Peace Corps: Status of the Educational Assistance Grants Demonstration
Program (Letter Report, 02/25/94, GAO/NSIAD-94-89).

More than three years have passed since the enactment of legislation
encouraging a demonstration program that would give minority students
financial aid in exchange for future Peace Corps service, but the
program has yet to be fully implemented.  As of January 1994, nine
colleges and universities have agreed to participate, but no student has
been awarded a grant.  In GAO's view, it is too soon to tell whether the
program will achieve its goals.  Concerns have been raised by some
university officials about the small size of the grants being awarded
and the lack of Peace Corps visibility and presence on campuses to
promote the program.  School officials said that other student aid
programs may be more attractive.

--------------------------- Indexing Terms -----------------------------

     TITLE:  Peace Corps: Status of the Educational Assistance Grants 
             Demonstration Program
      DATE:  02/25/94
   SUBJECT:  Personnel recruiting
             College students
             Americans employed abroad
             International relations
             Volunteer services
             Student financial aid
             Educational grants
             Interagency relations
IDENTIFIER:  Peace Corps Educational Assistance Grant
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================================================================ COVER

Report to Congressional Committees

February 1994



Peace Corps

=============================================================== ABBREV

=============================================================== LETTER


February 25, 1994

The Honorable Edward M.  Kennedy
The Honorable Nancy L.  Kassebaum
Ranking Minority Member
Committee on Labor and Human Resources
United States Senate

The Honorable William D.  Ford
The Honorable William F.  Goodling
Ranking Minority Member
Committee on Education and Labor
House of Representatives

The National and Community Service Act of 1990 (P.  L.  101-610),
enacted in November 1990, authorized the establishment of a program
for minority students to receive financial assistance grants in
preparation and exchange for Peace Corps service.\1 The act
established the Commission on National and Community Service,\2 and,
among other things, authorized it to make grants to carry out the
program.  The act required us to evaluate this program and report to
the appropriate committees 3 years after passage of the act. 

\1 The Peace Corps has had difficulty in the past recruiting minority
volunteers.  See Peace Corps:  Meeting the Challenges of the 1990s
(GAO/NSIAD-90-122, May 18, 1990) and Peace Corps:  Progress in
Minority Representation (GAO/NSIAD-92-76, Jan.  13, 1992). 

\2 The Corporation for National and Community Service, established
under the National and Community Service Trust Act of 1993, P.L. 
103-82, succeeded and replaced the Commission on National and
Community Service. 

------------------------------------------------------------ Letter :1

One of the goals of Public Law 101-610 was to enable young Americans
of minority ethnicity to make a commitment to service in the Peace
Corps by removing barriers created by the costs of higher education,
loan indebtedness, and the cost of housing.  The act limited
eligibility for the program to individuals who (1) had completed at
least 2 years of satisfactory study at an institution of higher
education, were enrolled in a 4-year program culminating in a
bachelor's degree, and who could complete the program within 2 years;
(2) agreed upon graduation to serve a tour of 2 years as a Peace
Corps volunteer; and (3) were selected through a competitive process
established by the Peace Corps.  The act limited participation in the
demonstration program to not more than
50 individuals. 

The Commission and the Peace Corps reached agreement in February 1993
on a $100,000 demonstration program in which (1) a number of
predominantly minority colleges and universities would receive funds
to assist in recruiting and nominating qualified students for Peace
Corps educational assistance grants and (2) educational assistance
would be provided to up to 50 eligible junior and senior minority
students from these institutions in exchange for Peace Corps
volunteer service.  A June 1993 addendum to the February agreement
set the amount of the student grants at $1,000 per year, as proposed
in the Peace Corps' January 1992 concept paper. 

------------------------------------------------------------ Letter :2

More than 3 years have passed since the enactment of the legislation
calling for a demonstration program for minority students to receive
financial assistance in exchange for future Peace Corps service, but
the demonstration program has not yet been fully implemented.  As of
January 1994, nine colleges and universities had agreed to
participate in the program; however, no students had been awarded
grants.  Officials of the Commission on National and Community
Service said the Peace Corps' program was given relatively lower
priority because it was smaller than many of the other programs
authorized by the legislation.  Peace Corps officials said that the
demonstration program could not be considered one of its
high-priority programs given the funding level for the program. 

It is too early to tell whether the program the Peace Corps has
designed will be effective in accomplishing its purposes.  However,
concerns have been raised by some university officials.  Officials at
several schools targeted to participate in the program told us that
in their opinion, the $5,000 institutional grants and the $1,000-per
year student grants were too small, and that the Peace Corps needed
to increase its visibility and presence on their campuses to help
promote the program.  We did not determine what size the
institutional and student grants should be; however, school officials
indicated that other available student aid programs may be more
attractive.  Although the Commission had allocated $200,000 for the
first year of the Peace Corps' program in March 1992, the Peace Corps
chose initially to accept only $100,000 because it said it was
already spending $11 million to recruit volunteers. 

------------------------------------------------------------ Letter :3

Several factors contributed to the slow progress in implementing the
demonstration program at the Peace Corps, including (1) not
establishing the Commission's operational structure until 10 months
after the legislation was enacted, (2) extended negotiations between
the Commission and the Peace Corps, and (3) a longer than anticipated
start-up period at the Peace Corps.  The Peace Corps initially
expected to have the program operational, with institution and
student grants awarded, during the 1993 fall semester.  However,
Peace Corps officials now do not expect the program to be fully
operational until mid-1994--almost 4 years after the legislation's
passage.  It will be at least another year after that before any
student enters the Peace Corps under this program. 

Delays have occurred at both the Commission and the Peace Corps. 
Commission members were not appointed until September 1991, the
Executive Director was not selected until October 1991, and the
Commission's regulations were not adopted until February 1992.  The
Commission, therefore, was not yet fully operational when the Peace
Corps submitted its initial program proposal in a concept paper in
January 1992.  (The Peace Corps initially requested program funding
information from the Commission in November 1991, but was told to
submit a program proposal in early 1992.) The Commission considered
the proposal at its June 1992 meeting, and according to the
Commission, it approved the Peace Corps' project at that time.  A
formal memorandum of understanding was signed on February 3, 1993,
setting forth the program objectives, responsibilities, funding, and
duration.  Program funding became available in March 1993 when the
Commission approved and obligated $100,000 in fiscal year 1993 funds,
the amount requested by the Peace Corps.  More specific objectives
and program guidelines, including the amount of the educational
assistance grants to students, were included in an addendum dated
June 9, 1993. 

The absence of a program officer at the Commission contributed to the
program's slow implementation.  The program began gaining momentum in
January 1993 after the Commission hired a consultant to, among other
things, oversee the program.  Commission officials acknowledged that
they had given higher priority to the higher dollar value programs
mandated by the legislation, and relatively less urgency to lower
dollar value (under $1 million) programs such as the Peace Corps

The Peace Corps program implementation hinges on the participation of
selected colleges and universities.  However, in most cases, the
Peace Corps did not contact the targeted institutions until July
1993, about
18 months after it submitted its proposal to the Commission, and 5
months after the memorandum of understanding with the commission was
signed.  The Peace Corps' plan at that time was for the institutions
to submit proposals for participation in the program by August 31,
1993; to review, evaluate, and approve the proposals; and to notify
the selected institutions and nominated students of grant awards by
January 1994.  By September 1993, only three institutions had
responded to the Peace Corps' invitation to participate in the
program, and one additional university had submitted an unsolicited
proposal.  Between September 1993 and January 1994, agreements with
five additional schools were reached, but no student grants had been

------------------------------------------------------------ Letter :4

The program, as designed, would consist of (1) grants to 8 to 10
predominantly minority colleges and universities to assist the Peace
Corps in carrying out the program and (2) educational assistance
grants to up to 50 qualified undergraduate students. 

Among other things, the program is to provide grants of up to $5,000
to selected colleges and universities, based on proposals submitted
by the institutions and approved by the Peace Corps.  The program
targets mainly Historically Black Colleges and Universities and
institutions among the Hispanic Association of Colleges and
Universities.  Participating institutions must agree to aid the Peace
Corps in recruiting by

  promoting awareness of the Peace Corps and volunteer service

  identifying and recommending to prospective volunteers courses for
     which the Peace Corps has a special need,

  referring at least five qualified grant applicants from
     underrepresented groups, and

  submitting periodic progress reports to the Peace Corps. 

The 10 primary and 6 alternate colleges and universities targeted for
the program were selected from among 92 Historically Black Colleges
and Universities, 25 members of the Hispanic Association of Colleges
and Universities, and other institutions with high populations of
underrepresented groups.\3 The institutions were targeted for
consideration on the basis of the extent to which their courses and
degree awards matched the special needs of the Peace Corps and on
their commitment to implementing the program.  Peace Corps officials
15 area recruiting offices recommended institutions in their areas. 
Such recommendations were important considerations in making the
final selections. 

The Peace Corp plan proposed awarding annual $1,000 educational
assistance grants to up to 50 eligible undergraduate students who
agree to participate in the program and upon graduation
satisfactorily complete volunteer tours in the Peace Corps.  Grant
recipients must be junior or senior students from a participating
college or university.  If the $1,000 grant was awarded for a
student's junior year, the student would be eligible for a second
$1,000 grant for his or her senior year.  Selection criteria limits
grant recipients to enrolled students who are

  from traditionally underrepresented groups;

  recommended by their institutions based on interest in Peace Corps
     service, specialized courses taken, and financial needs; and

  expected to possess needed special skills. 

The program includes provision for the Peace Corps to recoup funds
from grant recipients who fail to either complete their educational
program or their tour of volunteer service.  Decisions regarding
waiver of repayment of defaulted grant monies will be made on a
case-by-case basis by the Director of the Peace Corps. 

The Commission notified the Peace Corps in March 1993 that funds were
available for immediate transfer to implement the demonstration
program.  The Commission had allocated $200,000 for the program for
fiscal year 1993; however, the Peace Corps proposed to use and
accepted only $100,000.  Because grants were not awarded in fiscal
year 1993, the Peace Corps carried the $100,000 over to fiscal year
1994.  In September 1993, the Commission approved an additional
$100,000 to continue the Peace Corps program into fiscal year 1995. 

In explaining the rationale for its proposed $100,000 program, the
Acting Peace Corps Director told the Commission that $11 million of
its annual budget was already being spent to recruit volunteers and
that many more applicants were applying than could be accepted for
volunteer service.  The Acting Director also pointed out that the
Peace Corps had made significant progress between 1990 and 1992 in
recruiting minority volunteers, increasing its minority
representation from 7 percent to 13 percent during the period. 

\3 The primary and alternate institutions are listed in appendix I. 
The Peace Corps defined traditionally underrepresented groups as
African-Americans, Hispanic Americans, Asian and Pacific Islanders,
and American Indians. 

------------------------------------------------------------ Letter :5

To obtain the universities' perspectives on the Peace Corps' program
proposal, we contacted officials at eight colleges and universities
targeted by the Peace Corps, as well as an official from the
institution that submitted an unsolicited proposal.  The officials
expressed several concerns about the program, including its tight
implementation schedule and limited funding.  They also commented on
the Peace Corps' limited presence and visibility on their campuses. 
Several officials noted that the Peace Corps' proposals were received
during the summer, when faculty and staff levels were significantly
lower than when classes were in session, making it difficult to meet
the August 31, 1993, response date. 

Officials at five of the nine institutions said the $5,000 grant was
too small to cover the activities and expenses involved in
administering the program, and would have to be supplemented from
other university resources.  Officials at six institutions said the
$1,000-per year student grants may be too small to induce students to
participate in the program.  Most of the officials told us that the
Peace Corps needs to increase its visibility and presence on their
campuses if sustained, increased minority recruitment is to be
achieved.  They said increased Peace Corps recruitment efforts and
greater visibility on campus would help them promote the program. 

------------------------------------------------------------ Letter :6

The Commission (now the Corporation for National and Community
Service) agreed with the facts presented in our report, and stated
that the Peace Corps demonstration program was not implemented as
quickly as other programs authorized by the National and Community
Service Act of 1990.  However, the Commission asserted that progress
in implementing the program had not been slow. 

The Peace Corps stated that it was not responsible for any of the
delays in program implementation, and said it could have done nothing
to implement the program more rapidly.  It further stated that the
program as designed will meet the goals of the act.  We believe that
delays at both the Commission and the Peace Corps have contributed to
the slow implementation, and more than 3 years after enactment of the
legislation, the program had not progressed to a point where any
meaningful assessment of the program could be made. 

------------------------------------------------------------ Letter :7

In conducting our review, we reviewed pertinent legislation, source
documents, and files on the Peace Corps preparatory grant recruitment
program.  We interviewed Peace Corps, Commission on National and
Community Service, and Department of Education officials in
Washington, D.C., and selected college and university officials, and
reviewed documents regarding funding, planning, development, and
implementation of the program.  Our review did not include
determining what sizes the institution and student grants to be
awarded under the program would need to be to induce appropriate

We conducted our review between June 1993 and January 1994 in
accordance with generally accepted government auditing standards. 
The Corporation for National and Community Service and the Peace
Corps provided written comments on a draft of this report.  Their
comments are reprinted in appendixes II and III, respectively. 

---------------------------------------------------------- Letter :7.1

We are sending copies of this report to the Chairmen, Senate and
House Committees on Appropriations, Senate Committee on Foreign
Relations, and House Committee on Foreign Affairs; the Director of
the Peace Corps; the Chief Executive Officer of the Corporation for
National and Community Service; and the Director of the Office of
Management and Budget.  We will also make copies available to others
upon request. 

If you have any questions or need additional information, please call
me at (202) 512-4128.  Major contributors to this report were David
R.  Martin, Assistant Director, and Wyley Neal, Evaluator-in-Charge. 

Joseph E.  Kelley
International Affairs Issues

=========================================================== Appendix I

--------------------------------------------------------- Appendix I:1

Alabama A&M, Normal, Alabama
California State Polytechnic University, Pomona, California
Central State University, Wilberforce, Ohio
Delaware State College, Dover, Delaware
Florida International University, Miami, Florida
Herbert A.  Lehman College, Bronx, New York\2
New Mexico Highlands University, Las Vegas, New Mexico
North Carolina A&T, Greensboro, North Carolina
Southern University, Baton Rouge, Louisiana

Note:  One of 10 primary universities and colleges was deleted by the
Peace Corps after we found that it did not meet the Peace Corps'
selection criteria. 

\2 Lehman College was replaced by Rutgers University, New Brunswick,
New Jersey. 

--------------------------------------------------------- Appendix I:2

Atlanta University Complex, includes Clark Atlanta University,
 Morehouse College, Morris Brown University, and Spelman College,
 Atlanta, Georgia
Florida A&M University, Tallahassee, Florida
Paul Quinn College, Dallas, Texas
Prairie View A&M University, Prairie View, Texas
Texas Southern University, Houston, Texas
Tuskegee University, Tuskegee, Alabama

(See figure in printed edition.)Appendix II
=========================================================== Appendix I

(See figure in printed edition.)


1.  While time frames were not specified in the November 1990
legislation, Congress clearly expected the program to be far enough
along by October 1993 for us to evaluate its effectiveness.  As
discussed in this report, program implementation still has not
progressed to the point where any meaningful evaluation can be made. 
Therefore, we believe "slow progress" is an apt characterization. 
Nevertheless, we have modified the title of the report to overcome
the concerns as to which entity was most responsible for the delays. 

2.  Although the Commission approved in principle a demonstration
program for the Peace Corps, it should be noted that final agreement
on the program was not reached until 1 year later in June 1993. 

(See figure in printed edition.)Appendix III
=========================================================== Appendix I

(See figure in printed edition.)

(See figure in printed edition.)

(See figure in printed edition.)

(See figure in printed edition.)

3 and 6. 

(See figure in printed edition.)

The following are GAO's comments on the Peace Corps' letter dated
January 4, 1994. 


1.  Our report clearly shows that the Commission shares in the
culpability for the slow start.  Nevertheless, documentary evidence
provided by the Peace Corps shows that it submitted the demonstration
program concept paper to the Commission on January 8, 1992, and
followed up with its tentative plan for the demonstration program in
March 1992.  By June 1992, the Commission had approved the Peace
Corps' proposal in principle, and by September 1992, had allocated
$200,000 for the Peace Corps' demonstration program.  While the
legislation did not specify a time frame within which Congress
expected the program to be implemented, Congress clearly expected the
program to be far enough along for us to evaluate its effectiveness
by October 1993.  As stated in this report, no minority student had
received any financial assistance more than 3 years after the
legislation was enacted.  It is still too early to tell whether the
program will be effective in increasing the number of minority
volunteers in the Peace Corps. 

2.  We agree that it remains to be seen whether the Peace Corps'
decision on the program design was correct.  However, we believe that
concerns raised by a number of college and university administrators,
who regularly deal with student aid programs, should not be
offhandedly dismissed.  They represent a key to the success of the
program as the Peace Corps has designed the program. 

3.  Agreements with five of the nine colleges and universities were
finalized between late September 1993 and January 1994. 

4.  Evaluating the Peace Corps' minority recruitment program was
beyond the scope of this review, and we have deleted these
observations from our final report. 

5.  We believe the Peace Corps did not have to wait until the May to
July 1993 time frame to begin contacting schools.  It should be
remembered that (1) the legislation was enacted in November 1990 and
(2) the Commission agreed in principle to the program in June 1992. 

6.  These matters have been considered and are discussed in our
report as appropriate. 

7.  According to a transcript of the Commission's proceedings, the
Acting Director of the Peace Corps made this connection in discussing
the Peace Corps program with the Commission on March 30, 1992. 

8.  The Peace Corps' letter dated July 12, 1993, to the universities
states that grants were expected to be awarded to students for the
spring 1994 term by January 1, 1994.  However, as indicated in this
report, delays in program implementation had already occurred before
the schedule was established.