5. The "temporaries" erected 10 years ago have deteriorated to the point where further maintenance is prohibitively expensive. Replacement is essential. Such replacements, unfortunately, cost money, and will not increase available space. At the war's end, obsolete temporaries were not a problem. There was a lot of slack in 1945, even college communities were able to help considerably by providing off-campus housing and feeding facilities. Such a slack, both on campus and in adjacent communities, has long been absorbed.

6. Faculty salaries, while never good, at least were comparatively stable from 1930 to 1940, but since World War II, and particularly since the Korean conflict, faculty and administrative salaries, from the standpoint of purchasing power, have continued to drop each year. In these times of industrial and commercial prosperity, there is a tremendous crisis where faculty salaries are concernedsomething must be done to hold present faculties and attract qualified personnel to the teaching profession. This problem of salaries places further strain on the limited resources available to our institutions.

7. After World War II, private institutions accepted an overhead of new and returning students at about the same ratio as the public shcools. This tended to maintain the balance between private schools and public institutions. Since some private schools now imply that, for financial reasons, they will expand only a little, or not at all, even greater burdens will be forced upon public institutions. New problems will be created in preserving the balance and relationship between public and private institutions.

Please permit me now to briefly use my institution, the University of Florida, to highlight some of the things which have been happening to higher education generally and as to what may be expected in the future.

Even

The University of Florida is a land-grant school, founded in 1853. At the start of World War II, enrollment had shown a small growth each year until the peak prewar enrollment had reached slightly beyond 3,000 students. then the steady growth had been crowding the institution and it was only able to house 32.4 percent of its student body in 5 residence halls (2 of which are now 50 years old). These halls were financed variously by contributions from the State and through the WPA program. The city of Gainesville, at that time a small county seat interested primarily in agriculture and the university, was able to absorb the balance of the student body in boarding and rooming houses.

At the end of the war, the enrollment jumped quickly to 7,300 and then to 10,000 students, or better than 300 percent over our prewar high. Adding to the problem was the fact that these were no longer just single male students, but in 1947 the institution was made coeducational. No women's housing was available and many of our buildings did not possess even a ladies' rest room. Nor was the problem limited to single students, but they were coming with their families, including families of up to 5 children. Finally the number of dependents on campus became as large as the total number of students who were enrolled at the institution before the war.

What was done to meet this unpredecented growth? Were it not for the prompt joint effort of many, it would have been impossible. The United States Government made available to us a wartime airport 10 miles away from the campus. By use of an extensive and expensive bus system we were able to house many hundreds of veterans in two paper barracks. The State and the United States Government combined to provide funds and materials to move 17 one-story barracks to our campus-barracks which had been originally built for a 4-year life, and were already 5 to 6 six years old when they were demounted, moved several hundreds of miles, remounted and made available. These so-called temporaries are now in their 15th year of age. Four men were assigned to each 10 by 14-foot room. The university tried to meet the housing demand for additional space by overcrowding 1,538 men into residence halls designed to accommodate only 1,120. The overcrowding and the creation of these "educational slums" were acceptable as a temporary measure and were tolerated by students and university administrators in the belief that the postwar bulge would run its course and conditions would then return to normal. It is common knowledge that enrollments did not drop back to prewar levels and in many cases the high postwar enrollments have held and it is from this high level the institutions are now having to face this new flood of students. By 1950, 4 years after the arrival of the bulge, students could no longer tolerate the living conditions in the temporary facilities, and it was necessary to reduce occupancy in the one-story barracks from 4 to 2 men in each room

and to abandon operation of the adjacent airbase which had deteriorated beyond use including the collapse of the utility system.

Some of this loss of space was made up by a construction program which added seven permanent halls to the residence hall system. These halls were financed by State contributions, and by pledging all income from our total existing resident hall system, as well as the new halls, we were able to float successfully a revenue certificate issue. These additional units were designed to house 1,189 students but it was still necessary to overcrowd and increase occupancy to 1,482.

Industries started to come into Gainesville following the war and the city's population increased considerably. The construction of private housing was extensive but only in rare instances were any additional units planned as roominghouses for students. For the rents that students could afford to pay, and the high building costs, it was considered an uneconomical investment by local capital. More than 500 freshmen were told each September that if they wanted to come to the University of Florida, they would have to make their own arrangements in an already overcrowded city. The effect on these particular students from the standpoint of their academic achievement, their morale, and their development as educated citizens was, to say the least, not healthy. Those other students with assignments to rooms on campus, however crowded and inadequate, considered themselves extremely fortunate even though many of the same problems prevailed.

It is considered significant in this connection that students assigned to inadequate and submarginal temporary housing on campus have consistently had lower composite academic averages at the end of each semester than those students living in permanent facilities. According to the registrar's office, for the first semester 1954-55, the all student body average was 2.1795. The university's grading system is to consider 4.0 and "A," 3.0 as a "B," and so forth. The average for all in university housing including the temporary dormitories was 2.0542. The depressive fact is that the average in our temporary dormitories was 1.7679, or nearly half a point below the all-student average. This in turn brought our overall average of those living in dormitories to an average lower than for all students. The temporary dormitories were the low of every type of residence classification listed. It is interesting to note that students are assigned to dormitory areas not by any particular preference, ability, or finances, but primarily on a first come, first served basis; after the permanent dormitories are filled, assignment is then made to the temporary dormitories.

By 1951, then, the university by use of overcrowding was housing 3,492 students, which equaled 38.8 percent of the total enrollment. The university was continuing to grow rapidly and without some new means of assisting the institution in financing new construction a crisis was developing. Federal assistance, in answer to educators' needs everywhere, through the Housing and Home Finance Agency by means of a 40-year revenue issue at 2.75 percent per annum, enabled the university to construct an additional hall for 630 students which was available for use in 1954.

A second revenue certificate program developed with the Housing and Home Finance Agency's permitting the construction of 10 small dormitories to house approximately 400 students. This raised the total percent housed to 41 percent of the student body. It should be noted that only through expanded occupancy and continued use of submarginal facilities was it possible to maintain this percentage. To have utilized facilities at their designed capacity would have meant that the university could house only 23 percent of its enrollment.

Conservative estimates indicate that the university enrollment will be more than 20,000 by 1965. Assuming no reduction in the overcrowded conditions in the permanent halls, but recognizing the inevitable that the temporary facilities will deteriorate beyond use within the next 2 years, it would then be necessary to add 5,180 student spaces just to maintain the percent housed at the same level as it is at present. At the average low cost of $3,000 to $3,300 per student for dormitory construction, this means the University of Florida alone will need an additional $17 million to house our increase of students and still not increase our percentage of university housed students or relieve our overoccupancy. This figure would not make any provision for desperately needed married student housing.

A new unit must be ready for occupancy by September 1957 to house better than 600 students, now in temporary buildings which will not be habitable by that date. This is a replacement need only. To meet the demands of rising enrollment and to do no more than maintain the status quo, it would be necessary

to have a new building to house more than 500 students ready for occupancy each September from 1956 to 1965.

In conclusion, America's national interest is dependent upon the ability of our institutions of higher learning to produce a quality product for our country's future scientists, engineers, doctors, statesmen, and other leaders in every field of scholarship endeavors.

Our institutions are facing an almost insurmountable task to attempt to provide an overexpanding need of faculties and facilities. There is presented a way in S. 1744 to help solve part of this problem. This act would enable housing and dining facilities to be constructed as substantially self-liquidating projects from reasonable student rentals-this important accomplishment can be effected without loss or expense to the Government. The expansion and liberalization of the college housing program by making amortization, where necessary, permissible over a 50-year period, the establishment of an interest rate of approximately 2.75 percent per annum, and the increasing of the revolving fund to $500 million is a realistic step, soundly proposed, and is in the best public interest.

Thank you for the opportunity of presenting these matters which are of outstanding importance to American higher education for your consideration.

Senator FULBRIGHT. Mr. R. B. Stewart, vice president and treasurer, Purdue University is the next witness.

We are very happy to have you.

Senator CAPEHART. Purdue is an excellent, possibly the best engineering and agricultural school in the United States.

Do you want that to stand on the record?

Senator FULBRIGHT. Well, yes. We will concede that coming from the Senior Senator from Indiana, we consider it proper on the record. Senator CAPEHART. Perfectly proper to say so.

Senator FULBRIGHT. Perfectly proper to say so. I agree it is a very fine institution.

Mr. STEWART. Thank you, Senators, both of you. You are very

generous.

Senator FULBRIGHT. I am well acquainted with the president of your institution who was chairman of the board on foreign scholarships. He was doing a very fine job on that activity also.

Mr. STEWART. That is right, and we have honored three of our students with Fulbright scholarships this year. We are pleased at that.

It just happens that we are one of the institutions that is also doubling and redoubling and not using Federal money to do the job. Senator FULBRIGHT. You have a very rich State out there. You are very fortunate they can support you.

Mr. STEWART. We have very good bank credit.

Senator CAPEHART. I noticed Indiana University has a $2 million loan-where is that chart there?

Indiana University has a $2 million loan under this. Well, I didn't read the statistics right. It was negotiated for.

Senator FULBRIGHT. Mr. Stewart, we want your advice on these matters. So will you proceed to give us the benefit of your knowledge. College housing

STATEMENT OF R. B. STEWART, VICE PRESIDENT AND TREASURER, PURDUE UNIVERSITY, ON BEHALF OF THE ASSOCIATION OF LAND-GRANT COLLEGES AND UNIVERSITIES

Mr. STEWART. Yes. I will read into the record my name: R. B. Stewart, vice president and treasurer, Purdue University, Lafayette, Ind. I have a lot of other titles also in private and other business, but

I have been financing facilities with borrowed money since 1927, and in the forties prepared the first published information about the extent and nature of financing facilities for educational institutions.

I was interested in looking through my table in this volume as to what has happened to interest rates.

Senator CAPEHART. Would you yield.

What is this book you have there?

Mr. STEWART. It is a book called Debt Financing of Plant Additions for State Colleges and Universities.

Senator CAPEHART. Are you the author?

Mr. STEWART. I am a coauthor. It was published by the Purdue Research Foundation at Lafayette.

Senator CAPEHART. I would like to suggest at this point to the Senator or anyone else reading this report or the record of these hearings that they get a copy of that book and read it.

Mr. STEWART. I will be glad to contribute one to the cause right

now.

Senator CAPEHART. Thank you, sir.

Mr. STEWART. The first loan was made in 1899, an interfund loan for the institution. The next loan that we found was made in 1918, and the interest rate was 7 percent. Through the years, these are the interest rates, and you will be interested in them:

Up to 1924, they were paying 7.6 and by 1924 had gotten it down to 5.1 percent. Then it went to 5.4, 3.9, 5.1, 4.9, and 5.6; and that was the famous year, 1929-30, when we borrowed money at 5.6.

In 1931, it was 412; 1933, 3.2. That is the first loan that we have a record of sold to the Federal Government, which was under the HOLC and relief agencies in those days to make work.

In 1934, the rate was 4.1; 1935, 3.9; 1936, 3.5; 1937, 3.6; 1938, 3.7; 1939, 3.4; 1940, 3.2.

In 1938, 1939, and 1940, the Federal Government was making loans to us.

In 1941, no loans made by the Federal Government. The interest rate dropped to 22 percent, the $3 million loan at 1.9 percent in that list.

Nineteen hundred and forty-two, 2.4 percent; 1943, 3.1 percent; 1944, 2.2 percent; 1945, 1.8 percent; 1946, 2.2 percent. In that year, I borrowed

Senator CAPEHART. Are these borrowings of Purdue University? Mr. STEWART. No; these are borrowings on a national basis. This is the average.

In 1945 or 1946, we borrowed at Purdue University on a student department project for graduate married students at 134 percent, 27-year

Senator CAPEHART. 134?

Mr. STEWART. Yes, sir.

We borrowed $212 million about 2 months ago at 2.97. We borrowed $1014 million last fall at 3.12, I think it was.

In other words, interest rates being paid by schools that have established their credit are not exhorbitant, in my judgment. But we have this phenomenon as indicated by Mr. Baughman's testimony, that the need with the increased enrollments for the universities to provide housing has increased because we no longer have commensurate increases in private volumes that cater to student housing.

In Mr. Baughman's town in Florida, in our town in Lafayette, Ind., when we add 5,000 students, those 5,000 students cannot find rooms in the city in which to live. We have to, therefore, provide housing accommodations. This is true for the private schools and small schools as well as the public schools.

For that reason, I am not here assuming that this bill requires somebody to justify it. I think the justification is evident. The real question in my thinking is how can this bill really help the colleges without it necessarily costing the Federal Government something.

I have heard the word "subsidy" used this morning, and I am assuming that if it does not cost the Federal Government anything this is really not a subsidy.

The real issue is interest rates and cost, and they are importantSenator CAPEHART. Mr. Chairman, would you yield.

Is there any advantage in having the FHA guarantee these bonds rather than make the direct loans?

Mr. STEWART. Well, I will discuss that, but I would remind you that FHA-guaranteed loans at the banks and insurance companiesand I am in the insurance business and making them, Senator-run at 4 and 42 percent in the open market, and they are guaranteed. Senator CAPEHART. But you were giving there the interest rates on which financing was done over the years?

Mr. STEWART. In this kind of an institution. This is public institutions.

Senator CAPEHART. What?

Mr. STEWART. Public institutions, public universities.

Senator CAPEHART. Private universities might have a tougher time; is that it?

Mr. STEWART. That is right, and there I am really somewhat concerned because we need to keep our private schools able to carry their share of the students.

Senator CAPEHART. The reason I was feeling you out on thatyou and other witnesses-is that you possibly could get more money and get it quicker if you could go the route that you do on direct appropriations of the Government.

Mr. STEWART. Maybe I will develop that in my testimony here because that is part of it.

Senator CAPEHART. Yes; go ahead.

Mr. STEWART. Let's understand the relationship between board-androom cost and cost of running the college. The real problem is what does it cost the student to go to school and his costs are made up by the fees and charges of the college for instruction and by board and room. If the college can cut the cost of board and room, maybe they can get more money from the student to pay for faculty and classroom facilities, and this is one way in which without a subsidy we can make it possible for them to improve the total because I think it goes without saying that the individual family has more dollars now than they had in 1929, and consequently they can pay more than some of the rates without any greater degree of hardship. But if it has to go for sheer financing of borrowed money for residence halls, then it limits how much the students can pay for the other services, and when we finance a residence hall, I finance it on the basis of what does it cost the student.