STUDENT ASSISTANCE

Mr. SHRIVER. Why do you consider such student assistance programs as the direct loans and the supplementary opportunity grants less effective than the basic opportunity grant program?

Secretary WEINBERGER. For one thing the guaranteed student loan programs we have are causing a certain amount of difficulty. They are guaranteed loans. The direct student loans would be subjected to the same kind of problems with respect to repayments and use of the funds.

We think that the most beneficial kinds of programs to a student are those that enable him to get what amounts to a Federal scholarship, use the funds in accredited institutions as the student wishes, and to secure his education. These funds are quite properly targeted toward the lowest income groups.

The guaranteed student loan program enables us to help parents and children of middle income families, but the other programs are for very specific kinds of purposes. They are designed to be operated entirely by the Federal Government with the direct loan being made by and ultimately repaid to the Treasury. We think that basically these programs don't serve the student as well as the program which puts more decisionmaking power into his hands, such as the basic opportunity grant program.

We also believe that it is much more important to encourage the States to adopt similar scholarship programs and if we can do that the total assistance will be increased but will be increased in a flexible way that will enable the student to get the most use out of it.

Mr. SHRIVER. The people who have been operating these programs in my part of the country seem to like the mix that we have had rather than putting all the emphasis upon the basic opportunity grants. Secretary WEINBERGER. There still would be considerable emphasis on the guaranteed student loan plan.

Mr. YOUNG. You still have considerable funds in the work-study programs. I recall about $250 million in the 1976 budget. Secretary WEINBERGER. Yes.

IMPACT AREA AID

Mr. SHRIVER. Quite a little discussion time of the committee has been taken up with elimination or partial elimination of the impact aid program.

Just for your information, not all of the committee feels as you do or prior administrations have. But according to figures that I obtained this morning the public schools in my hometown of Wichita, Kans. currently receive approximately $650,000 in impact aid funds. Five percent of their school budget amounts to over $2 million.

Obviously if their impact aid funds are reduced by this 5 percent figure they will get nothing at all. Would that be correct?

Secretary WEINBERGER. The basic proposal that we have made is that the school district would absorb up to 5 percent of their prior year operating budget to reduce the impacted aid program and this is the B children, the children whose parents work for the Federal Government, but who do not live on a Federal establishment.

50-132 O 75 pt. 1 4

Mr. SHRIVER. Would there be any B children programs left?

Secretary WEINBERGER. Yes; we would fund in 1975 something like 68 percent of the entitlement of B children, so that you would gradually be reducing it but you would be reducing it in a way that was designed toward eliminating it.

However, you would do it on a phased-down basis.

Mr. SHRIVER. Sixty-eight percent of entitlement?

Secretary WEINBERGER. That is the figure that I have of the percentage of entitlement of B children that would be funded in 1975. Mr. MILLER. We would compute the 68 percent as the starting point but the 5 percent reduction takes place after that, so I think the net amount would be about $40 million for B children.

Mr. SHRIVER. $40 million for B out of what total?

Secretary WEINBERGER. We would have a 1975 figure for B children of $355 million and we would have a 1976 figure of $40 million. That is the reduction that is proposed. We would start reducing the amounts paid for the B children on this 5 percent basis annually, the point being, as you know, we do not believe that the B children actually have this degree of impact on the school system. The fact that they are there, the fact that the school systems have been relying on these Federal funds, is recognized and that is why we don't say cut it all out in 1 year but start phasing it down.

STATE EQUALIZATION PLANS

Mr. SHRIVER. As you know, Kansas is among a small number of States which have passed public education equalization plans. The administrators of these plans are having considerable difficulty because of the long delay in getting some decisions made in HEW in regard to how they are to treat impact aid funds when determining how much State aid shall go to school districts receiving such funds.

These administrators have not even been told yet if HEW considers their plans to be true equalization plans. They don't know if they qualify even partially, and if partially, at what percentage. HEW has not yet come out with a definition of local revenue under equalization plans. They cannot plan effectively, and, in the case of Kansas, if these decisions are not made and announced soon, no action can be taken because the State legislature will have adjourned.

Our State stands to lose as much as $8 million in impact aid funds if these decisions are not favorable, but their primary worry now is that no decisions have been made. When can they expect action in this regard?

Secretary WEINBERGER. I understand that the equalization provision included in the impact aid law by the Education Amendments of 1974 has been a very difficult provision to define in operational terms. The Office of Education has consulted extensively with the State and local school officials on this subject. We expect to be issuing regulations soon and hope to get this matter resolved as expeditiously as possible.

COMMUNITY MENTAL HEALTH CENTERS

Mr. SHRIVER. Mr. Secretary, consistent with the administration's opposition to an extension of the community mental health centers

program, you are not requesting funds for new centers. Extension legislation is moving forward, however. The main purpose of this legislation is to complete the coverage of the approximately 1,500 catchment areas in this country with nearby mental health centers. While this figure of 1,500 catchment areas is generally used by those in the mental health field, I have not seen a countrywide description or map showing where the areas are, which ones are now covered and which ones are not. Could you furnish that information to the committee?

Secretary WEINBERGER. I do not have the specific information with me but am sure we have it and I would be happy to supply it for the record.

[The information follows:]

FEDERAL OUTLAYS FOR EDUCATION

Mr. SHRIVER. Only a portion of proposed Federal expenditures for education are in your request; other education-related programs are administered elsewhere, such as the veterans educational benefits, child nutrition programs, and others. Would you place in the record at this point the table which appears on page 140 of the special analysis of the fiscal 1976 budget showing the total Federal outlays for education for fiscal years 1974, 1975, and 1976? The total for 1976 is more than $16 billion.

Secretary WEINBERGER. We would be happy to do so. [The information follows:]

Total, education outlays..

Amounts previously carried for academic research not directed toward educational objectives.......

EDERAL HEALTH OUTLAYS

Mr. SHRIVER. Would you then place in the record the table on page 169 of the special analysis showing the breakdown of $38 billion in