than those experienced by banks under the federally insured student loan program.

The primary reason for this is an ex-student may be appealed to for repayment on an NDSL loan on the basis that the money he borrowed made education possible for him and the time has come for him to repay to make that possible for someone else.

Unfortunately, banks cannot successfully use that line of persuasion, and along with the high amount of the student's federally insured student loan balance, it is my feeling that they will always experience collection difficulties.

The strongest fear is that this high collection failure rate will be used as the rationale for cancellation of that program, leaving nothing but BEOG, and its built-in deficiencies.

It is herewith proposed that a per capita level of lending be established and every college and university be funded to that level with NDSL funds until such time as the annual collections for the college. or university equal its level of lending.

The final point we wish to raise is one that no doubt few testimonies presented to you are without. However, the point represents a sufficiently significant problem that it must be repeated.

The recent new Federal financial aid programs have been funded without any administrative contribution to financial aid officers which are significantly affected by those programs.

The processing time is increased, the recordkeeping requirements rise and the need for student advising expands. This is all expected to be accomplished within existing administrative budgets.

The result? None of the above programmatic necessities is done well.

This is not to suggest that the Federal Government should bear the entire brunt of financial aid administrative costs. It is, however, a strong reminder of the partnership developed with the institution in these endeavors and a plea that the partners continue mutual contribution.

Thank you for this opportunity to testify before this subcommittee. Mr. LEHMAN. Thank you, Dr. Brusha. Your statements about the direct student loans have more incentive to be paid, have you got any comparison figures on the ratio of delinquencies?

Mr. BRUSHA. No, sir, unfortunately I don't have a comparison figure. The basis of this statement was, I was a director of financial aid at the University of California, Los Angeles, for 3 years, and in that office we collected our own national direct student loans.

We appealed to students on this basis. We had a failure rate of less than 4 percent on our loans. We had a rate of somewhere in excess of 50 percent of bankrupts reaffirming their obligation to the national direct student loan.

Maybe it was our approach as opposed to some of the others, but we dealt directly with the student. We had our own skip tracers in the office, and for a sizable program we had an extreme amount of luck with that approach.

Mr. LEHMAN. I can see where if a person refuses to repay $100 to a bank, that this $100 didn't necessarily come out of the pocket of the next student because it competes with commercial loans and every other thing, but if you refuse to pay $100 back to a direct student program,

that's going to be $100 less the institution itself would have to loan. another student who also needed an education.

It was interesting on the bottom of page 2, top of page 3, how a student goes further into debt in order to pay off what he already owes. You would have to take larger and larger loans to obtain an advanced degree; and the only degree he could obtain would be a masters in business administration in order to be able to handle his own financial problems. Of course it does get a little complex.

Your institution deals with the last 2 years of undergraduate work, and you have students who are no longer usually dependent on their families the independent student.

What factors should be of concern in relation to your institution in regards to the independent student factor?

Mr. BRUSHA. I think one of the things about our student, unlike some of the students I have been acquainted with in past university experiences, our student is not merely the 19- or 20-year-old who has probably taken his first 2 years and continuing on.

The majority of our students are people who have been waiting who may have taken their first 2 years at a community college 4 or 5 years ago and now decided that it's time for them to continue on in their education.

They are a remarkably conservative group. They are

Mr. LEHMAN. Economically conservative?

Mr. BRUSHA. Economically conservative at least.

Rather than wait on the outcome of Federal programings, my experience is that they have a tendency to rush early to the banks to take out federally insured student loans, even maybe more than they need, subject to funding, but they are so afraid of a lack of funding for any upcoming year, they feel they would be safer doing this, and they do that.

I think one of the things that I did not mention in my testimony, that students all over the country, and the universities in the place of those students, would find highly, highly effective in financial aid is a year's forward funding, so that we can

Mr. LEHMAN [interposing]. Forward funding of some kind is necessary because the stop-go funding cycle is clearly causing problems. Mr. BRUSHA. At this point in time-it is what? June 14. We as yet do not know what our funding is for next year on Federal programs.

Mr. LEHMAN. So if we get forward funding from K through 12, then we'll start to take up forward funding in student assistance, but that's been a problem in all types of education. The only place we don't have forward funding problems is in the Defense Department. Maybe we ought to use some of their techniques.

I just wonder what portion of your students are gainfully employed or working students and what portion

Mr. BRUSHA [interposing]. Unfortunately I don't have that percentage at hand, but I know the percentage is remarkably high.

Mr. FRANKLIN. Have many of your students, under existing law, reached a point on graduation that they have found themselves with unmanageable loan obligations?

Mr. BRUSHA. In terms of the federally insured student loan, we're not aware of that on the firsthand knowledge. We're aware of it by word of mouth, you know, people saying, you know, I can't-they

would come back and say, you know, I cannot make my educational— the demands on me for my educational lending. So I've got to come come back to school and get a higher degree. We get a number of those students.

Since we somewhat in fact lose contact and we're too young a university to have yet established a firm alumni group, we're not getting that feedback directly.

Mr. FRANKLIN. What was your experience at UCLA in that regard? Mr. BRUSHA. At UCLA it would've been my experience it was very high in terms of the students who were having difficulty. We had a great number of bankruptcies. I'm frankly surprised that students have not used that out more.

Mr. FRANKLIN. Were the bankruptcies a majority of the people?

Mr. BRUSHA. No, no, not a majority. Mostly I think at the B.A. level as they leave school the realization of the debt is just not there, and it doesn't hit them until 9 months later if they haven't entered a graduate school, at which time the realization never hits them until the day that first bill comes in and they realize that they owe $10,000 or more, $25,000.

I understand that there's some talk that the upper limit for the federally insured student loan may go to $25,000, and you can rest assured that if it does, there will be a number of students who will run it up to $25,000.

Mr. LEHMAN. Do you have a graduate program now?

Mr. BRUSHA. Very small one, yes, sir, we're growing. We have three programs now, one in business, one in education, and one in the hotel school.

Mr. LEHMAN. John?

Mr. LEE. For my own sake can you tell me a little more about the size of your school, a little background?

Mr. BRUSHA. We're approximately 9.000 students, and we're an upper division in graduate university. This is the completion of our second year. We had our first full 2-year graduating class last year. We're divided into five schools and a college, the college being arts and sciences, and the schools being education; business; health and social science; hotel, food and travel service and technology.

We're the only-no, let me restate that. We're the first State university to be located in Miami. I don't know if I'm stepping on FAU's toes or not. FAU is in Boca Raton. We're the first State university down here.

Mr. LEHMAN. Florida Atlantic.

Mr. BRUSHA. Florida Atlantic.

Mr. LEE. These 9,000 students, you indicated they're older than in most institutions?

Mr. BRUSHA. Yes, our average age is about 27. Apparently a number of people in a number of students in south Florida-this part of south Florida, Miami-have waited since the inception of the first talk of Florida International University to come back to school, and they have come back with enormous enthusiasm and in surprising numbers. Mr. LEHMAN. Much larger than your projection?

Mr. BRUSHA. Right.

Mr. LEHMAN. What had happened obviously is that many people who had gone through the first 2 years in a junior college just couldn't afford the tuition at the University of Miami or were not able to travel

back and forth to Boca Raton 50 miles away or to go to the University of Florida or one of the State schools.

So they just delayed the completion of their education until we had a State institution in this area, which is FIU, and FIU is going to, I understand, include a branch.

Mr. LEE. That's all, thank you. This has been helpful to me.

Of those 9,000 students, how many are receiving some form of financial aid?

Mr. BRUSHA. Approximately 2,000.

Mr. LEE. Do you have a lot of part-time students?

Mr. BRUSHA. Considering that-considering the number of students that we have and their work habits, we surprisingly don't have a lot of part-time students. I would guess-I'm guessing-I'd hate to throw out a guess, but it's not a lot, a quarter of the student population, parttime students that is

Mr. LEE. Was I correct in inferring that most of your students are under the federally insured loan program?

Mr. BRUSHA. Yes, many, many federally insured student loans.

Mr. LEE. Can you give me an indication of the size of your college work-study program?

Mr. BRUSHA. In dollars? About $300.000.

Mr. LEE. And do most of them work on-campus?

Mr. BRUSHA. Most on-campus. We're still new enough that our offcampus program now is being run through the local Urban Core Agency, and we hope to expand that possibly either through the agency or if the agency cannot do it, through our own contract because I feel very strongly about a strong off-campus work-study program.

I think it's good for the students. I think it's good for the community. So I would like to see ours expanded.

One of the reasons our financial aid officer, by the way, is not here today is he is on campus for the first time day before yesterday. He's brandnew, so that's why I'm here.

Mr. LEE. How much expansion do you see is possible realistically in terms of college work-study?

Mr. BRUSHA. Realistically if we have timely notification of the amount we can use, I think we could expand easily by a third. Mr. LEE. Do you run a co-op education program?

Mr. BRUSHA. It has just started. It is not underway yet. As a matter of fact we are beginning to undergo within 2 weeks for that cooperative director of cooperative education.

Mr. LEE. Is this going to be with Federal funding?

Mr. BRUSHA. I don't know-that I don't know.

Mr. LEE. But you're looking forward to expanding

Mr. BRUSHA [interposing]. It's not under Federal funding in terms of a grant; no, I know that.

Mr. LEE. There's a small amount of money for development of coop education.

Mr. BRUSHA. I don't believe-if that's the grant I'm thing of, I don't believe we got that. We applied, and I don't believe we were funded.

Mr. LEE. But you're looking to expand your co-op education program?

Mr. BRUSHA. Oh, yes, yes.

Mr. LEE. As well as your college work-study

Mr. BRUSHA [interposing]. Our college work-study program, right. Mr. LEE. And that doesn't cause too much administrative difficulty. Mr. BRUSHA [interposing]. Certainly if we go to a-if we expand off-campus under the contractual requirements of a work-study program, if we do not work through an agency who does that for us, like Urban Code, who does all the contracting and does all the paper work, it creates quite an administrative hassle.

I know at UCLA we had four people doing nothing but college work-study program because we had a sizable office for the off-campus program that required contracting with individual agencies, some degree of recordkeeping on each student. So we had four people there and a program that was probably four or five times the size of this

one.

Mr. LEE. OK.

Then to wrap this section up, for these outside agencies do you think it would be possible to change the Federal matching grant from 80 percent to, let's say, 50 percent? Do you think you could still induce nonprofit agencies to cooperate?

Mr. BRUSHA. I would have to assume, yes. Our experience at UCLAand I cannot share any experience here because I just don't knowwas that the off-campus agencies were very, very fond of having our students.

Now, I didn't get the note in their voice that they were only fond of having them because it only cost them 20 percent, but they seemed to really feel that they were doing a fine job. Assuming they need those jobs done, they were not just providing those jobs-and I did not feel any sense of that either that even at a saving of 50 percent, you know, that they would be willing to do it.

The Urban Corps, for example, normally charges at least it did there in Los Angeles-10 percent override, and it had no difficulty in finding people at 70, 30 in essence, and I believe many of the schools in the California area last year were going to a 60, 40 spread. They felt that they had that ability on their own.

Mr. LEE. There was an option?

Mr. BRUSHA. Yes, and they were doing that themselves, and the experience was that they did not have that much difficulty.

Mr. LEE. Thank you.

Mr. LEHMAN. Thank you very much. I would like to see the student work-study program extended to the private sector as I said before because I think the student could get some experience there that would be of value to him, too.

Thank you very much, Dr. Brusha, and I hope that you continue to have the kind of success that you are looking forward to at FIU. Mr. BRUSHA. Thank you very much.

Mr. LEHMAN. The next witness is Dr. Brown, from Florida Memorial College. I know you're familiar with the problems of the students and the student assistance programs because you're dealing with them every day, and I think you can just go ahead and begin.