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Mr. Chairman and Members of the Subcommittee:
I am pleased to appear before you today to discuss our fiscal year 2000 budget request in support of the Department of Education's continuing investment in postsecondary education.
We are proposing a fiscal year 2000 budget that builds upon changes enacted in the Higher Education Amendments of 1998 and reflects President Clinton's continuing commitment to access for all Americans to quality postsecondary education and lifelong learning. We have made great strides in opening the doors of college to everyone who has the desire and the preparation to attend. This year's budget strengthens our investment in college opportunity with significant increases in Pell Grants, expanded support for Work-Study, and lower borrowing costs to students. Our fiscal year 2000 budget also would improve college-attendance and college-completion rates among disadvantaged and low-income students as well as foster innovation and improvement by increasing support for important new programs like GEAR UP, Preparing for College, College Completion Challenge Grants, and Teacher Quality Enhancement Grants.
In our fiscal year 2000 budget, we are requesting a total of $7.46 billion in budget authority for the Pell Grant program. This assumes a projected funding surplus of $449 million. The total - $7.9 billion - would enable us to increase the Pell Grant maximum to $3,250, a $125 increase over fiscal year 1999, and serve nearly 3.9 million needy students. We are proposing to increase the Supplemental Educational Opportunity Grant program by $12 million, for a total of $631 million. Our budget request also includes a $64 million increase in Work-Study - for a total of $934 million - to provide 1 million students with the opportunity to work their way through college. The President encourages institutions to use Work-Study funds to promote community service activities, particularly tutoring children in reading and mathematics, and serving in family literacy programs.
An estimated 6.2 million students or their parents will borrow approximately $41 billion through the Federal student loan programs in fiscal year 2000. The Administration's proposals for these programs build on changes made in the Higher Education Amendments of 1998 and are designed to reduce borrower costs, and to produce greater program savings. The specific proposals include: (1) extending the current lower interest rate for Direct Consolidation Loans through the end of fiscal year 2000; (2) reducing the percentage of default collections that guaranty agencies may retain from the current 24 percent to 18.5 percent; (3) extending Department access to the National Directory of New Hires to aid in the collection of defaulted student loans; (4) recalling an additional $1.6 billion in reserve funds held by guaranty agencies and accelerating the recall of $165 million in Federal reserves into 1999 and 2000; and (5) reducing interest subsidy payments to tax exempt lenders from 50 basis points to 20 basis points for loans funded through tax-exempt securities. In mandatory programs, the Administration's proposals would produce savings estimated at $2.3 billion in fiscal year 2000 and $4.6 billion over five years.
The Higher Education Amendments of 1998 created the Federal government's first ever Performance-Based Organization (PBO) to modernize the delivery of student financial aid. On December 8, Mr. Greg Woods was sworn in as Chief Operating Officer of the PBO. In his testimony Mr. Woods will discuss his plans to transform the Office of Student Financial Assistance Programs (OSFAP) into a high performing organization that delivers top quality customer service.
Access and Completion
Access to quality postsecondary education continues to be the primary objective of OPE. Research shows that in spite of the availability of student financial assistance, the rates at which minority, low-income, and other disadvantaged students enroll in and complete postsecondary education programs continues to be far lower than those of other students. Our 2000 budget request would increase the college-attendance and college-completion rates for disadvantaged and low-income students by increasing support for the GEAR UP and TRIO programs and by establishing a new College Completion Challenge Grants initiative.
We are very excited about the new GEAR UP program's capacity to help greater numbers of low-income and disadvantaged students prepare for college. It has great potential to improve the curricula and standards of the middle schools and high schools in high-poverty areas. In fiscal year 2000, we are proposing to double the funding for this program - for a total of $240 million - to increase comprehensive mentoring, counseling, outreach, and support services to an estimated 381,000 students in close to 1,000 high-poverty middle schools.
The Federal TRIO programs are among our most effective means of helping disadvantaged students prepare for, and succeed in, college. In fiscal year 2000 we are seeking a $30 million increase for TRIO - 5 percent over fiscal year 1999 - for a total of $630 million. The additional funds would enable us to expand the benefits of TRIO to other disadvantaged students and prepare a greater number of disadvantaged and underrepresented students for graduate and professional education.
In fiscal year 2000 we are requesting $35 million for a new College Completion Challenge Grants program. This initiative complements and extends GEAR UP and TRIO services by providing competitive discretionary grants to institutions of higher education to help increase the retention and completion rates of students at risk of dropping out. Institutions could use the grants for pre-college intensive summer programs, additional grant support, and stronger student support services, and would target efforts on the first two years of study.
To further complement our investment in GEAR UP and TRIO, the Administration is requesting $15 million for a new initiative, Preparing for College. This program would provide information on the importance of higher education and on preparing for college to middle and high school students and their parents - particularly those from high poverty areas.
To ensure that disadvantaged students receive the support they need to succeed, we are proposing to increase assistance to institutions that serve large numbers of these students. Our fiscal year 2000 budget request of $259.8 million for Title III would support large increases for Historically Black Colleges and Universities, Historically Black Graduate Institutions, Tribally Controlled Colleges and Universities, and the Minority Science and Engineering Improvement programs. We are also requesting an increase of $5 million for Howard University. In addition, our $42.25 million request for the Developing Hispanic-Serving Institutions (HSIs) program (Title V under the Higher Education Amendments of 1998) is a 50 percent increase over fiscal year 1999 funding for HSIs and supports the Administration's commitment to increasing educational opportunities for the nation's fastest growing minority population.
The Administration is also requesting $17 million for a new initiative that would significantly expand the choices in postsecondary education to residents of the District of Columbia (D.C.). Under this initiative, the Federal government would pay the difference between in-state and out-of-state tuition to all public institutions of higher education in Maryland and Virginia on behalf of D.C. residents. The initiative would also provide grants to D.C. residents who choose to attend private colleges in the District of Columbia. This program would provide D.C. residents with access to a wide spectrum of educational institutions and programs, and it would complement private sector efforts such as the D.C. College Access Program, to ensure that all students have equal opportunity.
Innovation and Improvement
OPE also has a responsibility to foster innovations that respond to national concerns and to encourage qualitative improvement in postsecondary education. In fiscal year 2000 we are requesting an increase of $40 million - a total of $115 million - for the new Teacher Quality Enhancement Grants program. Over the next decade America's schools will need to hire more than 2 million teachers to deal with record-breaking enrollments and teacher retirements at a time when we are promoting more challenging standards for all students. Increasing our investment in teacher recruitment, preparation and support is essential if our nation's schools are to have the high-quality teaching force they will need in the 21st century. To complement this investment, the Department is also requesting $75 million for the Teacher Training in Technology initiative under the Elementary and Secondary Education Act. Although funding for this program is not included in the OPE budget request, OPE manages this program to help ensure that all teachers are able to use technology effectively.
In fiscal year 2000 we are requesting $27.5 million for the Fund for the Improvement of Postsecondary Education (FIPSE) to support projects that address innovative reform, qualitative improvement, and cost containment in postsecondary education. The competitive nature of this program continues to ensure that American higher education is of the highest quality.
To ensure access to high quality learning that is not limited by time or place, the Higher Education Amendments of 1998 authorized the Learning Anytime Anywhere Partnerships (LAAP) to take advantage of advances in technology for the delivery of education. By supporting the development and assessment of new nationally significant "anytime anywhere" distance learning programs, and by stimulating cooperation and resource sharing among colleges, industries, and other stakeholders, LAAP is helping to make high quality life-long learning a real possibility for more Americans, particularly those who are underserved. Our fiscal year 2000 request would double the funding for this program for a total of $20 million to support a new competition and to continue funding projects initiated in fiscal year 1999.
Our fiscal year 2000 budget includes increases for programs that encourage academic excellence. To ensure that we maintain the foreign language and world-area expertise for America's international leadership role and to prepare all Americans for the 21st century, the Administration is proposing to increase support for Domestic and Overseas International Education by $1.5 million -for a total of $68 million. The Administration is also requesting $39.9 million for the Byrd Honors Scholarship program to fund a larger cohort of first-year students in 2000, and $41 million to foster advanced study in disciplines that are important to our national well being through the Graduate Assistance in Areas of National Need (GAANN) and the Jacob K. Javits Fellowship programs.
The Administration is requesting $4 million for studies to obtain the data needed to measure progress on Higher Education Act program indicators as required by GPRA. These funds would support the Department's efforts to collect effective baseline data to measure program performance.
My colleagues and I will be happy to respond to any questions you may have.
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