fiscal year 2002 in an
    amount equal to the amount the State received under such section for
    fiscal year 2001:] Provided further, That each State shall be provided
    $50,000 for activities under section 102 of the AT Act: Provided
    further, That [$36,552,000] $15,218,000 shall be used to support grants
    for up to 3 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 $3,746,000 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]. (Department of
    Education Appropriations Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-0-1-506      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.01   Vocational rehabilitation State
              grants........................       2,400       2,481       2,616
    00.02   Vocational rehabilitation
              incentive grants..............                                  30
    00.03   Client assistance State grants..          12          12          12
    00.04   Training........................          40          40          43
    00.05   Demonstration and training
              programs......................          21          21          17
    00.06   Migrant and seasonal farmworkers           2           2
    00.07   Recreational programs...........           2           3
    00.08   Protection and advocacy of
              individual rights.............          14          15          15
    00.09   Projects with industry..........          22          22
    00.10   Supported employment State
              grants........................          38          38
    00.11   Independent living..............         100         110         117
    00.12   Program improvement.............           2           1           1
    00.13   Evaluation......................           2           1           1
    00.14   Helen Keller National Center....           9           9           9
    00.15   National Institute on Disability
              and Rehabilitation Research...         100         110         110
    00.16   Assistive technology............          40          61          31
    00.17   Access to Telework Fund.........                      10          10
                                               ---------   ---------  ----------
    01.00   Total direct program............       2,804       2,936       3,012
    09.01 Reimbursable program..............           7           7           7
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       2,811       2,943       3,019
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........                                  10
    22.00 New budget authority (gross)......       2,812       2,953       3,009
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,812       2,953       3,019
    23.95 Total new obligations.............      -2,811      -2,943      -3,019
    23.98 Unobligated balance expiring or
            withdrawn.......................          -2
    24.40 Unobligated balance carried
            forward, end of year............                      10
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         405         464         469
          Mandatory:

    60.00   Appropriation...................       2,400       2,482       2,533
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           7           7           7
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       2,812       2,953       3,009
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         977       1,043         951
    73.10 Total new obligations.............       2,811       2,943       3,019
    73.20 Total outlays (gross).............      -2,736      -3,035      -2,989
    73.40 Adjustments in expired accounts
            (net)...........................          -9
    74.40 Obligated balance, end of year....       1,043         951         981
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          70         330         333
    86.93 Outlays from discretionary
            balances........................         277         447         140
    86.97 Outlays from new mandatory
            authority.......................       1,892       1,737       1,773
    86.98 Outlays from mandatory balances...         497         521         742
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,736       3,035       2,989
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -3          -3          -3
    88.40     Non-Federal sources...........          -4          -4          -4
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -7          -7          -7
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       2,805       2,946       3,002
    90.00 Outlays...........................       2,730       3,028       2,982
    ---------------------------------------------------------------------------

        Vocational rehabilitation State grants.--The basic State grants
    program provides Federal matching funds to State vocational
    rehabilitation (VR) agencies to assist individuals with

    [[Page 355]]

    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 2003.

        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
    1999 (370,742) and 2000 (376,510).

                       CONSUMER OUTCOMES (CASES CLOSED)

                                              1999 actual     2000 actual
    Individuals achieving employment
     outcomes...............................       231,714         236,210
     Percent with significant disabilities..         84.9%           87.1%
    Employment outcomes as a percent all of
     individuals receiving services.........         62.5%           62.7%

        The 2003 budget request reflects a multi-year Administration effort
    to reform job training programs, target resources to programs with
    documented effectiveness, and eliminate funding for duplicative and
    overlapping programs. Consistent with this crosscutting reform, the
    budget consolidates funding for three programs in this account
    (Supported Employment State Grants, Projects with Industry, and the
    Migrant and Seasonal Farmworkers program) within the Vocational
    Rehabilitation State Grants program.

        Vocational rehabilitation incentive grants.--Under this new program,
    incentive grants would be used to encourage State VR agencies to improve
    their performance in helping individuals with disabilities obtain
    competitive employment. Grants would be awarded to State VR agencies
    based on program performance.

        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.

        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.

        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.

        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.

        Evaluation.--Studies are conducted to evaluate the impact and
    effectiveness of various programs authorized under the Rehabilitation
    Act.

        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.--Federal matching funds are 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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           5           5           5
    25.2    Other services..................           2           2           2
    25.5    Research and development
              contracts.....................           2           5           5
    41.0    Grants, subsidies, and
              contributions.................       2,795       2,924       3,000
                                               ---------   ---------  ----------
    99.0      Direct obligations............       2,804       2,936       3,012
    99.0  Reimbursable obligations..........           7           7           7
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       2,811       2,943       3,019
    ---------------------------------------------------------------------------

               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.), $14,000,000. (Department of Education Appropriations Act,
    2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0600-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total new obligations (object
            class 41.0).....................          12          14          14
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          12          14          14
    23.95 Total new obligations.............         -12         -14         -14
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          12          14          14
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           4           5           1
    73.10 Total new obligations.............          12          14          14
    73.20 Total outlays (gross).............         -11         -19         -14
    74.40 Obligated balance, end of year....           5           1           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           7          13          13
    86.93 Outlays from discretionary
            balances........................           3           5           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          11          19          14
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          12          14          14
    90.00 Outlays...........................          11          19          14
    ---------------------------------------------------------------------------

    [[Page 356]]

        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 2001, the portion of the Federal appropriation
    allocated to educational materials represented approximately 50.6
    percent of the Printing House's total sales. The full appropriation
    represented approximately 43.2 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.),
    [$55,376,000] $52,014,000, of which [$5,376,000] $1,600,000 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], and of which not less than $1,000,000 shall be used for the
    endowment program as authorized under section 207: Provided, That such
    $1,000,000 is available until expended. (Department of Education
    Appropriations Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0601-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operations........................          48          50          49
    00.02 Construction......................           5           5           2
    00.03 Endowment.........................                                   1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................          53          55          52
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          53          55          52
    23.95 Total new obligations.............         -53         -55         -52
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          53          55          52
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           5                       8
    73.10 Total new obligations.............          53          55          52
    73.20 Total outlays (gross).............         -58         -48         -51
    74.40 Obligated balance, end of year....                       8           9
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          53          48          46
    86.93 Outlays from discretionary
            balances........................           5                       4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          58          48          51
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          53          55          52
    90.00 Outlays...........................          58          48          51
    ---------------------------------------------------------------------------

        This residential program provides postsecondary technical and
    professional education for people who are deaf to prepare them for
    employment, provides training, and conducts applied research into
    employment related aspects of deafness. In 2001, Federal appropriations
    represented 81 percent of the Institute's operating budget. The request
    includes funds for the Endowment Grant program. The request also
    includes funds for a construction project to improve roadways, walkways,
    and parking lots associated with NTID buildings.

                              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.), [$96,938,000: Provided, That from the total amount
    available, the University may at its discretion use funds] $94,446,000,
    of which not less than $1,000,000 shall be used for the endowment
    program as authorized under section 207: Provided, That such $1,000,000
    is available until expended. (Department of Education Appropriations
    Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0602-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operations........................          89          97          93
    00.02 Endowment.........................                                   1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................          89          97          94
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          89          97          94
    23.95 Total new obligations.............         -89         -97         -94
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          89          97          94
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           8                       6
    73.10 Total new obligations.............          89          97          94
    73.20 Total outlays (gross).............         -97         -91         -95
    74.40 Obligated balance, end of year....                       6           6
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          89          91          88
    86.93 Outlays from discretionary
            balances........................           8                       6
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          97          91          95
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          89          97          94
    90.00 Outlays...........................          97          91          95
    ---------------------------------------------------------------------------

        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 2001, the Federal appropriation represented 62.4 percent of the
    University's total operating budget, which also includes Federal
    financial aid, vocational rehabilitation, Endowment Grant income, and
    competitive grants and contracts, and 98.1 percent of the operating
    budgets of the related elementary and secondary schools. The request
    also includes funds for the Endowment Grant program.

                    OFFICE OF VOCATIONAL AND ADULT EDUCATION

                                  Federal Funds

    General and special funds:

                         Vocational and Adult Education

        For carrying out, to the extent not otherwise provided, the Carl D.
    Perkins Vocational and Applied Technology Education Act, and 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,
    $1,934,060,000,] $1,897,617,000 of which [$1,136,560,000]

    [[Page 357]]

    $1,100,117,000 shall become available on July 1, [2002] 2003 and shall
    remain available through September 30, [2003] 2004 and of which
    $791,000,000 shall become available on October 1, [2002] 2003 and shall
    remain available through September 30, [2003] 2004: Provided, [That of
    the amounts made available for the Carl D. Perkins Vocational and
    Applied Technology Education Act, $6,500,000 shall be for tribally
    controlled postsecondary vocational and technical institutions under
    section 117: Provided further, That notwithstanding any other provision
    of law or any regulation, the Secretary of Education shall not require
    the use of a restricted indirect cost rate for grants issued pursuant to
    section 117 of the Carl D. Perkins Vocational and Applied Technology
    Education Act: Provided further, That $9,500,000 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 Applied Technology
    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,
    $9,500,000 shall be for national leadership activities under section 243
    and [$6,560,000] $6,617,000 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] 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, 2002; additional authorizing language required.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Vocational education:

            Annual appropriations:
              Vocational education:
    00.01       State grants................       1,128       1,178       1,180
    00.02       National programs...........          15          19          12
    00.03       Occupational and employment
                  information...............           9           2           9
    00.04       Tribally controlled
                  postsecondary vocational
                  institutions..............           6           7           7
    00.05       Tech-prep education.........         110         108         108
    00.06     Tech-prep demonstration.......                       5
                                               ---------   ---------  ----------
    00.91       Total, Vocational education.       1,268       1,319       1,316
              Adult education:
    01.01       State grants................         538         573         575
    01.02       National Institute for
                  Literacy..................           7           7           7
    01.03       National leadership
                  activities................          14          14          10
                                               ---------   ---------  ----------
    01.91       Total, adult education......         559         594         592
    02.01     State grants for incarcerated
                youth offenders.............          14          17           3
    03.01     Literacy programs for
                prisoners...................           5           5           5
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,846       1,935       1,915
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          86          65          64
    22.00 New budget authority (gross)......       1,826       1,934       1,898
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,912       1,999       1,962
    23.95 Total new obligations.............      -1,846      -1,935      -1,915
    23.98 Unobligated balance expiring or
            withdrawn.......................          -2
    24.40 Unobligated balance carried
            forward, end of year............          65          64          47
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       1,035       1,143       1,107
    55.00   Advance appropriation...........         791         791         791
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,826       1,934       1,898
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       1,334       1,496       1,604
    73.10 Total new obligations.............       1,846       1,935       1,915
    73.20 Total outlays (gross).............      -1,679      -1,827      -1,883
    73.40 Adjustments in expired accounts
            (net)...........................          -6
    74.40 Obligated balance, end of year....       1,496       1,604       1,635
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         622         651         649
    86.93 Outlays from discretionary
            balances........................       1,057       1,175       1,234
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,679       1,827       1,883
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,826       1,934       1,898
    90.00 Outlays...........................       1,679       1,827       1,883
    ---------------------------------------------------------------------------

        Program levels for activities in this account are as follows:

                            (in millions of dollars)

                                         2001-2002
                                          academic
                                            year      2002-2003
                                                    academic year 2003-2004
                                                                academic year
    1. Vocational education:
      a. Basic grants:
        Annual appropriation............         309         389         389
        Advance appropriation...........         791         791         791
                                        ------------------------------------
          Subtotal, basic grants........       1,100       1,180       1,180
      b. National programs..............          18          12          12
      c. Occupational & employment
        information.....................           9          10           0
      d. Tribally controlled
        postsecondary vocational
        institutions....................           6           6           6
      e. Tech-prep education............         106         108         108
      f. Tech-prep demonstration........           5           5           0
          Total, vocational education...       1,243       1,321       1,306
    2. Adult education:
      a. State grants...................         540         575         575
      b. National Institute for Literacy           6           7           7
      c. National leadership activities.          14          10          10
                                        ------------------------------------
          Total, adult education........         560         591         591
    3. State grants for incarcerated
    youth offenders.....................          17          17           0
    4. Literacy programs for prisoners..           5           5           0
                                        ------------------------------------
          Total.........................       1,826       1,934       1,898
                                        ====================================

                            SUMMARY OF PROGRAM LEVEL

                            (in millions of dollars)

                                         2001-2002
                                          academic
                                            year      2002-2003
                                                    academic year 2003-2004
                                                                academic year
    New Budget Authority................       1,035       1,143       1,107
    Advance appropriation...............         791         791         791
                                        ------------------------------------
        Total program level.............
                                        ====================================
    Change in advance appropriation from
    the previous year...................        +791

        Vocational education.--
            Basic grants.--Formula grants provide funds to States and
        localities to expand and improve their programs of vocational
        education and promote equal opportunity in vocational education
        programs for historically underserved populations.
            National programs.--Funds support discretionary 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 improve

    [[Page 358]]

        ment of tribally controlled postsecondary vocational institutions,
        to ensure continued and expanded educational opportunities for
        Indian students.
            Tech-prep education.--Formula grants to States support planning
        and demonstration grants to consortia of local educational agencies
        and postsecondary institutions to develop and operate model 4-year
        programs. Programs begin in high school and provide students with
        the mathematical, scientific, communications, and technological
        skills needed to earn a 2-year associate degree or a 2-year
        certificate in a specific occupational field.

        Adult education.--
            State programs.--Formula grants are made to States to help
        eliminate functional illiteracy among the Nation's adults, to assist
        adults in obtaining a high school diploma or its equivalent, and to
        promote family literacy. 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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      2001 actual   2002 est.   2003 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           3           3           3
    25.2    Other services..................           2           2           2
    25.3    Other purchases of goods and
              services from Government
              accounts......................          10           9           9
    25.5    Research and development
              contracts.....................          16          16          16
    41.0    Grants, subsidies, and
              contributions.................       1,812       1,902       1,881
                                               ---------   ---------  ----------
    99.0      Direct obligations............       1,844       1,934       1,912
    99.5  Below reporting threshold.........           2           1           3
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,846       1,935       1,915
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          18          19          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, title VIII of the Higher Education Amendments of 1998] (``HEA''),
    and the Mutual Educational and Cultural Exchange Act of 1961,
    [$2,031,048,000] $1,883,053,000, of which [$5,000,000] $3,000,000 for
    interest subsidies authorized by section 121 of the [Higher Education
    Act of 1965] HEA, shall remain available until expended: Provided, That
    $10,000,000, to remain available through September 30, [2003] 2004,
    shall be available to fund fellowships for academic year [2003-2004]
    2004-2005 under part A, subpart 1 of title VII of said Act, under the
    terms and conditions of part A, subpart 1: Provided further, That
    $1,000,000 is for data collection and evaluation activities for programs
    under the [Higher Education Act of 1965] HEA, including such activities
    needed to comply with the Government Performance and Results Act of
    1993: [Provided further, That $17,500,000 shall be available for
    tribally controlled colleges and universities under section 316 of the
    Higher Education Act of 1965:] Provided further, That notwithstanding
    any other provision of law, funds made available in this Act to carry
    out title VI of the [Higher Education Act of 1965, as amended,] HEA and
    section 102(b)(6) of the Mutual Educational and Cultural Exchange Act of
    1961 may be used to support visits and study in foreign countries by
    individuals who are participating in advanced foreign language training
    and international studies in areas that are vital to United States
    national security and who plan to apply their language skills and
    knowledge of these countries in the fields of government, the
    professions, or international development: Provided further, That up to
    one percent of the funds referred to in the preceding proviso may be
    used for program evaluation, national outreach, and information
    dissemination activities: [Provided further, That $149,722,000 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 HEA
    shall be allocated notwithstanding section 210 of said Act: Provided
    further, That the funds provided for part B of title VII of the HEA may
    be used, at the discretion of the Secretary of Education, to fund
    continuation awards under title VII, part D of said Act. (Department of
    Education Appropriations Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Aid for institutional development:

    00.01   Strengthening institutions......          73          74          76
    00.02   Strengthening tribally
              controlled colleges and
              universities..................          15          18          18
    00.03   Strengthening Alaska Native and
              Native Hawaiian-serving
              institutions..................           6           6           7
    00.04   Strengthening historically black
              colleges and universities.....         185         206         213
    00.05   Strengthening historically black
              graduate institutions.........          45          49          51
    00.06   Minority science and engineering
              improvement...................           9           8           8
                                               ---------   ---------  ----------
    00.91     Subtotal, aid for
                institutional development...         333         361         373
          Other aid for institutions:

    01.01   Developing Hispanic-serving
              institutions..................          69          86          89
    01.02   International education and
              foreign language studies......          78          98         103
    01.03   Fund for the Improvement of
              Postsecondary Education.......         151         181          39
    01.04   Demonstration projects to ensure
              quality higher education for
              students with disabilities....           6           7
    01.05   Interest subsidy grants.........          13           9           3
                                               ---------   ---------  ----------
    01.91     Subtotal, other aid for
                institutions................         317         381         234
          Assistance for students:

    02.01   Federal TRIO programs...........         730         803         803
    02.02   Gaining early awareness and
              readiness for undergraduate
              programs (GEAR UP)............         295         285         285
    02.03   Byrd honors scholarships........          41          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 opportunity
              program.......................           4           4
    02.07   B. J. Stupak Olympic
              scholarships..................           1           1
    02.08   Child care access means parents
              in school.....................          16          25          15
    02.09   Learning anytime anywhere
              partnerships..................          30
                                               ---------   ---------  ----------
    02.91     Subtotal, assistance for
                students....................       1,158       1,200       1,185
          Other Aid:

    03.01   Teacher quality enhancement.....          98          90          90
    03.02   GPRA data/HEA program evaluation           3           1           1
    03.03   Underground railroad program....           2           2
                                               ---------   ---------  ----------
    03.91     Subtotal, Other Aid...........         103          93          91
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,911       2,035       1,883
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          22          14          10

    [[Page 359]]

    22.00 New budget authority (gross)......       1,912       2,031       1,883
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,934       2,045       1,893
    23.95 Total new obligations.............      -1,911      -2,035      -1,883
    23.98 Unobligated balance expiring or
            withdrawn.......................          -9
    24.40 Unobligated balance carried
            forward, end of year............          14          10          10
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       1,912       2,031       1,883
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       1,963       2,396       2,565
    73.10 Total new obligations.............       1,911       2,035       1,883
    73.20 Total outlays (gross).............      -1,463      -1,866      -1,953
    73.40 Adjustments in expired accounts
            (net)...........................         -15
    74.40 Obligated balance, end of year....       2,396       2,565       2,495
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          89         106          97
    86.93 Outlays from discretionary
            balances........................       1,373       1,760       1,856
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,463       1,866       1,953
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,912       2,031       1,883
    90.00 Outlays...........................       1,462       1,866       1,953
    ---------------------------------------------------------------------------
                                                 B------

        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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           4           4           4
    25.2    Other services..................           6           6           5
    25.3    Other purchases of goods and
              services from Government
              accounts......................           2           2           2
    41.0    Grants, subsidies, and
              contributions.................       1,898       2,023       1,872
                                               ---------   ---------  ----------
    99.0      Direct obligations............       1,910       2,035       1,883
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,911       2,035       1,883
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......           1
    ---------------------------------------------------------------------------

                                Howard University

        For partial support of Howard University (20 U.S.C. 121 et seq.),
    $237,474,000, 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, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0603-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 General support...................         199         211         207

    [[Page 360]]

    00.02 Howard University Hospital........          30          30          30
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................         229         241         237
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........                       4
    22.00 New budget authority (gross)......         232         237         237
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         232         241         237
    23.95 Total new obligations.............        -229        -241        -237
    24.40 Unobligated balance carried
            forward, end of year............           4
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         232         237         237
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          14                      14
    73.10 Total new obligations.............         229         241         237
    73.20 Total outlays (gross).............        -243        -227        -237
    74.40 Obligated balance, end of year....                      14          14
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         229         223         223
    86.93 Outlays from discretionary
            balances........................          14           4          14
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         243         227         237
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         232         237         237
    90.00 Outlays...........................         243         227         237
    ---------------------------------------------------------------------------

        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 2001, direct Federal appropriations for general
    support represented approximately 58 percent of the university's
    revenue.

              College Housing and Academic Facilities Loans Program

        For Federal administrative expenses authorized under section 121 of
    the Higher Education Act of 1965, [$762,000] $787,000 to carry out
    activities related to existing facility loans entered into under the
    Higher Education Act of 1965. (Department of Education Appropriations
    Act, 2002; additional authorizing legislation required.)

      Historically Black College and University Capital Financing Program
                                     Account

        The [total amount of] aggregate principal amount of outstanding
    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] $211,000. (Department of Education Appropriations Act, 2002;
    additional authorizing legislation required.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Federal administration............                       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
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           1
    73.10 Total new obligations.............           1           1           1
    73.20 Total outlays (gross).............          -1          -1          -1
    ----------------------------------------------------------------------------

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

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

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

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Direct loan downward reestimate subsidy budget
                    authority:
    137001Downward reestimates subsidy
            budget authority................          -2
                                               ---------   ---------  ----------
    137901Total downward reestimate budget
            authority.......................          -2
        Direct loan downward reestimate subsidy
                    outlays:
    138001Downward reestimates subsidy
            outlays.........................          -2
                                               ---------   ---------  ----------
    138901Total downward reestimate subsidy
            outlays.........................          -2
    ----------------------------------------------------------------------------

        Administrative expense data:
    351001Budget authority..................           1           1           1
    358001Outlays from balances.............           1
    359001Outlays 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 2003 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.

        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 loans 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. No subsidy appropriations are required. The
    2003 budget provides funds for continuing Federal administrative
    activities only.

    [[Page 361]]

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      2001 actual   2002 est.   2003 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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Interest paid to Treasury.........           1           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...........           3           1           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...           4           2           2
    22.60 Portion applied to repay debt.....          -1          -1          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           3           1           1
    23.95 Total new obligations.............          -3          -1          -1
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

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

        Change in obligated balances:
    73.10 Total new obligations.............           3           1           1
    73.20 Total financing disbursements
            (gross).........................          -3          -1          -1
    87.00 Total financing disbursements
            (gross).........................           3           1           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...........           1          -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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          26          25          25
    1251  Repayments: Repayments and
            prepayments.....................          -1                      -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          25          25          24
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4252-0-3-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..          26             25            25             24
    1405    Allowance for subsidy cost (-)..          -2             -2            -2             -2
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          24             23            23             22
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          24             23            23             22
        LIABILITIES:
    2103  Federal liabilities: Debt.........          24             23            23             22
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          24             23            23             22
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          24             23            23             22
    -----------------------------------------------------------------------------------------------

        College Housing and Academic Facilities Loans Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Interest paid to Treasury.........          16          15          14
    00.02 Loan Servicing....................           1
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          17          15          14
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          73           2
    22.00 New budget authority (gross)......          57          53          46
    22.60 Portion applied to repay debt.....        -111         -40         -32
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          19          15          14
    23.95 Total new obligations.............         -17         -15         -14
    24.40 Unobligated balance carried
            forward, end of year............           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.00   Appropriation...................           7           5           4
    69.00 Offsetting collections (cash).....          52          49          43
    69.27 Capital transfer to general fund..          -2          -1          -1
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................          50          48          42
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          57          53          46
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          21          21          28
    73.10 Total new obligations.............          17          15          14
    73.20 Total outlays (gross).............         -17          -8         -15
    74.40 Obligated balance, end of year....          21          28          27
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.98 Outlays from mandatory balances...          17           8          15
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of principal.....         -34         -34         -29
    88.40       Interest received on loans..         -18         -15         -14
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -52         -49         -43
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           5           4           3
    90.00 Outlays...........................         -35         -41         -28
    ---------------------------------------------------------------------------

        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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
              CHAFL LIQUIDATING
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         118         116         111
    1231  Disbursements: Direct loan
            disbursements...................           1

    [[Page 362]]

    1251  Repayments: Repayments and
            prepayments.....................          -3          -5          -3
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         116         111         108
    ----------------------------------------------------------------------------

              HIGHER EDUCATION FACILITIES
                  LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          27          24          22
    1251  Repayments: Repayments and
            prepayments.....................          -3          -2          -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          24          22          21
    ----------------------------------------------------------------------------

              COLLEGE HOUSING LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         313         284         257
    1251  Repayments: Repayments and
            prepayments.....................         -29         -27         -25
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         284         257         232
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0242-0-1-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        CHAFL LIQUIDATING:
    0111  Revenue...........................                          9            12              9
    0112  Expense...........................                        -35           -16            -13
                                            ------------ --------------  ------------  -------------
    0115    Net income or loss (-)..........                        -26            -4             -4
        HIGHER EDUCATION FACILITIES LOANS:
    0121  Revenue...........................                          3             2              2
    0122  Expense...........................                         -2            -1             -1
                                            ------------ --------------  ------------  -------------
    0125    Net income or loss (-)..........                          1             1              1
        COLLEGE HOUSING LOANS:
    0131  Revenue...........................                         40            35             31
    0132  Expense...........................                        -91           -35            -31
                                            ------------ --------------  ------------  -------------
    0135    Net income or loss (-)..........                        -51
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................                         52            49             42
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................                       -128           -52            -45
                                            ------------ --------------  ------------  -------------
    0195  Total income or loss (-)..........                        -76            -3             -3
                                            ------------ --------------  ------------  -------------
    0199  Total comprehensive income........                        -76            -3             -3
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0242-0-1-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1601    Direct loans, gross.............                        425           390            362
    1602    Interest receivable.............                          6             6              5
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................                        431           396            367
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                        431           396            367
        LIABILITIES:
          Federal liabilities:

    2103    Debt............................                        236           196            164
    2104    Resources payable to Treasury...                        195           200            203
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                        431           396            367
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                        431           396            367
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    25.3  Other purchases of goods and
            services from Government
            accounts........................           1
    43.0  Interest and dividends............          16          15          14
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          17          15          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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct Loan Awards................          16          42          40
    00.02 Interest paid to Treasury.........           1           2           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          17          44          42
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...          38          44          43
    22.60 Portion applied to repay debt.....                                  -1
    22.70 Balance of authority to borrow
            withdrawn.......................         -21
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          17          44          42
    23.95 Total new obligations.............         -17         -44         -42
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.10   Authority to borrow.............          37          42          40
    69.00 Offsetting collections (cash).....           1           2           3
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................          38          44          43
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          25          30          34
    73.10 Total new obligations.............          17          44          42
    73.20 Total financing disbursements
            (gross).........................         -12         -40         -37
    74.40 Obligated balance, end of year....          30          34          39
    87.00 Total financing disbursements
            (gross).........................          12          40          37
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............          37          42          40
    90.00 Financing disbursements...........          11          38          34
    ---------------------------------------------------------------------------

        The Federal Financing Bank (FFB) purchases 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. HBCU bonds are also 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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........         311         295         254
    1142  Unobligated direct loan limitation
            (-).............................        -295        -253        -214
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...          16          42          40
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          21          31          70
    1231  Disbursements: Direct loan
            disbursements...................          11          39          35
    1251  Repayments: Repayments and
            prepayments.....................          -1                      -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          31          70         104
    ---------------------------------------------------------------------------

    [[Page 363]]

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4255-0-3-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................          25             30            33             38
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..          21             31            70            104
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          21             31            70            104
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          46             61           103            143
        LIABILITIES:
    2103  Federal liabilities: Debt.........          46             61           103            143
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          46             61           103            143
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          46             61           103            143
    -----------------------------------------------------------------------------------------------

                     OFFICE OF STUDENT FINANCIAL ASSISTANCE

                                  Federal Funds

    General and special funds:

                          Student Financial Assistance

        For carrying out subparts 1[,], and 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, [$12,285,500,000] $12,767,500,000, which shall remain
    available through September 30, [2003.]
        [The maximum Pell Grant for which a student shall be eligible during
    award year 2002-2003 shall be $4,000.] 2004: Provided, That
    notwithstanding section 401(b)(2)(A) and 401(g) of the Act, the
    Secretary shall, prior to the publication of the Pell Grant payment
    schedule, establish the maximum Pell Grant award using the latest data
    satisfactory to the Secretary to determine the maximum award supportable
    by amounts available under this heading in this and prior appropriations
    Acts. (Department of Education Appropriations Act. 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Federal Pell grants:

    01.01   Federal Pell grants.............       8,978       9,648      10,134
          Campus-based aid:

    02.01   Federal supplemental educational
              opportunity grants (SEOG).....         692         727         725
    02.02   Federal work-study..............       1,017       1,017       1,011
    02.03   Federal Perkins loans: Federal
              capital contributions.........         101         100         100
    02.05   Federal Perkins loans: Loan
              cancellations.................          60          68          68
                                               ---------   ---------  ----------
    02.91     Subtotal, Campus-based
                activities..................       1,870       1,912       1,904
    03.01 Leveraging educational assistance
            partnership.....................          55          67
    04.01 Loan forgiveness for child care
            providers.......................                       2           1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................      10,903      11,629      12,039
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       1,492       1,288       1,945
    22.00 New budget authority (gross)......      10,674      12,286      12,768
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          25
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      12,191      13,574      14,713
    23.95 Total new obligations.............     -10,903     -11,629     -12,039
    24.40 Unobligated balance carried
            forward, end of year............       1,288       1,945       2,674
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................      10,674      12,286      12,768
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       6,476       7,153       6,789
    73.10 Total new obligations.............      10,903      11,629      12,039
    73.20 Total outlays (gross).............     -10,161     -11,993     -11,420
    73.40 Adjustments in expired accounts
            (net)...........................         -40
    73.45 Recoveries of prior year
            obligations.....................         -25
    74.40 Obligated balance, end of year....       7,153       6,789       7,408
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................       2,650       3,805       2,958
    86.93 Outlays from discretionary
            balances........................       7,511       8,188       8,463
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      10,161      11,993      11,420
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      10,674      12,286      12,768
    90.00 Outlays...........................      10,161      11,993      11,420
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2001 actual  2002 est.   2003 est.
    Enacted/requested:
      Budget Authority..................      10,674      12,286      12,768
      Outlays...........................      10,161      11,993      11,421
    Supplemental proposal:
      Budget Authority..................                   1,276
      Outlays...........................                               1,276
                                        ------------------------------------
    Total:
      Budget Authority..................      10,674      13,562      12,768
      Outlays...........................      10,161      11,993      12,697
                                        ====================================

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:\1\
    1210  Outstanding, start of year........         615         606         596
    1251  Repayments: Repayments and
            prepayments.....................         -28         -27         -27
          Write-offs for default:

    1263    Direct loans....................          -9          -9          -9
    1264    Other adjustments, net..........          27          27          18
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         606         596         578
    ---------------------------------------------------------------------------
        \1\ Includes in all years institutional matching share of defaulted
    notes assigned from institutions to the Education Department.

        The Administration's 2003 budget for the SFA account is $12.768
    billion, an increase of $482 million, or 4 percent, over the 2002
    appropriation, which together with matching funds (less allowable
    administrative costs) would provide nearly 7.5 million awards totalling
    more than $14.2 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 $10.863 billion, an increase of $549
    million over the 2002 appropriation level. The budget also proposes a
    2002 supplemental appropriation of $1.276 billion to fully fund the
    $4,000 maximum award in academic year 2002-2003. (For more information,
    please see the Supplemental Proposals chapter of this document.)

        Pell Grant costs are highly dependent on volatile and economic
    trends, making it difficult to project the required funding level for a
    given maximum award at the time of the appropriation, which may be nine
    or more months prior to the affected academic year. Accordingly, the
    Administration is proposing that the Secretary of Education use the most
    recent program cost projections to set the maximum award for each
    upcoming academic year immediately prior to the publication of the Pell
    Grant payment schedule, which must occur by February 1 each year. Under
    current estimates, the Administration's request for 2003 would maintain
    the Pell Grant maximum award at $4,000 for academic year 2003-2004, the
    highest level ever and a full $700, or 21 percent, above the level only
    three years earlier. Nearly 4.5 million students would receive awards
    under this request, an increase of 55,000 over 2002.

        Campus-based programs.--The Federal Supplemental Educational
    Opportunity Grants, Federal Work-Study, and Federal Perkins Loan
    programs are called the ``campus-based''

    [[Page 364]]

    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 $725 million for the SEOG program in
    2003, the same as the 2002 level. This level of funding would provide
    approximately $918 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. The Administration proposes $1.011 billion, the same as the
    2002 appropriation, for the Work-Study program, which will provide $1.2
    billion in aid to nearly 1 million students.

        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 2002
    level. This level of funding would provide $1.2 billion in available aid
    to some 715,000 needy undergraduate and graduate students in the 2003-
    2004 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 $67.5
    million, the same as the 2002 level.

        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 2003, the same
    as the 2002 level. Fewer than 100 recipients are expected in either 2002
    or 2003.

        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 thousands]

                                         2001 actual  2002 est.   2003 est.
    Pell grants.........................   9,850,580  10,707,780  10,840,290
    Student loans:
      Guaranteed student loans:
        Stafford loans..................  11,882,308  12,703,968  13,585,032
        Unsubsidized Stafford loans.....  10,144,360  10,893,200  11,697,856
        PLUS............................   2,667,148   2,934,287   3,230,084
      Direct student loans:
        Stafford loans..................   5,388,042   5,748,126   6,133,202
        Unsubsidized Stafford loans.....   3,985,785   4,277,414   4,590,536
        PLUS............................   1,260,807   1,378,308   1,507,071
      Consolidation:
        FFEL............................   9,255,251   8,334,685   6,877,114
        Direct Loans....................   7,760,000   8,643,078   5,307,205
                                        ------------------------------------
            Student loans, subtotal.....  52,343,700  54,913,066  52,928,100
    Work-study..........................   1,214,643   1,214,643   1,214,643
    Supplemental educational opportunity
    grants..............................     874,684     917,722     917,722
    Perkins loans.......................   1,194,989   1,202,200   1,202,200
    Leveraging educational assistance
    partnership.........................     135,000     171,000           0
    Loan forgiveness for child care
    providers...........................       1,000       1,000       1,000
                                        ------------------------------------
            Total aid available.........  65,614,595  69,127,410  67,103,955
                                        ====================================
        Note: Detail may not add to totals due to rounding.

                              NUMBER OF AID AWARDS

                                 [In thousands]

                                         2001 actual  2002 est.   2003 est.
    Pell grants.........................       4,284       4,444       4,499
    Guaranteed student loans:
      Stafford loans....................       2,890       3,084       3,269
      Unsubsidized Stafford loans.......       2,041       2,199       2,330
      PLUS..............................         310         334         353
      Consolidation.....................         309         308         222
    Direct student loans:
      Stafford loans....................       1,273       1,324       1,399
      Unsubsidized Stafford loans.......         866         878         929
      PLUS..............................         152         153         161
      Consolidation.....................         367         357         256
    Work-study..........................         970         970         970
    Supplemental educational opportunity
    grants..............................       1,169       1,227       1,227
    Perkins loans.......................         711         715         715
    Leveraging Educational Assistance
    Partnership.........................         135         171           0
    Loan forgiveness for child care
    providers...........................                       *           *
                                        ------------------------------------
          Total awards..................      15,477      16,164      16,329
                                        ====================================
        Note: Detail may not add to totals due to rounding.
        *Fewer than 500 recipients

                               AVERAGE AID AWARDS

                               [In whole dollars]

                                         2001 actual  2002 est.   2003 est.
    Pell grants.........................       2,299       2,409       2,409
    Guaranteed student loans:
      Stafford loans....................       3,390       3,397       3,427
      Unsubsidized Stafford loans.......       4,077       4,065       4,120
      PLUS..............................       7,359       7,504       7,817
      SLS...............................           0           0           0
      Consolidation.....................      29,378      26,504      30,420
    Direct student loans:
      Stafford loans....................       3,491       3,582       3,615
      Unsubsidized Stafford loans.......       3,824       4,043       4,103
      PLUS..............................       7,097       7,708       8,010
      Consolidation.....................      20,976      24,033      20,634
    Work-study..........................       1,252       1,252       1,252
    Supplemental educational opportunity
    grants..............................         748         748         748
    Perkins loans.......................       1,681       1,681       1,681
    Leveraging Educational Assistance
    Partnership.........................       1,000       1,000           0
    Loan forgiveness for child care
    providers...........................      13,333      13,333      13,333
                                        ====================================
    Unduplicated student count..........       7,611       8,064       8,403

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

                     ADMINISTRATIVE PAYMENTS TO INSTITUTIONS

                            [In millions of dollars]

                                         2001 actual  2002 est.   2003 est.
    Pell grants.........................      21,420      22,220      22,495

    [[Page 365]]

    Work-study..........................      75,897      75,897      75,897
    Supplemental educational opportunity
    grants..............................      34,987      36,709      36,709
    Perkins loans.......................      47,800      48,088      48,088

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

                             DEFAULTED PERKINS LOANS

                            (In millions of dollars)

                                         2001 actual  2002 est.   2003 est.
    Outstanding defaulted loans,
        beginning of year:
      Assigned defaulted loans \1\......         615         606         596
      Unassigned defaulted loans \2\....         952         956         960
    New defaulted loans.................         155         164         167
    Collections on assigned loans.......         -28         -27         -27
    Collections on unassigned loans.....        -114        -125        -136
    Write-offs for assigned loans.......          -9          -9          -9
    Write-offs for unassigned loans.....          -9          -9          -9
                                        ------------------------------------
    Outstanding defaulted loans, end of
    year................................       1,562       1,556       1,542
                                        ====================================
        \1\ Permanently assigned to the Federal Government for collection.
        \2\ Unassigned loans at institutions.

                           Student Aid Administration

        For Federal administrative expenses to carry out part D of title I;
    subparts 1, 3, and 4 of part A; and parts B, C, D, and E of title IV of
    the Higher Education Act of 1965, as amended, $936,386,000, which shall
    remain available through September 30, 2004, of which not more than
    $195,000,000 shall be for account maintenance fees for fiscal year 2003
    that are payable to guaranty agencies under part B and are calculated in
    accordance with section 458 of the Act.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0202-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Student aid administration........           3           2         936
                                               ---------   ---------  ----------
    10.00   Total new obligations...........           3           2         936
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           3           2         936
    23.95 Total new obligations.............          -3          -2        -936
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................           3           2         936
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............           3           2         936
    73.20 Total outlays (gross).............          -3          -2        -603
    74.40 Obligated balance, end of year....                                 333
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           3           2         603
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           3           2         936
    90.00 Outlays...........................           3           2         603
    ---------------------------------------------------------------------------

      Budget Authority and Outlays Excluding Full Funding for Federal Retiree
                           Costs (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 934
    90.00 Outlays...........................                                 601
    ---------------------------------------------------------------------------

        The Department of Education manages Federal student aid programs
    that will provide over $67 billion in Federal student aid grants and
    loans to over 8 million students and parents in 2003. Primary
    responsibility for administering these programs lies with the Office of
    Postsecondary Education and the performance-based Office of Student
    Financial Assistance (SFA). SFA was created by Congress in 1998 with a
    mandate to improve service to students and other student aid program
    participants, reduce the cost of student aid administration, and improve
    accountability and program integrity.

        The Department's student aid administrative activities are funded
    from four main sources: (1) funds appropriated on a permanent basis
    under section 458 of the Higher Education Act; (2) a portion of the
    Department's general Program Administration funds; (3) a discretionary
    appropriation partially supporting administrative activities associated
    with the Federal Family Education Loan (FFEL) program; and (4) permanent
    funds from the Direct Loan program subsidy account supporting the
    origination of Direct Consolidation Loans. Student aid administrative
    funds totaled $887 million in 2002, $180 million of which supported the
    payment of account maintenance fees to FFEL guaranty agencies.

        The budget for 2003 includes $936 million for student aid
    administration. In order to improve accountability and simplify program
    oversight and operations, the Administration is proposing to consolidate
    funding for student aid administrative activities into a single
    discretionary account. Funding levels for this account will be based on
    a workload-based methodology consistent with the goals of the
    performance-based organization.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0202-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............                                  81
    11.5    Other personnel compensation....                                   5
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..                                  86
    12.1  Civilian personnel benefits.......           3           2          23
    21.0  Travel and transportation of
            persons.........................                                   6
    23.1  Rental payments to GSA............                                  12
    23.3  Communications, utilities, and
            miscellaneous charges...........                                  53
    24.0  Printing and reproduction.........                                   9
    25.1  Advisory and assistance services..                                   4
    25.2  Other services....................                                  45
    25.3  Other purchases of goods and
            services from Government
            accounts........................                                   8
    25.7  Operation and maintenance of
            equipment.......................                                 491
    26.0  Supplies and materials............                                   1
    31.0  Equipment.........................                                   3
    41.0  Grants, subsidies, and
            contributions...................                                 195
                                               ---------   ---------  ----------
    99.9    Total new obligations...........           3           2         936
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0202-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......                               1,118
    ---------------------------------------------------------------------------

                        Federal Student Loan Reserve Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4257-0-3-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.02 Obligations, non-federal..........       3,595       4,060       4,613
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       3,595       4,060       4,613
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       2,232       2,463       1,409
    22.00 New budget authority (gross)......       3,826       4,091       4,590
    22.40 Capital transfer to general fund..                  -1,085
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       6,058       5,469       5,999
    23.95 Total new obligations.............      -3,595      -4,060      -4,613
    24.40 Unobligated balance carried
            forward, end of year............       2,463       1,409       1,386
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...       3,826       4,091       4,590
    ----------------------------------------------------------------------------

    [[Page 366]]

        Change in obligated balances:
    73.10 Total new obligations.............       3,595       4,060       4,613
    73.20 Total outlays (gross).............      -3,595      -4,060      -4,613
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................       3,595       4,060       4,590
    86.98 Outlays from mandatory balances...                                  23
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       3,595       4,060       4,613
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............      -3,417      -3,687      -4,207
    88.40     Non-Federal sources...........        -409        -404        -383
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -3,826      -4,091      -4,590
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................        -231         -31          23
    ---------------------------------------------------------------------------

        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    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................       2,092          3,826         4,091          4,590
    0102  Expense...........................      -1,953         -3,595        -4,060         -4,613
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............         139            231            31            -23
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4257-0-3-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       2,232          2,462         1,408          1,386
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       2,232          2,462         1,408          1,386
        NET POSITION:
    3300  Cumulative results of operations..       2,232          2,462         1,408          1,386
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       2,232          2,462         1,408          1,386
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       2,232          2,462         1,408          1,386
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4257-0-3-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................         246         264         258
    42.0  Insurance claims and indemnities..       3,349       3,796       4,355
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       3,595       4,060       4,613
    ---------------------------------------------------------------------------

        For Budget Enforcement Act purposes, the Administration will use the
    Congressional Budget Office's estimates of the costs of legislative
    proposals rather than calculating costs against baselines contained in
    the Appendix. The Administration is developing, and will implement, a
    new method of calculating student loan credit cost estimates for the
    2003 Mid-Session Review.

    Credit accounts:

              Federal Direct Student Loan Program, Program Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      2001 actual   2002 est.   2003 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........................         787         783           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,946         783           2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          10          15
    22.00 New budget authority (gross)......       1,931         783
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          20
    22.40 Capital transfer to general fund..                     -15
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,961         783
    23.95 Total new obligations.............      -1,946        -783          -2
    24.40 Unobligated balance carried
            forward, end of year............          15                      -2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                                -797
          Mandatory:

    60.00   Appropriation...................       1,931         783         797
          Offsetting collections (cash):

    69.00   Offsetting collections (cash)...       1,039         731         617
    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..      -1,717        -731        -617
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,931         783
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         347         299         373
    73.10 Total new obligations.............       1,946         783           2
    73.20 Total outlays (gross).............      -1,974        -708        -319
    73.45 Recoveries of prior year
            obligations.....................         -20
    74.40 Obligated balance, end of year....         299         373          56
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                -512
    86.97 Outlays from new mandatory
            authority.......................       1,775         498         512
    86.98 Outlays from mandatory balances...         199         210         319
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,974         708         319
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........      -1,717        -731        -617
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         214          52        -617
    90.00 Outlays...........................         257         -23        -298
    ---------------------------------------------------------------------------

      Budget Authority and Outlays Excluding Full Funding for Federal Retiree
                           Costs (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         212          49        -619
    90.00 Outlays...........................         255         -26        -300
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2001 actual  2002 est.   2003 est.
    Enacted/requested:
      Budget Authority..................         214          52        -617
      Outlays...........................         257         -23        -298

    [[Page 367]]

    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                   3
      Outlays...........................                                  15
                                        ------------------------------------
    Total:
      Budget Authority..................         214          52        -614
      Outlays...........................         257         -23        -283
                                        ====================================

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

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    115001Stafford..........................       5,522       6,234       6,651
    115002Unsubsidized Stafford.............       4,314       4,793       5,145
    115003PLUS..............................       1,396       1,535       1,679
    115004Consolidated......................       8,682       8,704       5,368
                                               ---------   ---------  ----------
    115901Total direct loan levels..........      19,914      21,266      18,843
        Direct loan subsidy (in percent):
    132001Stafford..........................        7.16        3.63        4.97
    132002Unsubsidized Stafford.............      -12.61      -12.40      -12.25
    132003PLUS..............................       -9.49       -8.95       -9.80
    132004Consolidated......................       -7.03       -4.02       -3.75
                                               ---------   ---------  ----------
    132901Weighted average subsidy rate.....       -4.47       -4.02       -3.52
        Direct loan subsidy budget authority:
    133001Stafford..........................         396         226         331
    133002Unsubsidized Stafford.............        -544        -594        -630
    133003PLUS..............................        -133        -137        -165
    133004Consolidated......................        -610        -350        -201
                                               ---------   ---------  ----------
    133901Total subsidy budget authority....        -891        -855        -665
        Direct loan subsidy outlays:
    134001Stafford..........................         295         257         275
    134002Unsubsidized Stafford.............        -584        -519        -553
    134003PLUS..............................        -140        -122        -140
    134004Consolidated......................        -610        -347        -199
                                               ---------   ---------  ----------
    134901Total subsidy outlays.............      -1,039        -731        -617
        Direct loan upward reestimate subsidy budget
                    authority:
    135005Upward reestimate subsidy budget
            authority.......................       1,159
                                               ---------   ---------  ----------
    135901Total upward reestimate budget
            authority.......................       1,159
        Direct loan upward reestimate subsidy outlays:
    136005Upward reestimates subsidy outlays       1,159
                                               ---------   ---------  ----------
    136901Total upward reestimate outlays...       1,159
        Direct loan downward reestimate subsidy budget
                    authority:
    137005Downward reestimates offsetting
            collection......................        -678
                                               ---------   ---------  ----------
    137901Total downward reestimate budget
            authority.......................        -678
        Direct loan downward reestimate subsidy
                    outlays:
    138005Downward reestimates offsetting
            collection......................        -678
                                               ---------   ---------  ----------
    138901Total downward reestimate subsidy
            outlays.........................        -678
    ----------------------------------------------------------------------------

        Student loan administrative expense data:
    351001Budget authority..................         772         783
    359001Outlays...........................         815         708         319
    ---------------------------------------------------------------------------

        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 2003, 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 2003
    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.

        From its inception in 1965 through 2000, the FFEL program has
    provided over $347 billion in loans to postsecondary students and their
    parents. Since July 1, 1994, the Direct Loan program has provided $92
    billion in new and consolidation loans to students and parents. Taken
    together, the FFEL and Direct Loan programs will make almost $38 billion
    in new loans available in 2002. 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 30 percent in academic year 2001-2002. 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

    [[Page 368]]

    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 mathematics, science, and special education
    teachers considered highly qualified under criteria established in the
    No Child Left Behind Act of 2001.

        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.

        Student loan program administration activities are supported from a
    variety of sources, including a permanent appropriation authorized under
    Section 458 of the Higher Education Act, a small discretionary
    appropriation partially supporting FFEL program administration, a
    portion of funds appropriated under the Department's discretionary
    Program Administration account, and subsidy funds associated with the
    origination of Direct Consolidation Loans. In order to improve
    accountability and simplify the funding process for these administrative
    activities, the President is proposing to create a unified,
    discretionary Student Aid Administration account.

        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)

    ----------------------------------------------------------------------------
                                            2001 actual    2002 est.   2003 est.
    ----------------------------------------------------------------------------
    Program Cost:
    FFEL:
      Liquidating \1\.......................(1,063,810)    (744,810)   (625,162)
      Program:
        Regular.............................  2,930,652    3,302,001   3,397,928
        Consolidation.......................    137,638      479,229     702,793
        Reestimate of Prior Year Costs......(4,727,793)            0           0
        Non-Contractual Modifications \2\...          0            0      23,540
                                            -----------  -----------  ----------
          Subtotal, Program.................(1,659,503)    3,781,230   4,124,260
          Total FFEL:.......................(2,723,314)    3,036,420   3,499,098
    Direct Loans:
      Program:
        Regular.............................  (428,683)    (383,848)   (414,192)
        Consolidation.......................  (610,326)    (347,452)   (199,020)
        Reestimate of Prior Year Costs......    481,223            0           0
        Non-Contractual Modification \2\....          0            0      12,127
          Total, Direct Loans...............  (557,786)    (731,300)   (601,085)
    Administration:\3\
      FFEL :\4\.............................     48,000       48,836           0
      Student Aid \5\.......................    784,755      780,000           0
                                            -----------  -----------  ----------
        Subtotal, Administration............    832,955      828,836           0
        Total, FFEL and Direct Loans........(2,448,344)    3,133,956   2,898,013
    Program Cost Outlays:
    FFEL:
      Liquidating \1\.......................  (852,539)    (680,208)   (625,162)
      Program:
        Regular.............................  2,982,980    2,787,487   2,953,599
        Consolidation.......................    136,876      477,577     700,778
        Reestimate of Prior Year Costs......(4,727,793)            0           0
        Non-Contractual Modification \2\....          0            0      23,540
          Subtotal, Program.................(1,607,937)    3,265,064   3,677,917
          Total, FFEL.......................(2,460,476)    2,584,856   3,052,754
    Direct Loans:
      Program:
        Regular.............................  (428,683)    (383,848)   (414,192)
        Consolidation.......................  (610,326)    (347,452)   (199,020)
        Reestimate of Prior Year Costs......    481,223            0           0
        Non-Contractual Modifications \2\...          0            0      12,127
          Total, Direct Loans...............  (557,786)    (731,300)   (601,085)
    Administration:\3\
      FFEL \4\..............................     55,652       66,761      11,328
      Student Aid \5\.......................    812,948      705,229     318,743
                                            -----------  -----------  ----------
        Subtotal, Administration............    868,600      771,990     330,071
        Total, FFEL and Direct Loans........(2,149,662)    2,625,546   2,781,740
        \1\ Liquidating account reflects loans made prior to 1992.
        \2\ Reflects the costs or savings associated with policy changes that
    would affect the terms of existing loans.
        \3\ For 2003, no funds are requested for loan administration, as these
    costs would be part of the proposed discretionary Student Aid Administration
    account. Outlays in 2003 reflect outlays from prior year balances.
        \4\ Reflects annual discretionary appropriation.
        \5\ 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\

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................      11,882      12,704      13,585
      Unsubsidized Stafford.................      10,144      10,893      11,698
      PLUS..................................       2,667       2,934       3,230
                                               ---------   ---------  ----------
        Subtotal............................      24,694      26,531      28,513
      Consolidation.........................       9,255       8,335       6,877
                                               ---------   ---------  ----------
        Total, FFEL.........................      33,949      34,866      35,390
    Direct Loans:
      Stafford..............................       5,388       5,748       6,133
      Unsubsidized Stafford.................       3,986       4,277       4,591
      PLUS..................................       1,261       1,378       1,507
                                               ---------   ---------  ----------
        Subtotal............................      10,635      11,404      12,231
        Consolidation.......................       7,760       8,643       5,307
                                               ---------   ---------  ----------
        Total, Direct Loans.................      18,395      20,047      17,538
        Total, All Loans....................      52,344      54,913      52,928
    ---------------------------------------------------------------------------
        \1\ Net commitments equal gross commitments minus loan cancellations.

                           Number of Loans (In thousands)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       3,505       3,740       3,964
      Unsubsidized Stafford.................       2,488       2,680       2,839
      PLUS..................................         362         391         413
                                               ---------   ---------  ----------
        Subtotal............................       6,355       6,811       7,216
      Consolidation.........................         315         314         226
                                               ---------   ---------  ----------
        Total, FFEL.........................       6,670       7,125       7,442
    Direct Loans:
      Stafford..............................       1,543       1,605       1,696
      Unsubsidized Stafford.................       1,042       1,058       1,119
      PLUS..................................         178         179         188
                                               ---------   ---------  ----------
        Subtotal............................       2,763       2,842       3,003
      Consolidation.........................         370         360         257
                                               ---------   ---------  ----------
        Total, Direct Loans.................       3,133       3,201       3,261

    [[Page 369]]

        Total, All Loans....................       9,803      10,326      10,703
    ---------------------------------------------------------------------------

                        Average Loan Size (in whole dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       3,390       3,397       3,427
      Unsubsidized Stafford.................       4,077       4,065       4,120
      PLUS..................................       7,359       7,504       7,817
                                               ---------   ---------  ----------
        Weighted Average, without
          Consolidations....................       3,886       3,896       3,951
                                               ---------   ---------  ----------
      Consolidation.........................      29,378      26,505      30,420
                                               ---------   ---------  ----------
        Weighted Average, FFEL..............       5,090       4,893       4,755
    Direct Loans:
      Stafford..............................       3,491       3,582       3,615
      Unsubsidized Stafford.................       3,824       4,043       4,103
      PLUS..................................       7,097       7,708       8,010
                                               ---------   ---------  ----------
        Weighted Average, Without
          Consolidations....................       3,849       4,013       4,073
                                               ---------   ---------  ----------
      Consolidation.........................      20,976      24,033      20,614
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans......       5,871       6,262       5,379
        Weighted Average, All Loans.........       5,339       5,318       4,945
    ---------------------------------------------------------------------------

                Summary of Subsidy Rates, Default and Interest Rates

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    Subsidy Rates (in percent) \1\
    FFEL:
      Stafford..............................      18.15%      16.40%      16.85%
      Unsubsidized Stafford.................       4.98%       6.18%       4.64%
      PLUS..................................       2.98%       4.74%       4.67%
      Consolidation.........................       1.72%       5.73%      10.19%
        Weighted Average, FFEL..............       8.84%       9.76%      10.37%
    Direct Loans:
      Stafford..............................       7.16%       3.63%       5.02%
      Unsubsidized Stafford.................     -12.61%     -12.40%     -12.21%
      PLUS..................................      -9.49%      -8.95%      -9.80%
        Consolidation.......................      -7.03%      -4.02%      -3.75%
        Weighted Average, Direct Loans......      -4.47%      -4.02%      -3.50%
    Default Rates (in percent) \2\
    FFEL:
      Stafford..............................       16.22       16.24       16.27
      Unsubsidized Stafford.................       14.29       14.31       14.34
      PLUS..................................        9.61        9.66        9.70
      Consolidated..........................       20.53       20.53       20.52
        Weighted Average, FFEL..............       16.30       16.11       15.86
    Direct Loans:
      Stafford..............................       14.65       14.64       14.64
      Unsubsidized Stafford.................       13.31       13.32       13.34
      PLUS..................................        9.04        9.06        9.07
      Consolidation.........................       14.27       14.11       14.29
        Weighted Average, Direct Loans......       13.81       13.75       13.72
    Borrower Interest Rates (in percent) \3\
    FFEL:
      Stafford..............................        6.66        6.69        6.53
      Unsubsidized Stafford.................        6.66        6.69        6.54
      PLUS..................................        7.16        6.87        7.25
      Consolidation (reflects Sub and Unsub
        Stafford Only)......................        8.00        5.88        5.34
    Direct Loans:
      Stafford..............................        6.66        6.69        6.50
      Unsubsidized Stafford.................        6.66        6.69        6.50
      PLUS..................................        7.16        6.87        7.27
      Consolidation (reflects Sub and Unsub
        Stafford only)......................        7.88        5.75        5.63
    ---------------------------------------------------------------------------
        \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 three years of repayment to determine institutional eligibility to
    participate in Federal loan programs. These three-year rates tend to be
    lower than those included in this table.
        \3\ These represent average borrower interest rates during repayment for
    a typical borrower under standard repayment over the life of the loan.

              Composition of Loan Collections (In thousands of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    FFEL:
      Collections by Guaranty Agencies \1\..   2,699,372   1,487,641   1,609,925
      Collections by Department of Education
        \2\.................................     683,106     509,439     524,292
      Internal Revenue Service Tax Refund
        Offsets.............................     950,627     713,183     737,462
          Total, FFEL.......................   4,333,104   2,710,262   2,871,678
    Direct Loans:
      Collections by Department of Education
        \2\.................................     277,985     479,274     649,803
      Internal Revenue Service Tax Refund
        Offsets.............................      92,297      89,232     124,539
          Total, Direct Loans...............     370,282     568,506     774,343
        Total, FFEL and Direct Loan.........   4,703,387   3,278,768   3,646,020
    ---------------------------------------------------------------------------
        \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 $157 million
    for 2001 ($87 million for FFEL and $71 million for Direct Loans); $174
    million for 2002 ($90 million for FFEL and $84 million for Direct Loans);
    and $206 million for 2003 ($92 million for FFEL and $114 million for Direct
    Loans).

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

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    Direct Loans \1\
    Standard
        Percent of Loan Volume: \2\
          Stafford..........................       72.84       72.84       72.84
          Unsubsidized Stafford.............       68.66       68.66       68.66
          PLUS..............................       75.43       75.43       75.43
          Consolidation.....................       21.96       24.04       21.39
      Subsidy Rate (in percent):
          Stafford..........................        8.98        4.21        5.45
          Unsubsidized Stafford.............      -10.44      -11.89      -11.92
          PLUS..............................       -7.13       -7.31       -8.19
          Consolidation.....................       -0.09        0.25        1.83
    Graduated: \3\
        Percent of Loan Volume \2\
          Stafford..........................       18.77       18.77       18.77
          Unsubsidized Stafford.............       20.72       20.72       20.72
          PLUS..............................       18.11       18.11       18.11
          Consolidation.....................       18.18       20.39       17.56
        Subsidy Rate (in percent):
          Stafford..........................        2.82        2.08        3.94
          Unsubsidized Stafford.............      -17.90      -14.40      -13.73
          PLUS..............................      -18.22      -14.37      -15.12
          Consolidation.....................      -12.96        1.83        4.25
    Extended: \3\
        Percent of Loan Volume: \2\
          Stafford..........................        6.77        6.77        6.77
          Unsubsidized Stafford.............        8.80        8.80        8.80
          PLUS..............................        6.46        6.46        6.46
          Consolidation.....................       15.55       18.12       14.84
      Subsidy Rate (in percent):
          Stafford..........................        3.45        2.53        4.29
          Unsubsidized Stafford.............      -17.17      -13.87      -13.30
          PLUS..............................      -16.61      -12.84      -13.68
          Consolidation.....................      -11.65        1.65        3.71
    Income-Contingent:
        Percent of Loan Volume: \2\
          Stafford..........................        1.63        1.63        1.63
          Unsubsidized Stafford.............        1.83        1.83        1.83
          Consolidation.....................       44.31       37.44       46.21
        Subsidy Rate (in percent):
          Stafford..........................        0.60        0.19        1.12
          Unsubsidized Stafford.............        0.49       -1.59       -0.64
          Consolidation.....................       -9.32      -12.09      -11.13
        \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
             Debt Level             Maximum Term (in        Extended and
                                         years)            Graduated Plans
                                                          (Stafford) FY 02
    ------------------------------------------------------------------------
    Below $10,000...............                    12                 12.59
    $10,000-$20,000.............                    15                 35.21
    $20,000-$40,000.............                    20                 36.41
    $40,000-$60,000.............                    25                 11.07
    Above $60,000...............                    30                  4.72
    ------------------------------------------------------------------------

        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.

        Consistent with the Federal Credit Reform Act of 1990, the Office of
    Management and Budget establishes procedures for the estimation of
    subsidy rates for the Federal student loan programs. Subsidy costs for
    each loan type are estimated separately and, because costs can vary
    widely within a pro

    [[Page 370]]

    gram 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. 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)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       22.19       20.07       20.59
      Category 2: 4 year college, 3rd
        and 4th year students...........       16.38       14.86       15.33
      Category 3: 2 year college, all
        students........................       20.26       17.80       18.13
      Category 4: Proprietary school,
        all students....................       14.30       12.78       13.00
      Category 5: Graduate students.....       17.48       15.90       16.39

                        Gross Default Rates (in percent)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       20.40       20.40       20.40
      Category 2: 4 year college, 3rd
        and 4th year students...........       12.69       12.66       12.65
      Category 3: 2 year college, all
        students........................       31.52       31.48       31.45
      Category 4: Proprietary school,
        all students....................       45.67       45.52       45.38
      Category 5: Graduate students.....        8.15        8.13        8.13

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........        5.55        7.65        5.97
      Category 2: 4 year college, 3rd
        and 4th year students...........        4.54        5.58        4.10
      Category 3: 2 year college, all
        students........................        8.93       10.78        9.22
      Category 4: Proprietary school,
        all students....................        7.31       10.48        9.12
      Category 5: Graduate students.....        4.13        4.63        3.06

                        Gross Default Rates (in percent)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       20.31       20.31       20.31
      Category 2: 4 year college, 3rd
        and 4th year students...........       11.70       11.71       11.70
      Category 3: 2 year college, all
        students........................       27.74       27.71       27.68
      Category 4: Proprietary school,
        all students....................       35.67       35.55       35.44
      Category 5: Graduate students.....        8.23        8.21        8.21

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2001 actual  2002 est.   2003 est.
      All PLUS Loans....................        2.98        4.74        4.67

                        Gross Default Rates (in percent)

                                         2001 actual  2002 est.   2003 est.
      All PLUS Loans....................        9.61        9.66        9.70

                   DIRECT LOAN RISK CATEGORIES: STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       11.19        6.91        8.36
      Category 2: 4 year college, 3rd
        and 4th year students...........        5.45        2.08        3.53
      Category 3: 2 year college, all
        students........................       11.28        5.65        6.69
      Category 4: Proprietary school,
        all students....................        7.93        2.97        3.54
      Category 5: Graduate students.....        5.78        3.15        4.57

                        Gross Default Rates (in percent)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       19.97       19.96       19.96
      Category 2: 4 year college, 3rd
        and 4th year students...........       12.41       12.39       12.38
      Category 3: 2 year college, all
        students........................       31.34       31.29       31.26
      Category 4: Proprietary school,
        all students....................       45.07       44.92       44.77
      Category 5: Graduate students.....        8.00        7.98        7.98

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........      -12.18      -11.00      -10.48
      Category 2: 4 year college, 3rd
        and 4th year students...........      -12.84      -12.87      -12.81
      Category 3: 2 year college, all
        students........................       -6.75       -5.85       -6.31
      Category 4: Proprietary school,
        all students....................       -5.98       -3.52       -4.80
      Category 5: Graduate students.....      -13.88      -14.28      -13.95

                        Gross Default Rates (in percent)

                                         2001 actual  2002 est.   2003 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       19.64       19.63       19.63
      Category 2: 4 year college, 3rd
        and 4th year students...........       11.47       11.44       11.44
      Category 3: 2 year college, all
        students........................       27.35       27.32       27.28
      Category 4: Proprietary school,
        all students....................       34.98       34.86       34.75
      Category 5: Graduate students.....        8.07        8.05        8.05

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2001 actual  2002 est.   2003 est.
      All PLUS Loans....................       -9.49       -8.95       -9.80

                        Gross Default Rates (in percent)

                                         2001 actual  2002 est.   2003 est.
      All PLUS Loans....................        9.04        9.06       -9.07

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

    ----------------------------------------------------------------------------
                                            2001 actual    2002 est.   2003 est.
    ----------------------------------------------------------------------------
    FFEL:
    Interest costs:
    Interest benefits:
      FFEL Liquidating......................     19,583       15,176      13,656
      FFEL Program..........................  1,926,586    2,177,225   2,121,050
                                            -----------  -----------  ----------
        Total...............................  1,946,169    2,192,401   2,134,705
    Special allowance:
      FFEL Liquidating......................     44,675        5,414      12,268
      FFEL Program..........................    900,126      782,745     908,788
                                            -----------  -----------  ----------
        Total...............................    944,801      788,159     921,056
    Default costs and offsets:
    Default claims:
      FFEL Liquidating......................    185,476       32,326      13,772
      FFEL Program..........................  1,560,662    3,224,912   3,580,502
                                            -----------  -----------  ----------
        Total...............................  1,746,138    3,257,238   3,594,274
    Net default collections:
      FFEL Liquidating......................  1,018,996      888,787     740,109
      FFEL Program..........................  2,149,336    2,203,638   2,485,062
                                            -----------  -----------  ----------
        Total...............................  3,168,332    3,092,425   3,225,172
        Contract collection costs:..........
        FFEL Liquidating....................     45,454       57,493      50,217
      FFEL Program..........................    (2,753)            0       (640)
                                            -----------  -----------  ----------
        Total...............................     42,700       57,493      49,577
      Death, disability, and bankruptcy
          costs:
        FFEL Liquidating....................     48,570       36,531      27,729
        FFEL Program........................    274,703      371,638     421,800
                                            -----------  -----------  ----------
        Total...............................    323,273      408,169     449,529
    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..........     86,606       89,663      91,637

    [[Page 371]]

    Administrative Costs:
      Federal administration:
          FFEL..............................     48,000       48,000
          Student Aid Management (SAM) \2\..    635,000      770,000
      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\ For 2003, no funds are requested for loan administration, as these
    costs would be part of the proposed discretionary Student Aid Administration
    account.
        \3\ 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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          40          44
    11.3    Other than full-time permanent..           2
    11.5    Other personnel compensation....           2           2

                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          44          46
    12.1  Civilian personnel benefits.......          11          13           2
    21.0  Travel and transportation of
            persons.........................           5           4
    23.1  Rental payments to GSA............           5           7
    23.3  Communications, utilities, and
            miscellaneous charges...........          51          48
    24.0  Printing and reproduction.........          12           9
    25.1  Advisory and assistance services..           2           4
    25.2  Other services....................          50          41
    25.3  Other purchases of goods and
            services from Government
            accounts........................           4           7
    25.7  Operation and maintenance of
            equipment.......................         421         419
    26.0  Supplies and materials............           1
    31.0  Equipment.........................           6           2
    32.0  Land and structures...............           5           3
    41.0  Grants, subsidies, and
            contributions...................       1,329         180

                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,946         783           2
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         630         631
    ---------------------------------------------------------------------------

                       Federal Direct Student Loan Program

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      2001 actual   2002 est.   2003 est.

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

        Obligations by program activity:
    00.03 Non-Contractual Modifications.....                                  12
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................                                  12

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

        Budgetary resources available for obligation:
    23.95 Total new obligations.............                                 -12
    24.40 Unobligated balance carried
            forward, end of year............                                 -12

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

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...                                  -3
    69.27   Capital transfer to general fund                                   3
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........

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

        Change in obligated balances:
    73.10 Total new obligations.............                                  12
    73.20 Total outlays (gross).............                                 -12

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

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                                  12

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

        Offsets:
          Against gross budget authority and outlays:

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

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

        Net budget authority and outlays:
    89.00 Budget authority..................                                   3
    90.00 Outlays...........................                                  15
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      2001 actual   2002 est.   2003 est.

    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    115001Stafford..........................
    115002Unsubsidized Stafford.............
    115003PLUS..............................
    115004Consolidated......................
                                               ---------   ---------  ----------
    115901Total direct loan levels..........
        Direct loan subsidy (in percent):
    132001Stafford..........................                                0.05
    132002Unsubsidized Stafford.............                                0.04
    132003PLUS..............................                                0.00
    132004Consolidated......................                                0.00
                                               ---------   ---------  ----------
    132901Weighted average subsidy rate.....                                0.03
        Direct loan subsidy budget authority:
    133001Stafford..........................                                   3
    133002Unsubsidized Stafford.............                                   2
    133003PLUS..............................
    133004Consolidated......................
    133006Non-contractual modifcations......                                  12
                                               ---------   ---------  ----------
    133901Total subsidy budget authority....                                  17
        Direct loan subsidy outlays:
    134001Stafford..........................                                   2
    134002Unsubsidized Stafford.............                                   1
    134003PLUS..............................
    134004Consolidated......................
    134006Non-contractual modifications.....                                  12
                                               ---------   ---------  ----------
    134901Total subsidy outlays.............                                  15
        Direct loan upward reestimate subsidy budget
                    authority:
    135005Upward reestimate subsidy budget
            authority.......................
                                               ---------   ---------  ----------
    135901Total upward reestimate budget
            authority.......................
        Direct loan upward reestimate subsidy outlays:
    136005Upward reestimates subsidy outlays
                                               ---------   ---------  ----------
    136901Total upward reestimate outlays...
        Direct loan downward reestimate subsidy budget
                    authority:
    137005Downward reestimates offsetting
            collection......................
                                               ---------   ---------  ----------
    137901Total downward reestimate budget
            authority.......................
        Direct loan downward reestimate subsidy
                    outlays:
    138005Downward reestimates offsetting
            collection......................
                                               ---------   ---------  ----------
    138901Total downward reestimate subsidy
            outlays.........................
    ----------------------------------------------------------------------------

        Student loan administrative expense data:
    351001Budget authority..................
    359001Outlays...........................
    ---------------------------------------------------------------------------

        These schedules represent the Administration's proposal to expand
    teacher loan forgiveness. This proposal is described above in the main
    account narrative.

    [[Page 372]]

             Federal Direct Student Loan Program, Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct loans:

    01.01   Stafford........................       5,523       6,234       6,652
    01.02   Unsubsidized Stafford...........       4,314       4,793       5,145
    01.03   PLUS............................       1,396       1,535       1,679
    01.04   Consolidated....................       7,987       8,704       5,368
    01.05   Upward adjustment in prior
              obligations...................         350
                                               ---------   ---------  ----------
    01.91     Subtotal, direct loans
                obligations.................      19,570      21,266      18,844
          Payment for consolidations:

    02.04   Consolidated--Payment of Orig.
              Services......................          43          40          29
    03.01 Payment of contract collections...          71          84         114
    04.01 Interest payment to Treasury......       5,101       4,800       5,623
          Other obligations:

    08.01   Payment of negative subsidy to
              program account...............         852         793         604
    08.02   Payment of downward reestimate
              to program account............         531
    08.04 Payment of interest on downward
            reestimate to program account...         147
                                               ---------   ---------  ----------
    08.91   Subtotal, other obligations.....       1,530         793         604
                                               ---------   ---------  ----------
    10.00   Total new obligations...........      26,315      26,983      25,214
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........                       4
    22.00 New financing authority (gross)...      26,319      26,980      25,213
    22.10 Resources available from
            recoveries of prior year
            obligations.....................       4,555
    22.60 Portion applied to repay debt.....      -2,236
    22.70 Balance of authority to borrow
            withdrawn.......................      -2,319
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      26,319      26,984      25,213
    23.95 Total new obligations.............     -26,315     -26,983     -25,214
    24.40 Unobligated balance carried
            forward, end of year............           4
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.10   Authority to borrow.............      21,795      22,055      19,447
    69.00 Offsetting collections (cash).....      11,220      10,129      12,350
    69.10 Change in uncollected customer
            payments from Federal sources
            (unexpired).....................         -71
    69.47 Portion applied to repay debt.....      -6,625      -5,204      -6,584
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................       4,524       4,925       5,766
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................      26,319      26,980      25,213
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       7,052       4,239       3,945
    73.10 Total new obligations.............      26,315      26,983      25,214
    73.20 Total financing disbursements
            (gross).........................     -24,644     -27,278     -24,930
    73.45 Recoveries of prior year
            obligations.....................      -4,555
    74.00 Change in uncollected customer
            payments from Federal sources
            (unexpired).....................          71
    74.40 Obligated balance, end of year....       4,239       3,945       4,229
    87.00 Total financing disbursements
            (gross).........................      24,644      27,278      24,930
    ----------------------------------------------------------------------------

        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..      -1,058
              Non-Federal sources:
                Stafford loans:

    88.40         Repayment of principal,
                    Stafford................      -2,466      -2,113      -2,743
    88.40         Interest received on
                    loans, Stafford.........        -762      -1,287      -1,339
    88.40         Origination Fees, Stafford        -139        -169        -180
    88.40         Other Fees, Stafford......         -28
    88.40         Repayment of principal,
                    Unsubsidized Stafford...      -1,697      -1,353      -1,808
    88.40         Interest received on
                    loans, Unsubsidized
                    Stafford................        -516        -887        -948
    88.40         Origination Fees,
                    Unsubsidized Stafford...        -109        -126        -135
    88.40         Repayment of principal,
                    PLUS....................        -863        -510        -649
    88.40         Interest received on
                    loans, PLUS.............        -256        -352        -385
    88.40         Origination Fees, PLUS....         -35         -54         -59
    88.40         Payment of principal,
                    Consolidated............      -1,638      -1,377      -1,859
    88.40         Interest received on
                    loans, Consolidated.....        -494      -1,901      -2,245
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........     -11,220     -10,129     -12,350
          Against gross financing authority only:

    88.95   Change in receivables from
              program accounts..............          71
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............      15,170      16,851      12,863
    90.00 Financing disbursements...........      13,408      17,149      12,580
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       5,522       6,234       6,652
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       5,522       6,234       6,652
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      23,362      26,564      30,041
    1231  Disbursements: Direct loan
            disbursements...................       5,467       5,636       6,014
    1251  Repayments: Repayments and
            prepayments.....................      -2,466      -2,113      -2,743
    1261  Adjustments: Capitalized interest.         248
    1264  Write-offs for default: Other
            adjustments, net................         -47         -46         -52
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      26,564      30,041      33,260
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       4,314       4,793       5,145
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       4,314       4,793       5,145
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      15,048      17,519      20,903
    1231  Disbursements: Direct loan
            disbursements...................       4,039       4,186       4,492
    1251  Repayments: Repayments and
            prepayments.....................      -1,697      -1,353      -1,808
    1261  Adjustments: Capitalized interest.         167         580         479
    1264  Write-offs for default: Other
            adjustments, net................         -38         -29         -34
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      17,519      20,903      24,032
    ----------------------------------------------------------------------------

              PLUS
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       1,396       1,535       1,679
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       1,396       1,535       1,679
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       3,502       3,875       4,677
    1231  Disbursements: Direct loan
            disbursements...................       1,258       1,340       1,466
    1251  Repayments: Repayments and
            prepayments.....................        -863        -510        -649
    1261  Adjustments: Capitalized interest.           6
    1264  Write-offs for default: Other
            adjustments, net................         -28         -28         -33
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       3,875       4,677       5,461
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       7,987       8,704       5,647
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       7,987       8,704       5,647
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      16,610      22,526      29,711
    1231  Disbursements: Direct loan
            disbursements...................       7,402       8,643       5,307
    1251  Repayments: Repayments and
            prepayments.....................      -1,638      -1,377      -1,859
    1261  Adjustments: Capitalized interest.         231
    1264  Write-offs for default: Other
            adjustments, net................         -79         -81        -101
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      22,526      29,711      33,058
    ---------------------------------------------------------------------------

    [[Page 373]]

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-0-3-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       2,299            603         3,945          4,229
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..      58,351         70,313        85,332         95,810
    1402    Interest receivable.............       1,779          2,616         5,481          6,298
    1405    Allowance for subsidy cost (-)..       2,756          1,739         3,468          3,073
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....      62,886         74,668        94,281        105,181
    1901  Other Federal assets: Other assets         258          2,497
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      65,443         77,768        98,226        109,410
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................          96            579         2,406          4,086
    2103    Debt............................      65,347         77,189        95,820        105,324
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      65,443         77,768        98,226        109,410
        NET POSITION:
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      65,443         77,768        98,226        109,410
    -----------------------------------------------------------------  ----------------------------

        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 Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-4-3-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Other obligations:

    08.01   Payment of negative subsidy to
              program account...............                                  -5
                                               ---------   ---------  ----------
    10.00   Total new obligations...........                                  -5
    ----------------------------------------------------------------------------

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

        New financing authority (gross), detail:
          Mandatory:

    67.10   Authority to borrow.............                                  -5
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                  -5
    73.20 Total financing disbursements
            (gross).........................                                   5
    87.00 Total financing disbursements
            (gross).........................                                  -5
    ----------------------------------------------------------------------------

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

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-4-3-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................                                                      -5
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                                                      -5
        NET POSITION:
    3100  Appropriated capital..............                                                       5
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                                       5
    -----------------------------------------------------------------  ----------------------------

        These schedules represent the Administration's proposal to expand
    teacher loan forgiveness. This proposal is decribed above in the main
    account narrative.

                  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, $49,636,000.] (Department of Education Appropriations
    Act, 2002; additional authorizing legislation required.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Guaranteed Loan Net Subsidy.......       2,726       3,373       3,675
          Administrative expenses:

    00.09   Administrative expenses due to
              limitations...................          48          49
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       2,774       3,422       3,675
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           2           3
    22.00 New budget authority (gross)......       3,116       3,830       4,090
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1
    22.40 Capital transfer to general fund..        -342        -411        -415
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,777       3,422       3,675
    23.95 Total new obligations.............      -2,774      -3,422      -3,675
    24.40 Unobligated balance carried
            forward, end of year............           3
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation (Federal
              administration)...............          48          50
    40.71   Reduction pursuant to P.L. 107-
              116...........................                      -1
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............          48          49
          Mandatory:

    60.00   Appropriation...................       3,068       3,781       4,090
          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
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       3,116       3,830       4,090
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       1,265         862         952
    73.10 Total new obligations.............       2,774       3,422       3,675
    73.20 Total outlays (gross).............      -3,176      -3,332      -3,660
    73.45 Recoveries of prior year
            obligations.....................          -1
    74.40 Obligated balance, end of year....         862         952         967
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          37          37
    86.93 Outlays from discretionary
            balances........................          19          29          11
    86.97 Outlays from new mandatory
            authority.......................       1,871       2,409       2,685
    86.98 Outlays from mandatory balances...       1,249         855         963
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       3,176       3,332       3,660
    ----------------------------------------------------------------------------

        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..................      -1,612       3,830       4,090
    90.00 Outlays...........................      -1,552       3,332       3,660
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2001 actual  2002 est.   2003 est.
    Enacted/requested:
      Budget Authority..................      -1,612       3,830       4,090
      Outlays...........................      -1,552       3,330       3,659
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                  34
      Outlays...........................                                  30
                                        ------------------------------------
    Total:
      Budget Authority..................      -1,612       3,830       4,124
      Outlays...........................      -1,552       3,330       3,689
                                        ====================================

    [[Page 374]]

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

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Guaranteed loan levels supportable by subsidy
                    budget authority:
    215001Stafford..........................      12,601      14,407      15,408
    215002Unsubsidized Stafford.............      11,117      12,633      13,569
    215003PLUS..............................       2,985       3,346       3,685
    215004Consolidated......................       8,002       8,364       6,897
                                               ---------   ---------  ----------
    215901Total loan guarantee levels.......      34,705      38,750      39,559
        Guaranteed loan subsidy (in percent):
    232001Stafford..........................       18.15       16.40       16.81
    232002Unsubsidized Stafford.............        4.98        6.18        4.61
    232003PLUS..............................        2.98        4.74        4.67
    232004Consolidated......................        1.72        5.73       10.19
                                               ---------   ---------  ----------
    232901Weighted average subsidy rate.....        8.84        9.76       10.34
        Guaranteed loan subsidy budget authority:
    233001Stafford..........................       2,288       2,363       2,590
    233002Unsubsidized Stafford.............         554         781         626
    233003PLUS..............................          89         159         172
    233004Consolidated......................         138         479         703
                                               ---------   ---------  ----------
    233901Total subsidy budget authority....       3,069       3,782       4,091
        Guaranteed loan subsidy outlays:
    234001Stafford..........................       2,298       2,060       2,218
    234002Unsubsidized Stafford.............         577         611         583
    234003PLUS..............................          97         117         147
    234004Consolidated......................         137         478         701
                                               ---------   ---------  ----------
    234901Total subsidy outlays.............       3,109       3,266       3,649
        Guaranteed loan downward reestimate subsidy
                    budget authority:
    237005Downward reestimate...............      -4,728
                                               ---------   ---------  ----------
    237901Total downward reestimate subsidy
            budget authority................      -4,728
        Guaranteed loan downward reestimate subsidy
                    outlays:
    238005Downward reestimate subsidy
            outlays.........................      -4,728
                                               ---------   ---------  ----------
    238901Total downward reestimate subsidy
            outlays.........................      -4,728
    ----------------------------------------------------------------------------

        Administrative expense data:
    351001Budget authority..................          48          49
    359001Outlays...........................          56          67          11
    ---------------------------------------------------------------------------

        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. Consistent with the Administration's proposal to consolidate
    student aid administrative activities in a single discretionary account,
    these expenses are not reflected for 2003. For a discussion of this
    proposal, see the narrative description above in the Student Aid
    Administration account. 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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          21          23
    11.3    Other than full-time permanent..           1
    11.5    Other personnel compensation....           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          23          24
    12.1  Civilian personnel benefits.......           5           5
    23.1  Rental payments to GSA............           3           3
    23.3  Communications, utilities, and
            miscellaneous charges...........           3           2
    25.2  Other services....................           1           1
    25.3  Other purchases of goods and
            services from Government
            accounts........................           1           1
    25.7  Operation and maintenance of
            equipment.......................          11          12
    31.0  Equipment.........................           1           1
    41.0  Grants, subsidies, and
            contributions...................       2,726       3,373       3,675
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       2,774       3,422       3,675
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         345         326
    ---------------------------------------------------------------------------

                  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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Guaranteed Loan Net Subsidy.......                                  32
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................                                  32
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  34
    23.95 Total new obligations.............                                 -32
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.00   Appropriation...................                                  34
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                  32
    73.20 Total outlays (gross).............                                 -30
    74.40 Obligated balance, end of year....                                   2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                                  30
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                  34
    90.00 Outlays...........................                                  30
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
    Identification code 91-0231-4-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Guaranteed loan levels supportable by subsidy
                    budget authority:
    215001Stafford..........................
    215002Unsubsidized Stafford.............
    215003PLUS..............................
    215004Consolidated......................
                                               ---------   ---------  ----------
    215901Total loan guarantee levels.......
        Guaranteed loan subsidy (in percent):
    232001Stafford..........................                                0.04
    232002Unsubsidized Stafford.............                                0.03
    232003PLUS..............................                                0.00
    232004Consolidated......................                                0.00
                                               ---------   ---------  ----------
    232901Weighted average subsidy rate.....                                0.03
        Guaranteed loan subsidy budget authority:
    233001Stafford..........................                                   6
    233002Unsubsidized Stafford.............                                   4
    233003PLUS..............................
    233004Consolidated......................
                                               ---------   ---------  ----------
    233901Total subsidy budget authority....                                  10
        Guaranteed loan subsidy outlays:
    234001Stafford..........................                                   4
    234002Unsubsidized Stafford.............                                   2
    234003PLUS..............................

    [[Page 375]]

    234004Consolidated......................
                                               ---------   ---------  ----------
    234901Total subsidy outlays.............                                   6
        Guaranteed loan downward reestimate subsidy
                    budget authority:
    237005Downward reestimate...............
                                               ---------   ---------  ----------
    237901Total downward reestimate subsidy
            budget authority................
        Guaranteed loan downward reestimate subsidy
                    outlays:
    238005Downward reestimate subsidy
            outlays.........................
                                               ---------   ---------  ----------
    238901Total downward reestimate subsidy
            outlays.........................
    ----------------------------------------------------------------------------

        Administrative expense data:
    351001Budget authority..................
    359001Outlays...........................
    ---------------------------------------------------------------------------

        These schedules represent the Administration's proposal to expand
    teacher loan forgiveness. This proposal is described above in the main
    account narrative.

            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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits...............       2,557       1,443       1,359
    01.02   Special allowance...............         421         189         408
    01.03   Default claims..................       1,278       1,377       1,531
    01.04   Death, disability, and
              bankruptcy claims.............         142         138         148
    01.07   Contract collection costs.......          26          19          25
    01.08   Loan Processing Fee.............          29          94         100
    01.09   Voluntary flexible Agreement
              Performance Fee...............          48
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......       4,501       3,260       3,571
          Unsubsidized Stafford loans:

    02.02   Special allowance...............         275         144         291
    02.03   Default claims..................         644         725         905
    02.04   Death, disability, and
              bankruptcy claims.............          81          77          89
    02.07   Contract collection costs.......          11           4           6
    02.08   Loan Processing Fee.............          24          82          87
    02.09   Voluntary flexible agreement
              performance fee...............          21
                                               ---------   ---------  ----------
    02.91     Subtotal, Unsubsidized
                Stafford loans..............       1,056       1,032       1,378
          PLUS loans:

    03.02   Special allowance...............          18          19          24
    03.03   Default claims..................          71         176         199
    03.04   Death, disability, and
              bankruptcy claims.............          46          66          76
    03.07   Contract Collection Costs.......           1           1           1
    03.08   Loan Processing Fee.............           6          22          24
    03.09   Voluntary flexible agreement
              performance fee...............           7
                                               ---------   ---------  ----------
    03.91     Subtotal, PLUS loans..........         149         284         324
          SLS loans:

    04.02   Special allowance...............                       1           1
    04.03   Default claims..................          75          40          15
    04.04   Death, disability and bankruptcy
              claims........................          12           7           6
    04.07   Contract collection costs.......           3           5           5
    04.09   Voluntary flexible agreement
              performance fee...............           2
                                               ---------   ---------  ----------
    04.91     Subtotal, SLS loans...........          92          53          27
          Consolidation loans:

    05.02   Special allowance...............         129          58         168
    05.03   Default claims..................         453         861       1,016
    05.04   Death, disability, and
              bankruptcy claims.............         105         151         182
    05.07   Contract collection costs.......           3           4           5
    05.09   Voluntary flexible agreement
              performance fee...............          23
                                               ---------   ---------  ----------
    05.91     Subtotal, Consolidations loans         713       1,074       1,371
    08.02 Downward reestimate...............       3,526
    08.03 Adjusting payments to liquidating
            accounts........................         476
    08.04 Interest on downward reestimate...       1,202
                                               ---------   ---------  ----------
    08.91   Direct Program by Activities--
              Subtotal (1 level)............       5,204
                                               ---------   ---------  ----------
    10.00   Total new obligations...........      11,715       5,703       6,671
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       7,652       4,952       6,117
    22.00 New financing authority (gross)...       8,271       6,867       7,712
    22.10 Resources available from
            recoveries of prior year
            obligations.....................         744
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      16,667      11,819      13,829
    23.95 Total new obligations.............     -11,715      -5,703      -6,671
    24.40 Unobligated balance carried
            forward, end of year............       4,952       6,117       7,158
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...       8,271       6,867       7,712
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       1,868       1,392         677
    73.10 Total new obligations.............      11,715       5,703       6,671
    73.20 Total financing disbursements
            (gross).........................     -11,448      -6,417      -6,555
    73.45 Recoveries of prior year
            obligations.....................        -744
    74.40 Obligated balance, end of year....       1,392         677         792
    87.00 Total financing disbursements
            (gross).........................      11,448       6,417       6,555
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

    88.00         Stafford loans............      -2,298      -2,060      -2,218
    88.00         Unsubsidized Stafford.....        -577        -611        -583
    88.00         PLUS loans................         -97        -117        -147
    88.00         Consolidated loans........        -137        -478        -701
    88.25     Interest on uninvested funds..        -461        -395        -447
              Non-Federal sources:
                Student Loans: Stafford,
                  Unsubsidized Stafford,
                  PLUS, SLS & Consolidation:

    88.40         Stafford recoveries on
                    defaults................      -1,998      -1,071      -1,192
    88.40         Stafford origination fees.        -404        -435        -466
    88.40         Stafford Sallie Mae offset
                    fees....................         -27         -27         -24
    88.40         Other fees................        -188
    88.40         Unsubsidized Stafford
                    recoveries on defaults..        -803        -289        -363
    88.40         Unsubsidized Stafford
                    origination fees........        -332        -373        -400
    88.40         Unsubsidized Stafford
                    Sallie Mae offset fees..         -17         -18         -18
    88.40         PLUS recoveries on
                    defaults................         -65         -60         -73
    88.40         PLUS origination fees.....         -96         -99        -109
    88.40         PLUS Sallie Mae offset
                    fees....................          -6          -6          -6
    88.40         SLS recoveries on defaults        -207         -94         -93
    88.40         SLS Sallie Mae offset fees          -1
    88.40         Other fees................          -2
    88.40         Consolidation recoveries
                    on defaults.............        -240        -307        -411
    88.40         Consolidation origination
                    fees....................         -28         -41         -34
    88.40         Consolidated loan holders
                    fee.....................        -287        -386        -427
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -8,271      -6,867      -7,712
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........       3,177        -450      -1,157
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-0-3-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................      12,601      14,407      15,408
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      12,601      14,407      15,408
    2199  Guaranteed amount of guaranteed
            loan commitments................      12,601      14,407      15,408
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      63,723      69,103      70,587
    2231  Disbursements of new guaranteed
            loans...........................      11,337      12,435      13,297
    2251  Repayments and prepayments........      -4,450      -9,428     -10,560
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....      -1,365      -1,385      -1,534
    2263    Terminations for default that
              result in claim payments......        -142        -138        -148
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      69,103      70,587      71,642
    ----------------------------------------------------------------------------

    [[Page 376]]

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      69,103      70,587      71,642
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......       2,649       2,498       2,782
    2331    Disbursements for guaranteed
              loan claims...................       1,365       1,385       1,534
    2351    Repayments of loans receivable..      -1,241      -1,071      -1,192
    2361    Write-offs of loans receivable..         -30         -30         -34
    2364    Other adjustments, net..........        -245
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       2,498       2,782       3,090
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................      11,117      12,633      13,569
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      11,117      12,633      13,569
    2199  Guaranteed amount of guaranteed
            loan commitments................      11,117      12,633      13,569
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      36,718      41,838      46,790
    2231  Disbursements of new guaranteed
            loans...........................       9,624      10,651      11,438
    2251  Repayments and prepayments........      -3,736      -4,897      -6,196
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -687        -725        -893
    2263    Terminations for default that
              result in claim payments......         -81         -77         -89
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      41,838      46,790      51,050
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      41,838      46,790      51,050
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         901         922       1,337
    2331    Disbursements for guaranteed
              loan claims...................         687         725         893
    2351    Repayments of loans receivable..        -490        -289        -363
    2361    Write-offs of loans receivable..         -17         -21         -29
    2364    Other adjustments, net..........        -159
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         922       1,337       1,838
    ----------------------------------------------------------------------------

              PLUS
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       2,985       3,346       3,685
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       2,985       3,346       3,685
    2199  Guaranteed amount of guaranteed
            loan commitments................       2,985       3,346       3,685
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       8,131       9,626      10,519
    2231  Disbursements of new guaranteed
            loans...........................       2,621       2,834       3,120
    2251  Repayments and prepayments........      -1,004      -1,712      -1,912
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -76        -163        -199
    2263    Terminations for default that
              result in claim payments......         -46         -66         -76
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       9,626      10,519      11,452
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       9,626      10,519      11,452
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         196         189         280
    2331    Disbursements for guaranteed
              loan claims...................          76         163         199
    2351    Repayments of loans receivable..         -39         -60         -73
    2361    Write-offs of loans receivable..         -10         -12         -17
    2364    Other adjustments, net..........         -34
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         189         280         389
    ----------------------------------------------------------------------------

              SLS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       2,200       1,856       1,576
    2251  Repayments and prepayments........        -252        -227        -204
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -80         -46         -19
    2263    Terminations for default that
              result in claim payments......         -12          -7          -6
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       1,856       1,576       1,347
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       1,856       1,576       1,347
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         674         614         564
    2331    Disbursements for guaranteed
              loan claims...................          80          46          19
    2351    Repayments of loans receivable..        -131         -94         -93
    2361    Write-offs of loans receivable..          -2          -2          -2
    2364    Other adjustments, net..........          -7
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         614         564         488
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       8,002       8,364       6,897
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       8,002       8,364       6,897
    2199  Guaranteed amount of guaranteed
            loan commitments................       8,002       8,364       6,897
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      28,162      32,384      37,316
    2231  Disbursements of new guaranteed
            loans...........................       6,955       8,335       6,877
    2251  Repayments and prepayments........      -2,144      -2,438      -3,053
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -484        -814      -1,010
    2263    Terminations for default that
              result in claim payments......        -105        -151        -182
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      32,384      37,316      39,948
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      32,384      37,316      39,948
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         922       1,116       1,855
    2331    Disbursements for guaranteed
              loan claims...................         484         814       1,010
    2351    Repayments of loans receivable..        -139         -42        -411
    2361    Write-offs of loans receivable..         -22         -33         -43
    2364    Other adjustments, net..........        -129
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       1,116       1,855       2,411
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-0-3-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       9,741          6,531         6,117          7,158
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1501    Defaulted guaranteed loans
              receivable, gross.............       5,342          5,339         6,816          8,215
    1502    Interest receivable.............       1,189          1,287         1,390          1,501
    1505    Allowance for subsidy cost (-)..       1,503          1,830         2,233          2,724
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............       8,034          8,456        10,439         12,440
    1901  Other Federal assets: Other assets           2            336
                                            ------------ --------------  ------------  -------------

    [[Page 377]]

    1999    Total assets....................      17,777         15,323        16,556         19,598
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................       4,553          2,827         4,685          8,321
    2204  Non-Federal liabilities:
            Liabilities for loan guarantees.      13,224         12,496        11,871         11,277
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      17,777         15,323        16,556         19,598
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      17,777         15,323        16,556         19,598
    -----------------------------------------------------------------------------------------------

        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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                                   6
    24.40 Unobligated balance carried
            forward, end of year............                                   6
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...                                   6
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

    88.00         Stafford loans............                                  -4
    88.00         Unsubsidized Stafford.....                                  -2
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                  -6
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........                                  -6
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-4-3-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                                                       6
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                                       6
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................                                                       6
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                                                       6
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                                       6
    -----------------------------------------------------------------------------------------------

        These schedules represent the Administration's proposal to increase
    teacher loan forgiveness. This proposal is described above in the main
    account narrative.

                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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits, net of
              origination fees..............          19          15          14
    01.02   Special allowance net of
              origination fees..............          45           5          12
    01.03   Default claims..................         156          29          12
    01.04   Death, disability, and
              bankruptcy claims.............          41          27          20
    01.07   Contract collection costs.......          35          45          40
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......         296         121          98
          PLUS/SLS loans:

    02.01   Default claims..................          30           4           2
    02.02   Death, disability, and
              bankruptcy claims.............           7          10           8
    02.05   Contract collection costs.......           8          12           9
                                               ---------   ---------  ----------
    02.91     Subtotal, PLUS/SLS loans......          45          26          19
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         341         147         117
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         521         146
    22.00 New budget authority (gross)......         437         147         117
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          49
    22.40 Capital transfer to general fund..        -521        -146
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         486         147         117
    23.95 Total new obligations.............        -341        -147        -117
    24.40 Unobligated balance carried
            forward, end of year............         146
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...       1,501         892         742
    69.27   Capital transfer to general fund      -1,064        -745        -625
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........         437         147         117
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         422          65
    73.10 Total new obligations.............         341         147         117
    73.20 Total outlays (gross).............        -649        -212        -117
    73.45 Recoveries of prior year
            obligations.....................         -49
    74.40 Obligated balance, end of year....          65
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         227         147         117
    86.98 Outlays from mandatory balances...         422          65
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         649         212         117
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............        -476
              Federal student loans:
                Non-Federal sources:

    88.40         Fed collections on
                    defaulted loans,
                    Stafford................        -356        -260        -229
    88.40         Federal collections on
                    bankruptcies, Stafford..          -4          -2          -2
    88.40         Offsets against Federal
                    tax refunds,Stafford....        -173        -241        -204
    88.40         Reimbursements from
                    guaranty agencies,
                    Stafford................        -335        -230        -179
    88.40         Sallie Mae Offset Fee.....          -1
    88.40         Federal collections on
                    defaulted loans, PLUS/
                    SLS.....................         -80         -67         -56
    88.40         Federal collections on
                    bankruptcies, PLUS/SLS..          -1          -1
    88.40         Offsets against Federal
                    tax refunds, PLUS/SLS...         -21         -56         -45
    88.40         Reimbursements from
                    guaranty agencies, PLUS/
                    SLS.....................         -54         -35         -27
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,501        -892        -742
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      -1,064        -745        -625
    90.00 Outlays...........................        -852        -680        -625
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
              STAFFORD LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       5,481       3,612       1,812
    2251  Repayments and prepayments........      -1,512      -1,713        -979
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -316         -50         -15

    [[Page 378]]

    2263    Terminations for default that
              result in claim payments......         -41         -37         -28
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       3,612       1,812         790
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       3,612       1,812         790
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......      12,835      12,094      11,493
    2331    Disbursements for guaranteed
              loan claims...................         316          50          15
    2351    Repayments of loans receivable..        -628        -419        -344
    2361    Write-offs of loans receivable..        -183        -173        -164
    2364    Other adjustments, net..........        -246         -59         -46
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......      12,094      11,493      10,954
    ----------------------------------------------------------------------------

              PLUS/SLS LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       1,042         881         760
    2251  Repayments and prepayments........         -93        -103        -103
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -61          -8          -2
    2263    Terminations for default that
              result in claim payments......          -7         -10          -8
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........         881         760         647
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..         881         760         647
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......       2,151       2,026       1,921
    2331    Disbursements for guaranteed
              loan claims...................          61           8           2
    2351    Repayments of loans receivable..        -113         -75         -60
    2361    Write-offs of loans receivable..         -32         -30         -29
    2364    Other adjustments, net..........         -41          -8          -6
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       2,026       1,921       1,828
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0230-0-1-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        Stafford:
    0111  Revenue...........................       1,711            868           733            613
    0112  Expense...........................        -221           -296          -122            -98
                                            ------------ --------------  ------------  -------------
    0115  Net income or loss (-)............       1,490            572           611            515
        PLUS/SLS:
    0121  Revenue...........................         307            156           159            129
    0122  Expense...........................         -30            -45           -25            -19
                                            ------------ --------------  ------------  -------------
    0125  Net income or loss (-)............         277            111           134            110
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................       2,018          1,024           892            742
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................        -251           -341          -147           -117
                                            ------------ --------------  ------------  -------------
    0195  Total income or loss (-)..........       1,767            683           745            625
                                            ------------ --------------  ------------  -------------
    0199  Total comprehensive income........       1,767            683           745            625
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0230-0-1-502    2000 actual    2001 actual     2002 est.      2003 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................         889            191
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1701    Defaulted guaranteed loans,
              gross.........................      15,026         14,160        13,310         12,511
    1702    Interest receivable.............       2,007          1,740         1,514          1,317
    1703    Allowance for estimated
              uncollectible loans and
              interest (-)..................     -14,087        -14,533       -14,200        -13,600
                                            ------------ --------------  ------------  -------------
    1704      Defaulted guaranteed loans and
                interest receivable, net....       2,946          1,367           624            228
                                            ------------ --------------  ------------  -------------
    1799      Value of assets related to
                loan guarantees.............       2,946          1,367           624            228
    1901  Other Federal assets: Other assets         754             62
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       4,589          1,620           624            228
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................         246              8
    2204    Liabilities for loan guarantees.       4,343          1,612           624            228
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       4,589          1,620           624            228
        NET POSITION:
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       4,589          1,620           624            228
    -----------------------------------------------------------------------------------------------
        \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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          43          57          49
    33.0  Investments and loans.............         185          32          14
    41.0  Grants, subsidies, and
            contributions...................          64          21          26
    42.0  Insurance claims and indemnities..          49          37          28
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         341         147         117
    ---------------------------------------------------------------------------

                 OFFICE OF EDUCATIONAL RESEARCH AND IMPROVEMENT

                                  Federal Funds

    General and special funds:

                 Education Research, Statistics, and 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 4 of the No Child Left Behind Act of 2001; and title
    VI, part A of the Elementary and Secondary Education Act, $443,870,000:
    Provided, That $58,000,000 of the amount available for the national
    education research institutes 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.] (Department of Education Appropriations Act, 2002.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

            Research, development and
                dissemination:
    00.01     Research and dissemination....         120         122
    00.02     Regional educational
                laboratories................          65          67
    00.03     Statistics....................          80          85
    00.04   Assessment......................          40         112
    00.05   Eisenhower professional
              development Federal activities          23
    00.06   Fund for the Improvement of
              Education.....................         340           1
    00.07   Mulit-year grants and contracts.                      58

    [[Page 379]]

    00.08   Javits gifted and talented
              education.....................           8
    00.09   Eisenhower regional mathematics
              and science education
              consortia.....................          15
    00.10   National writing project........          10
    00.11   Civic education.................          12
    00.12   International education exchange          10
                                               ---------   ---------  ----------
    01.00 Total direct program..............         723         445
    09.01 Reimbursable program..............           5           5
                                               ---------   ---------  ----------
    10.00 Total new obligations.............         728         450
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           2           1
    22.00 New budget authority (gross)......         727         449
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         729         450
    23.95 Total new obligations.............        -728        -450
    24.40 Unobligated balance carried
            forward, end of year............           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         733         444
    40.75   Reduction pursuant to P.L. 106-
              554 (Labor/HHS)...............          -1
    41.00   Transferred to other accounts...         -10
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         722         444
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           5           5
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         727         449
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         720         876         502
    73.10 Total new obligations.............         728         450
    73.20 Total outlays (gross).............        -570        -824        -404
    73.40 Adjustments in expired accounts
            (net)...........................          -2
    74.40 Obligated balance, end of year....         876         502          98
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         132         107
    86.93 Outlays from discretionary
            balances........................         438         717         404
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         570         824         404
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -5          -5
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         722         444
    90.00 Outlays...........................         565         819         404
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2001 actual  2002 est.   2003 est.
    Enacted/requested:
      Budget Authority..................         722         444
      Outlays...........................         565         819         404
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 433
      Outlays...........................                                 107
                                        ------------------------------------
    Total:
      Budget Authority..................         722         444         433
      Outlays...........................         565         819         511
                                        ====================================

        The Administration will propose legislation reauthorizing the
    research, statistics, and assessment activities carried out by the
    Office of Educational Research and Improvement. When new authorizing
    legislation is enacted, resources for these programs will be requested.
    See the ``Legislative proposal, not subject to PAYGO'' schedule for
    additional details.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........           1           1
    11.3      Other than full-time permanent           1           1
                                               ---------   ---------  ----------
    11.9        Total personnel compensation           2           2
    24.0    Printing and reproduction.......           2           2
    25.1    Advisory and assistance services           2           2
    25.2    Other services..................          81         123
    25.3    Other purchases of goods and
              services from Government
              accounts......................          36          36
    25.5    Research and development
              contracts.....................          98          98
    25.7    Operation and maintenance of
              equipment.....................           6           6
    31.0    Equipment.......................           2           2
    41.0    Grants, subsidies, and
              contributions.................         494         174
                                               ---------   ---------  ----------
    99.0      Direct obligations............         723         445
    99.0  Reimbursable obligations..........           5           5
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         728         450
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          13          15
    ---------------------------------------------------------------------------

                 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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

            Research, development and
                dissemination:
    00.01     Research and dissemination....                                 175
    00.02     Regional educational
                laboratories................                                  68
    00.03     Statistics....................                                  95
    00.04   Assessment......................                                  95
                                               ---------   ---------  ----------
    01.00 Total direct program..............                                 433
    09.01 Reimbursable program..............                                   5
                                               ---------   ---------  ----------
    10.00 Total new obligations.............                                 438
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 438
    23.95 Total new obligations.............                                -438
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                                 433
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............                                   5
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................                                 438
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                 438
    73.20 Total outlays (gross).............                                -112
    74.40 Obligated balance, end of year....                                 326
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                 112
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                                  -5
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 433
    90.00 Outlays...........................                                 107
    ---------------------------------------------------------------------------

        Research and dissemination.--The Administration's proposal will
    address needed improvements in the quality and relevance of the
    Department's research activities. Funds will support a diverse portfolio
    of directed research, field-initiated studies, research and development
    centers, and interagency initiatives. New research on reading
    comprehension, early childhood education, and learning and cognition
    will expand the understanding of how children learn. Funds also will
    support fellowships for doctoral students to increase the nation's
    educational research capacity and dissemination activities that provide
    parents, teachers, and schools with valid information on effective
    educational practice.

    [[Page 380]]

        Regional educational laboratories.--Funds will be used to continue
    current contracts for the network of regional laboratories. The
    laboratories conduct applied research and development, dissemination,
    and technical assistance activities to address needs in their regions.

        Statistics.--Funds support the Department's statistical data
    collection activities, which are conducted by the National Center for
    Education Statistics (NCES). NCES collects, analyzes, and disseminates
    statistics on education at all levels, from preschool through
    postsecondary and adult education, including statistics on international
    education activities.

        Assessment.--Funds support the National Assessment of Educational
    Progress (NAEP). NAEP administers assessments to samples of students in
    order to gather reliable information about educational attainment in
    important academic areas. Funds support collection and reporting of
    national, State, and long-term trend information, including the conduct
    of biennial State NAEP in reading and mathematics at grades 4 and 8.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-2-1-503      2001 actual   2002 est.   2003 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
    24.0    Printing and reproduction.......                                   2
    25.1    Advisory and assistance services                                   2
    25.2    Other services..................                                 167
    25.3    Other purchases of goods and
              services from Government
              accounts......................                                  36
    25.5    Research and development
              contracts.....................                                  98
    25.7    Operation and maintenance of
              equipment.....................                                   6
    31.0    Equipment.......................                                   2
    41.0    Grants, subsidies, and
              contributions.................                                 118
                                               ---------   ---------  ----------
    99.0      Direct obligations............                                 433
    99.0  Reimbursable obligations..........                                   5
                                               ---------   ---------  ----------
    99.9    Total new obligations...........                                 438
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1100-2-1-503      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......                                  15
    ---------------------------------------------------------------------------

                             DEPARTMENTAL MANAGEMENT

                                  Federal Funds

    General and special funds:

                             Program Administration

        For carrying out, to the extent not otherwise provided, the
    Department of Education Organization Act, including rental of conference
    rooms in the District of Columbia and hire of [two] three passenger
    motor vehicles, [$424,212,000] $423,291,000, of which $12,795,000, to
    remain available until expended, shall be for building alterations and
    related expenses for the modernization of the Mary E. Switzer Building
    in Washington, D.C. (Department of Education Appropriations Act, 2002;
    additional authorizing legislation required.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Program administration............         423         434         423
    09.01 Reimbursable program..............           2           2           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         425         436         425
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         425         436         425
    23.95 Total new obligations.............        -425        -436        -425
    23.98 Unobligated balance expiring or
            withdrawn.......................          -1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         424         435         423
    40.71   Reduction pursuant to P.L. 107-
              116...........................                      -1
    40.75   Reduction pursuant to P.L. 106-
              554 (Labor/HHS)...............          -1
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         423         434         423
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           2           2           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         425         436         425
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         151         133         116
    73.10 Total new obligations.............         425         436         425
    73.20 Total outlays (gross).............        -449        -453        -410
    73.40 Adjustments in expired accounts
            (net)...........................           6
    74.40 Obligated balance, end of year....         133         116         130
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         328         336         325
    86.93 Outlays from discretionary
            balances........................         120         117          85
    86.98 Outlays from mandatory balances...           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         449         453         410
    ----------------------------------------------------------------------------

        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..................         423         434         423
    90.00 Outlays...........................         447         451         408
    ---------------------------------------------------------------------------

      Budget Authority and Outlays Excluding Full Funding for Federal Retiree
                           Costs (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         412         423         412
    90.00 Outlays...........................         436         440         397
    ---------------------------------------------------------------------------

        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, and
    programs for persons with disabilities. 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; telecommunications; 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; personnel security; budget formulation and
    execution; program evaluation; legal services; congressional and public
    relations; and intergovernmental affairs.

        Included in this account is the Department of Education's portion of
    costs to modernize the Mary E. Switzer building, including costs for
    building renovations, furniture, information technology equipment and
    services, and telecommunications, to remain available until expended.
    The additional funds required for the modernization will be provided by
    the General Services Administration. This account also provided funds
    for the renovation of the Department's main headquarters building which
    was completed in 1998.

    [[Page 381]]

        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.

        Note.--Excludes $54 million in budget authority in 2003 for
    activities transferred to the Student Aid Administration account.
    Comparable amounts for 2001 ($58 million) and 2002 ($59 million) are
    included above.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         164         193         183
    11.3      Other than full-time permanent          20          10          10
    11.5      Other personnel compensation..           5           5           4
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         189         208         197
    12.1    Civilian personnel benefits.....          50          56          55
    21.0    Travel and transportation of
              persons.......................           6           5           6
    23.1    Rental payments to GSA..........          34          35          32
    23.3    Communications, utilities, and
              miscellaneous charges.........          12          14          15
    24.0    Printing and reproduction.......           2           3           3
    25.1    Advisory and assistance services           6           4           5
    25.2    Other services..................          21          21          20
    25.3    Other purchases of goods and
              services from Government
              accounts......................          11           8           8
    25.7    Operation and maintenance of
              equipment.....................          76          66          60
    26.0    Supplies and materials..........           2           3           3
    31.0    Equipment.......................          11           9          16
    32.0    Land and structures.............           2           2           3
                                               ---------   ---------  ----------
    99.0      Direct obligations............         422         434         423
    99.0  Reimbursable obligations..........           2           2           2
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         425         436         425
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......       2,581       2,709       2,476
    ---------------------------------------------------------------------------

                             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, [$79,934,000] $89,710,000. (Department of Education Appropriations
    Act, 2002; additional authorizing legislation required.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Civil rights......................          79          83          89
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          79          83          89
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          79          83          89
    23.95 Total new obligations.............         -79         -83         -89
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          79          83          89
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          23          17          15
    73.10 Total new obligations.............          79          83          89
    73.20 Total outlays (gross).............         -83         -85         -86
    73.40 Adjustments in expired accounts
            (net)...........................          -1
    74.40 Obligated balance, end of year....          17          15          18
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          67          70          73
    86.93 Outlays from discretionary
            balances........................          16          15          12
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          83          85          86
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          79          83          89
    90.00 Outlays...........................          83          85          86
    ---------------------------------------------------------------------------

      Budget Authority and Outlays Excluding Full Funding for Federal Retiree
                           Costs (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          76          80          86
    90.00 Outlays...........................          80          82          83
    ---------------------------------------------------------------------------

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

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          44          48          49
    11.3      Other than full-time permanent           2           2           2
                                               ---------   ---------  ----------
    11.9        Total personnel compensation          46          50          51
    12.1    Civilian personnel benefits.....          13          14          15
    21.0    Travel and transportation of
              persons.......................           1           1           1
    23.1    Rental payments to GSA..........           6           6           6
    23.3    Communications, utilities, and
              miscellaneous charges.........           2           2           2
    25.2    Other services..................           2           1           1
    25.3    Other purchases of goods and
              services from Government
              accounts......................           2           1           1
    25.7    Operation and maintenance of
              equipment.....................                       5           8
    31.0    Equipment.......................           6           2           3
                                               ---------   ---------  ----------
    99.0      Direct obligations............          78          82          88
    99.5  Below reporting threshold.........           1           1           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          79          83          89
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         696         718         714
    ---------------------------------------------------------------------------

                         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, [$38,720,000] $42,361,000. (Department of Education Appropriations
    Act, 2002; additional authorizing legislation required.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Inspector General.................          37          40          42
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          37          40          42
    ----------------------------------------------------------------------------

    [[Page 382]]

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          37          40          42
    23.95 Total new obligations.............         -37         -40         -42
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          37          40          42
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          10           9          10
    73.10 Total new obligations.............          37          40          42
    73.20 Total outlays (gross).............         -37         -39         -39
    73.40 Adjustments in expired accounts
            (net)...........................          -1
    74.40 Obligated balance, end of year....           9          10          13
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          31          33          34
    86.93 Outlays from discretionary
            balances........................           6           8           6
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          37          39          39
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          37          40          42
    90.00 Outlays...........................          37          39          39
    ---------------------------------------------------------------------------

      Budget Authority and Outlays Excluding Full Funding for Federal Retiree
                           Costs (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          36          39          41
    90.00 Outlays...........................          36          38          38
    ---------------------------------------------------------------------------

        The Inspector General is responsible for the quality, coverage, and
    coordination of audit and investigation 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      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          17          20          21
    11.3    Other than full-time permanent..           1           1           1
    11.5    Other personnel compensation....           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          19          21          22
    12.1  Civilian personnel benefits.......           6           6           6
    21.0  Travel and transportation of
            persons.........................           2           2           2
    23.1  Rental payments to GSA............           2           3           3
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           1           1
    25.1  Advisory and assistance services..           2           2           2
    25.2  Other services....................           1           1           1
    25.3  Other purchases of goods and
            services from Government
            accounts........................           1           1           2
    25.7  Operation and maintenance of
            equipment.......................           2           2           2
    31.0  Equipment.........................           1           1           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          37          40          42
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      2001 actual   2002 est.   2003 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         275         285         285
    ---------------------------------------------------------------------------

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2001 actual   2002 est.   2003 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..........................          62          50          50
                                               ---------   ---------  ----------
    General Fund Offsetting receipts from
     the public.............................          64          50          50
    ---------------------------------------------------------------------------

                               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] 3 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] 10 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. (a) Section 1543(a) of the Higher Education Amendments of
    1992 (20 U.S.C. 1070 note) is amended by striking paragraph (2) and
    inserting the following:
            ``(2) Award determination.--The amount of the financial
        assistance provided to an athlete described in paragraph (1) shall
        be determined in accordance with criteria, and in amounts, specified
        in the application of the center under subsection (c). Such
        assistance shall not exceed the athlete's cost of attendance as
        determined under section 472 of the Higher Education Act of 1965 (20
        U.S.C. 1087ll).
            ``(3) Information on distribution of assistance.--Each center
        providing such assistance shall annually report to the Secretary
        such information as the Secretary may reasonably require on the
        distribution of such assistance among athletes and institutions of
        higher education. The Secretary shall compile such reports and
        submit them to the Committees on Education and the Workforce and
        Appropriations of the House of Representatives and the Committees on
        Health, Education, Labor, and Pensions and Appropriations of the
        Senate.''.
        (b) The amendments made by subsection (a) shall apply with respect
    to any funds appropriated pursuant to section 1543(d) of the Higher
    Education Amendments of 1992, including funds appropriated pursuant to
    that section in fiscal years 2000 and 2001, that are

    [[Page 383]]

    available for financial assistance under section 1543 on or after the
    date of enactment of this Act.]
        [Sec. 306. (a) Notwithstanding sections 413D, 442, and 488 of the
    Higher Education Act of 1965, the Secretary of Education may reallocate,
    from funds made available under the heading ``Student Financial
    Assistance'' to carry out part C of title IV of that Act, excess
    allocations for fiscal year 2002 in an amount not to exceed $1,000,000
    in the aggregate to institutions of higher education described in
    subsection (b) for the purposes described in subsection (c). The
    reallocation to each such institution shall be made in accordance with
    subsection (d). Such excess allocations shall remain available for
    obligation until March 31, 2004.
        (b) An institution of higher education may receive a reallocation
    under subsection (a) if the institution--
            (1) is, on the date of enactment of this Act, participating in
        the Federal Supplemental Educational Opportunity Grant and Federal
        Work Study programs under subpart 3 of part A, and part C of title
        IV of that Act, respectively;
            (2) initially began participating in both such programs during
        or after 1989, but not later than 1999;
            (3) has a current enrollment of not less than 2,000 students;
            (4) provides educational programs for which the institution
        awards baccalaureate and graduate degrees;
            (5) has experienced an actual enrollment increase of 75 percent
        or more since the institution began participating in such programs;
        and
            (6) charged, for academic year 2000-2001, in-State tuition and
        fees for a full-time undergraduate student that were less than such
        tuition and fees charged by the institution for academic year 1998-
        1999.
        (c) An institution of higher education that receives a reallocation
    under subsection (a) may use that reallocation for Federal Supplemental
    Educational Opportunity Grants or Federal Work Study awards.
        (d)(1) A reallocation made under subsection (a) to an institution
    described in subsection (b) shall be determined by calculating the
    difference between--
            (A) the amount (commonly referred to as the ``base guarantee'')
        that the institution received under section 413D(a) or 442(a) of
        that Act, as the case may be; and
            (B) the amount that the institution would receive pursuant to
        section 413D(a)(2)(B)(ii) or 442(a)(2)(B)(ii) of that Act, as the
        case may be, if the institution were beginning its program
        participation in the 2002-2003 academic year.
        (2) If the amounts available for reallocation under subsection (a)
    are insufficient to fully fund the amounts determined under paragraph
    (1) of this subsection to each institution described in subsection (b),
    then the amount to be reallocated to each such institution shall be
    ratably reduced.
        (e) The Secretary may use such data as he determines appropriate in
    order to carry out this section.]
        [Sec. 307. If this Act is enacted before H.R. 1, the No Child Left
    Behind Act of 2001, is enacted, then references to the Elementary and
    Secondary Education Act of 1965 or to any other Acts that would be
    amended by H.R. 1 shall be read to be references to those Acts as they
    would be amended by H.R. 1 (including amendments made by H. Con. Res.
    289, as passed by the House and the Senate).]
        Sec. 305. (a) Discretionary Funding.--Section 458(a)(1) of the
    Higher Education Act of 1965 (20 U.S.C. 1087h(a)(1)), is amended--
            (1) in the matter preceding subparagraph (A), by striking
        ``there shall be available to the Secretary, from funds not
        otherwise appropriated, funds to be obligated for--'' and inserting
        in lieu thereof, ``there are authorized to be appropriated to carry
        out this section such sums as may be necessary, for--''; and
            (2) in the flush language at the end thereof,
                (A) by striking ``such'';
                (B) by inserting ``and'' after ``2001,'' and
                (C) by striking ``, and $795,000,000 in fiscal year 2003''.
        (b) Effective Date.--The amendments made by subsection (a) shall be
    effective beginning in fiscal year 2003.
        Sec. 306. Section 1202 of the Elementary and Secondary Education Act
    of 1965 is amended by inserting the following subsection at the end
    thereof:
        ``(g) Supplement, not Supplant.--State or local educational agency
    shall use funds received under this subpart only to supplement the level
    of non-Federal funds that, in the absence of funds under this subpart,
    would be expended for activities authorized under this subpart, and not
    to supplant those non-Federal funds.''. (Department of Education
    Appropriations Act, 2002.)