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Mr. Chairman and Members of the Subcommittee, I am pleased to appear before you today to present an overview of the President's 1997 budget request for the Department of Education. I would like to submit my statement for the record and make a short summary of it for the Subcommittee.
Let me begin by thanking the Members of this Subcommittee, particularly Chairman Specter and Ranking Member Harkin, for working to protect the Federal investment in education in the 1996 appropriations bill. While the final bill fell short of our request in a number of areas, President Clinton and I were pleased that the bill reflected a bipartisan commitment to do the right thing for our children, and we hope that commitment will continue with the 1997 appropriations process.
I also want to thank Chairman Specter for his strong support of Goals 2000, both in securing funding and in proposing constructive amendments aimed at clarifying the Goals 2000 authorizing legislation. It is unfortunate that misinformation has in some cases prevented States, communities, and schools from using Goals 2000 dollars to move forward on their own reform efforts. Your amendments are helping to overcome this problem, and will allow local schools in New Hampshire, Montana, and Oklahoma to receive funds directly to help improve the quality of education for their students.
Five other dynamics are also at work: (1) the need to improve literacy at all levels, with a special emphasis on reading for children in their early years of schooling; (2) the attention being paid to making sure that our schools, teachers, and students are equipped to take full advantage of this new information age; (3) the concern we all share about drugs, violence, and the negative consequences of family break-up; (4) our national effort to raise academic and teaching standards to prepare our young people for this new information-driven economy; and (5) the growing demand for some form of quality postsecondary education.
All of these dynamics inform the budget we present to you today. The President's 1997 request will help America respond to these challenges by increasing the Federal investment in education. This budget will help schools and communities advance their own efforts to improve education. And it will help to make sure that every deserving student who wants a postsecondary education can get one.
The President's budget also demonstrates that, by making hard choices, it is possible to protect and even increase the Federal investment in education while still balancing the Federal budget. It is important to note that this request fits within the President's balanced budget plan, which under both CBO and OMB scoring would eliminate the Federal budget deficit in 6 years.
I have described the House bill as "a stand-still budget," but on second thought I think it's more fairly labeled a "fall-behind" budget. At a time when we clearly need to be moving ahead on education in terms of raising standards and improving performance, and when booming enrollments are creating new challenges to State and local governments, it is simply not enough for the Federal government to just provide the same amount as last year.
Take Title I, for example; the House would provide Title I funding at about the 1996 level, providing less real dollars for services to children. The House bill would serve about 161,000 fewer Title I children than in 1996, and about 413,000 fewer than the President's request.
There are several areas where the House proposal is much worse than this. Goals 2000 -- which is currently helping 12,000 schools raise academic standards and achievement -- is simply eliminated. Eisenhower Professional Development State grants -- which this year are helping to upgrade the skills of over 300,000 teachers -- are also zeroed out. And despite near-universal agreement on the importance of technological literacy in preparing our children for the challenges of the 21st century, the House bill provides no funding for the President's Technology Literacy Fund.
The House also takes aim once again at the Direct Loan program, proposing a cut in administrative funds that would effectively cap new Direct Loan volume, undermine the Department's very successful efforts to prevent and collect defaulted loans, and threaten the overall integrity of the student aid programs.
The House approach is clearly unacceptable. I believe that if House and Senate appropriators look at the President's plan and their own proposals over the past two years, they will find more than enough savings to stay on the path toward a balanced budget without gutting the investments needed to prepare the Nation for the challenges of the 21st century.
Despite these overall increases, I want to emphasize that, just as in previous years, this budget required difficult choices among our discretionary programs. You may recall that last year President Clinton proposed to eliminate or consolidate almost 70 programs, or about 30 percent of the programs then administered by the Department of Education. Over the past three years we have consistently recommended the elimination of unnecessary or lower-priority programs, and working together with Congress we have succeeded in eliminating 64 programs totaling about $625 million.
This year we are proposing reductions of about $600 million by eliminating 16 additional programs and decreasing funding for other programs. These proposed savings, combined with our overall requested increase of $2.8 billion, will allow us to direct more than $3.4 billion in additional funding to those priorities with the greatest impact on teaching and learning in the classroom.
For Goals 2000, we are requesting $491 million, an increase of $141 million over 1996, to help some 12,000 schools get the resources they need to raise academic standards and implement their own reforms, and to support parental assistance centers in 42 States. In addition to higher standards, our Nation's high schools need to be redesigned for success and the demands of our growing economy. Therefore, our budget provides $200 million, an increase of $20 million or 11 percent from the 1996 level, to expand School-to-Work Opportunities for all students. Combined with an identical amount in the Department of Labor budget, this level would help nearly all States implement their School-to-Work systems.
The President also is requesting $250 million for a new Technology Literacy Challenge Fund, which would provide Federal funds to stimulate State, local, and private sector investment in educational technology. This 1997 request is the first installment of a 5-year, $2 billion investment aimed at creating classrooms for the 21st century, with technology fully integrated into the curriculum and how students learn so that they leave school with the technological, communications, math, science, reasoning, and problem-solving skills they will need for success in the Information Age.
We have 4 goals that the Challenge Fund will help achieve: all teachers will have the training they need to help students learn using computers and the information superhighway; modern, multi-media computers will be available in every classroom; every classroom will be connected to the information superhighway; and educational software and on- line resources will be integrated into every school's curriculum.
Our budget will help parents and teachers start up public charter schools by providing $40 million, or more than twice the 1996 level, to support about 700 Charter Schools. This investment reflects President Clinton's strong support for public school choice. Today the greatest obstacle to charter schools is the lack of start-up funds. This request would help overcome that obstacle.
All of our reform initiatives rely on relatively modest Federal investments to mobilize State, local, and private resources in support of comprehensive plans to improve our schools. But when growing enrollments confront already-strapped State and local education budgets, reform too often becomes a luxury that schools cannot afford. For this reason, our 1997 budget increases State grant funding in key areas of Federal education support.
Title I Grants to Local Education Agencies is the largest source of Federal funding to help disadvantaged students learn to read and do math. We are requesting $7.2 billion for Title I, an increase of $435 million or 6.5 percent over 1996, to help a total of 7 million disadvantaged students achieve to the same challenging academic standards as all students.
We also need to make sure that students learn to resolve conflicts without violence, so that our children and their teachers feel safe in our schools. Safe and disciplined classrooms are an absolute prerequisite for teaching and learning. The President's budget includes $540 million for Safe and Drug-Free Schools and Communities, an increase of $74 million or 16 percent over 1996. These funds are essential to helping end violence and eliminate drugs in over 14,000 school districts serving 40 million students.
I urge the members of this Subcommittee to keep in mind the sad fact that even though overall drug use in America has fallen dramatically in recent years, drug use among our young people has gone up. In a similar fashion, the crime rate is down but violence among people under age 18 has gone up. This is not a coincidence: President Clinton has observed that "illegal drugs go hand in hand with violence," fostering fear and undermining the quality of education in our public schools. And while the hard work of ridding our schools of violence and drugs must be done by parents, teachers, community leaders, and perhaps most of all by students themselves, we can help make sure that every school has the resources needed to be safe and drug free.
And if we are really serious about helping students learn to challenging academic standards, we have to make sure educators have the training they need to teach to these high standards. Our budget provides $610 million for Eisenhower Professional Development State Grants. This request is $335 million more than in 1996, and would provide intensive training opportunities in core academic subjects to 750,000 teachers.
The $3.3 billion requested for Special Education State Grants, an increase of $299 million or 10 percent, will help maintain the Federal share of the costs of educating nearly 6 million children with disabilities. This request also supports our proposal to reauthorize the Individuals with Disabilities Education Act, which includes changes designed to improve educational results for these children.
The President's budget for education makes other critical investments, including $1.1 billion for a reauthorized Vocational Education State Grant program that would maintain strong support for career and occupational training in our schools, $290 million for Adult Education State Grants to help improve literacy for adult Americans, and $108 million for Research aimed at building and sharing knowledge about what works in education.
Our request provides $617 million for Impact Aid, with funds targeted to districts enrolling children living on Indian lands and children of members of the uniformed services who live on Federal property. This proposal is aimed at reimbursing school districts in which educational services for these students represent a significant and uncompensated burden.
The President also recognizes the extra burdens faced by school districts enrolling large numbers of recently arrived immigrants and other students who do not speak English well. Our request would double the funding for Immigrant Education, from $50 million to $100 million, to help States meet the educational needs of growing numbers of immigrant children. Our budget also includes $157 million for Bilingual Education to help limited English proficient children learn English.
Our 1997 student aid budget will make available $41.5 billion, up $3.2 billion, to serve 7.3 million students -- or 262,000 more than in 1996.
President Clinton is proposing to strengthen the lifeline to college for working and poor students by increasing the Pell Grant maximum award to $2,700 in 1997. This is $230 or over 9 percent higher than the 1996 maximum grant of $2,470. Overall, the President's request will support Pell Grants to almost 3.8 million students, or 122,000 more than in 1996.
Our 1997 request also makes good on the President's commitment to help many more young people work their way through college. In his State of the Union address, President Clinton called for an expansion of the Work-Study program to serve 1 million students by the year 2000. As the first step toward this goal, the budget includes $679 million, a 10 percent increase that would provide Work-Study opportunities to an additional 72,000 postsecondary students.
The budget provides $130 million for Presidential Honors Scholarships, a new initiative that would reward academic achievement by giving a one-year, $1,000 scholarship to every high school student who graduates in the top five percent of his or her class.
Our request of $500 million for the TRIO programs, an increase of $37 million or 8 percent over 1996, complements our efforts to reward merit. This increase would expand early intervention, outreach, and in-college support services for nearly 700,000 disadvantaged students to encourage and help them to enter and complete postsecondary education.
We also are proposing to continue the successful implementation of the Direct Loan program by requesting $491 million for Federal administration under Section 458 of the Higher Education Act, an increase of $55 million over the 1996 level of $436 million. As I mentioned earlier, the House is proposing to cut Section 458 funding to $420 million.
The combination of greatly simplified loan processing and greater repayment flexibility has made Direct Lending enormously popular with students and schools alike. I think it is fair to say that this is one Federal program that has delivered what it promised, and we are committed to its continued success.
Already, 400 new schools have joined the Direct Loan program for a total of 1,700 institutions, and we expect more schools to sign up after November. This increased participation will raise Direct Loan volume by a minimum of 25 percent -- from the current 32 percent to at least 40 percent and as much as 50 percent of overall loan volume. Even more important, the number of loans in repayment will increase by 175 percent, from roughly 600,000 at the end of 1996 to 1.6 million in 1997.
There is no way to reconcile these growing responsibilities with the reduced administrative funding proposed by the House. The program is serving students, schools, and taxpayers well, and we believe students and schools should be able to choose freely between Direct Lending and the more heavily subsidized Federal Family Education Loan program. The House proposal would prevent this competition by effectively capping participation in Direct Lending. As you know, the Administration has long opposed any cap on Direct Loans, and we will continue to do so.
In addition these budget proposals, President Clinton recently announced a bold new initiative that would provide a $1,500 tax credit aimed at promoting universal access to two years of postsecondary education. This new program, called Hope Scholarships, would make the tax credit available to all students for the first year of postsecondary study, but students would have to maintain a B average to receive the credit for the second year.
Hope Scholarships would complement our renewed proposal for a Tuition Tax Deduction that would permit families to deduct from their taxable income up to $5,000 in postsecondary education expenses each year. The maximum deduction would grow to $10,000 by 1999.
All of these proposals will help ensure that college remains affordable for American families and their children.
One measure of our success has been the dramatic decline in the costs of student loan defaults. By bringing the student loan default rate down from 22 percent to 12 percent and by nearly doubling collections to roughly $2 billion, net default costs dropped from $1.7 billion in 1992 to $0.5 billion in 1995. This progress reflects our strong emphasis on accountability in managing Department programs. I was especially pleased to read, in a recent New York Times article on the rising risks of Federal loan programs, the comment of Comptroller General Charles Bowsher that "one bright spot is the improved oversight of student loans by the Education Department."
To continue making the changes needed to produce results like these, we are asking for $505.7 million in total discretionary budget authority for Federal administration in 1997. This request would restore funding for salaries and expenses to approximately the 1995 level, and represents just 2 percent of the total discretionary budget for the Department.
These funds would be used to improve management of the student financial aid programs, provide more effective and helpful program monitoring and technical assistance to grantees, enhance information technology used to improve customer service, upgrade accounting and financial management systems, maintain support for staff training, and complete the renovation of the Department's government-owned headquarters building.
The total request for Federal administration, including discretionary and mandatory funds, would support 4,613 full-time-equivalent (FTE) employees in 1997, compared to 4,750 FTE in 1996 and 5,131 FTE in 1995. This reduction has been achieved by attrition and by retirements resulting from the "buyout" program, which will generate estimated savings in 1997 of over $3 million. We are coping with these staff losses through the use of improved technology, the reallocation of staff to high-priority areas, and staff training. The Department is ahead of schedule in reaching the President's goal of reducing its staff by 12 percent by the year 2000.
I would like to say a word about House action on administrative funds for the Department. The total reduction the House made in Program Administration is $29 million or 9 percent below 1996, and $58 million or 16 percent below the President's request. This cut is in addition to the severe reduction in funding for student loan administration that I mentioned earlier. Because we had already planned to reduce employment by 137 FTE, or 3 percent, it will be impossible to absorb the House reductions without RIFs, furloughs, or cuts in contracts for processing student aid applications.
For example, the House cuts, coming on top of the 8 percent reduction in 1996, could cause furloughs in Program Administration of 20 work days -- the equivalent of a full month -- for 2,700 employees. After our shutdown experience this past winter, we learned firsthand that furloughs of this magnitude can adversely affect 7 million college students, 1.2 million disabled adults, thousands of teachers and other State and local employees, and the effectiveness of many programs carried out by our Nation's schools. The funds you appropriate for education programs simply cannot get to schools and students without Department employees.
This budget responds to both of these demands by investing responsibly in quality education for all Americans. It helps keep us on the path to a balanced budget, while at the same time keeping education on the right course for our students, our families, and our country.
I will be happy to answer any questions you may have.
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