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differently, foregone earnings are relatively much more of a sacrifice for a person from a low-income family than for a person from a high income family.

In other words, targeting of public subsidies through a combination of grants to low-income students and modest tuition charges will result in a more effective use of a given amount of public funds in encouraging equality of opportunity in higher education.

Let me just refer very briefly to the chart on page 42 which comes out of the recent report on "Tuition," showing that existing public tuition subsidies, if they alone are taken into consideration, go, in relatively large percentages, to the two upper fifths of the income distribution in terms of family income. On the other hand, a combination of public tuition subsidies and student aid, as recommended by the commission, would shift subsidy funds more effectively toward students coming from the lower two-fifths, but would result in a not too unequal distribution of subsidies overall. That is in the lower righthand corner of that chart.

Now, we were really rather embarassed to discover that the increase actually required in terms of the present relationship, on the average, between tuition charges and educational costs was not as large as the original report "Who Benefits?" implied.

We did some new calculations for the new report on tuition and we found that at present that tuition revenue represents about 24 percent of educational costs in public 4-year colleges and universities, but that it may be more like 27 to 28 percent if you adjust for the high cost of graduate and medical education in universities. In fact, for the universities alone, it may be closer to 30 percent on the average. Thus, on the basis of the 24 percent, tuition would need to be increased only 1 percent over and above educational costs per year for the next 10 years to bring it to the one-third level.

But we also pointed out, in the new report on tuition, that there was enormous variation among State systems, that some of them were above the one-third level now and others were far below. Thus, to carry out our recommendation, the actual impact would vary enormously among States.

I am not going to attempt, because I know I have probably taken up too much time, to say anything about support of graduate students, but I have included a discussion of that problem in my prepared

statement.

Looking toward the future, we see, as quite possibly a major emerging problem, the possibility of a legal decision which would ban the use of parental income as a criterion for determination of need for student aid. We are already in a situation in which many students are declaring themselves independent of their families. Fortunately, such data as are becoming available suggest that these students are mostly from low-income families, so this tendency thus far is not subverting the general purpose of student aid.

But, if we had a legal decision banning the use of parental income, we would be in a whole new "ball game" and would have to look for other approaches to encouraging equality of opportunity in higher education.

We are working now, and it is my particular staff responsibility, on a report on the "2 years in the bank" or the "2 years of free access' proposal. It is being done in cooperation with the American Council

on Education, which is keenly interested in it. One of the problems that we are exploring is how the Federal Government could help to implement low or no tuition in the first two years of public higher education or perhaps all higher education in the States?

This is not an easy problem, because you cannot go about it in terms of having the Federal Government pick up all or part of the cost that would be involved, in view of the enormous variations in tuition levels from State to State. That approach would simply penalize the States that already have low tuition and reward those that now have high tuition. So one has to search for a different kind of approach, and we are exploring Federal grants-in-aid to the States on the basis of a variety of formulas, as one possible approach, but we are, by no means, ready for any recommendations as yet.

Let me finish with just a plea for adequate funding of the basic opportunity grants program as my final word.

Mr. O'HARA. Well, thank you very much. I must begin by commenting that your testimony has been very, very impressive and it shows your thorough familiarity with the subject and your keen insight into the nature of the problem that the subcommittee is facing.

I think your testimony has been very valuable and I appreciate your coming before us today. I am, of course, very interested in the study that you are currently undertaking with respect to ways in which we could promote a low or no tuition program for at least the first 2 years. I sometimes say it "2 or more years" and I had thought of saying it "14 or more years," but I thought I would settle for 2 or more years. Dr. GORDON. My comment on that point, Mr. Chairman, is that the Commission on Higher Education that was appointed by President Truman recommended 14 years of free-access to public education and when I was reminded of this I became very curious as to what they said about financing. Essentially, what they recommended was Federal grants in aid to States to encourage them to move in this direction. Mr. O'HARA. I am going to drag out a copy of that report. Dr. GORDON. I think it was published in 1947.

Mr. O'HARA. Who was chairman?

Dr. GORDON. The chairman was a man named Zook, who at one time was president of the American Council on Education.

Mr. O'HARA. I would like to dust that off and take a look at it. Now, pursuing that study, you might be interested in an experiment that was done recently in Wisconsin, and I don't know if you are aware of it, where two University of Wisconsin centers, on an experimental basis, made sharp reductions, very sharp reductions in tuition in an effort to determine what effect that would have.

This effort had dramatic effects on attendance, much larger effects than one could have predicted from the suggestion of the Commission on the financing of post-secondary education, that a $100 increase in tuition would result in only a 1 to 3 percent drop in enrollment.

Dr. GORDON. Yes; but that was a very global kind of estimate. I think it needs to be refined before it can be used in actual forecasting. Mr. O'HARA. Yes. This material from Wisconsin which is just now being refined, it is all very new, we have some of the preliminary findings.

Dr. GORDON. Yes. I would like to look at that, but I might also somewhat hesitantly bring in the California community colleges which have

had no tuition all along and which attract, as you probably know, an enormously high proportion of high school graduates in the State.

Mr. O'HARA. Yes; they do. I think that is a very important thing to look at. In fact, Mrs. McCauley, who is a member of the student financial assistance community in California and involved with the junior colleges, indicated that in two of the California community colleges where they knew a very large percentage of the students were of low income, they made a special effort to acquaint the students, the enter ing students, eligible students, about the basic grant program so they at these two community colleges made sure that every student who was entering for the first time within the time frame prescribed for eligi bility had mailed to them or, if they had not yet registered, had handed to them a BOG application together with the complete information about how you go about applying and so forth. And they found a very, very small percentage really of the eligibles applying, which suggested very strongly that the main thing that got them into the community college was, or the main things that got them to the community colleges had to do with the low cost of an accessibility, physical accessibility.

In other words, if it was inexpensive enough and convenient enough, many of them got there. You might want to see that.

Dr. GORDON. I would like to see that. There may be reluctance, you know, to go through the forms of applying.

Mr. O'HARA. I think that is a factor you have to look into.

Dr. GORDON. On the other hand, I can't believe there is not a need, because I know that in one community college in Oakland, for example, which serves a very low-income population there has been great concern about cost of books, and the students have been pressing for special aid to meet the cost of the books.

Mr. O'HARA. I am sure there is great need. We had a student here from the Associated Students of San Francisco State University who told us of the tremendous need that many of those students have and others who would like to be students have, but cannot meet.

So I am not saying that low tuition is an answer, but I think that in this discussion, there has been a tendency to undervalue the impact of cost and convenience, as well as curriculum choice.

I know that some of the institutions I am familiar with, some of the areas I am most familiar with in my own State, the establishment of a community college in the community with a wide range of technical and vocationally oriented programs, more career education, oriented to specific skills and professions and so forth, had a tremendous impact on attendance.

Dr. GORDON. Yes. That is what we believe, of course, and that is why we recommended that there be a community college within reach of about 95 percent of the potential students.

Mr. O'HARA. You know many people complain now, in fact we have heard the complaint here that the effect of our student assistance policy, State and Federal, has been to make it easier for a low-income high school graduate to go on to post-secondary education than it is for a middle-income type of graduate. I know that those fears are sometimes overstated and exaggerated, but I think there is something that we don't take into account in these student assistance programs.

Essentially, what we are trying to do is put the low-income student in the same relative position that the middle-income student is in really and we are trying to say, all right, your family income is very low so we are going to provide you with funds to go on to school. But

I am not so sure.

Let's take a student from a family whose income is under $5,000 who is eligible for a BOG grant at full funding. So let's say that BOG grant amounts to $1,400. All right.

Dr. GORDON. Provided he goes to an institution that costs $2,800. Mr. O'HARA. OK, an institution that costs $2,800. By the way, I agree with your recommendation on that, that the 50 percent does discriminate. If the boy goes to a community college he gets $15 instead of $1400. In any event, here we are, he comes from a family with less than a $5,000 income, so he gets the $1,400 and off he goes.

Let's take the boy from a family, not with $5,000 but with a $15,000 income, does his family really have $1,400 to contribute to his education?

You see, I don't think that most $15,000 families do. In other words, we have this situation

Dr. GORDON. Especially if there are two or more children.

Mr. O'HARA. Sure. But not only that. They have a choice. You see, when you say to the $5,000 family "We are going to give you $1.400 but you must use that $1,400 for the purpose of sending your child to school, you can not use it to buy a dishwasher, or you can not use it to move the family into a house where the roof does not leak. The only purpose for which you can use this money is for the education of your youngster."

I think that youngster may in that sense have more money actually at his disposal to finance his education than the child of a $15,000 family.

Dr. GORDON. Well, I think that, in the course of my remarks, I did suggest that the eligibility standards should be relaxed somewhat in the BOG program and that perhaps we should try to restructure student aid so that work/study and loans would be more readily accessible and on a more equitable basis to students in middle-income families.

I would like to point out, and this is something I have in my prepared testimony, but did not have time to go into, that one gets a somewhat erroneous impression from one of the charts in the report of the National Commission on Financing of Post-Secondary Education, which shows a sharp drop in the enrollment rate for the group with $10,000 to $15,000 family income in constant dollars between 1967 and

1972.

When I saw this, I wondered what would happen if one recomputed those figures in terms of family income quintiles, that is dividing all families into fifths in terms of income levels, and I discovered that the only income group in which there was a drop in enrollment rates between 1967 and 1972 was the two highest quintiles-which had to be combined because of lack of sufficiently detailed data, and for the other three quintiles there was no drop.

You will find the figures in my statement. What was happening in that period, so that a family with $10,000 to $15,000 in constant income family income level, the higher the rate of increase in income over

that period, so that a family with $10,000 to $15,000 in constant income was falling in the income distribution in those years and occupied a relatively lower place in the income distribution in 1972 than in 1967. Nevertheless, this does not dispute the fact that undoubtedly young people from middle-income families have had to take more part-time jobs and do other kinds of things to finance their college education in recent years. However, the statement also makes the point, that if one looks at the decline in enrollment rates shown by Bureau of Census data, over the period from 1967 and 1973, one finds that the really sharp drop after 1969 was among young white males. This suggests that of the various factors inhibiting college enrollment, that is, the high cost of attendance, changes in the job market for college graduates, and other factors, that the change in the draft situation was probably very important.

It is hard to explain this sharp drop for young white males, not accompanied by a correspondingly sharp drop for women and for blacks, unless the change in the draft situation was a major factor.

Mr. O'HARA. Well, those are good points and they do very likely modify that, so I think it makes a more valid comparison than the chart, the study, the report of the Commission.

With respect to the other question I raised about which of those two hypothetical high school graduates has more money available for his higher education, for college education, I really think that, or I persist in thinking that perhaps the full funding level, at the full funding level, the one from the lower income family would have more money available for that purpose, to spend on a college education. Maybe another way of aproaching the whole need-based thing is to take the median income whatever it may be for any given year and through surveying techniques determine what the median income families actually contribute to their children in higher education and then make up that difference.

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