We would also suggest that the year to year cost-of-living increase factor be built into the authorization for these programs so that no grant is lost to inflation.

Speaking now on the administrative aspects of the program, several thoughts come to mind. To us it is very ironic that while the amendments were passed in 1972 for these acts, there is still to be a promulgation of the regulations from the HEW regional offices and yet now we are considering amending these regulations.

Secondly, the lack of information from HEW, both by letter and in person, is making a tremendous hardship on campuses both to students and financial aid officers. At UC, we have had a letter into the Region 9 Office of HEW for 5 months, which has gone unanswered The third point is in terms of counseling. We feel that while there are more Federal programs now, these programs are not known to students until they are in the 11th or 12th grade, but at this point many students have already decided what courses they are going to take and have been tracked into either vocational programs or academic programs.

For this reason we feel that information regarding financial aid programs should be available to students in the eighth and ninth grades, when they are making the decision whether to pursue a vocational or academic course.

Lastly, we would request that a greater allowance be made for the BOG and FISL programs. At the University of California, approximately $2.3 million is spent on these programs. This money does not come from the State, nor does it come from the university. It comes from the student fees; and we would request that instead of students paying for the administration of this program, the Federal Government pick up this cost. Thank you.

Mr. O'HARA. Thank you very much.

I can say, without qualification, there has been no occasion in the brief time that I have been chairman of this subcommittee when I have gotten so much food for thought in such a short period of time and in so few words.

I want to compliment all of you for the way in which you have presented your testimony. I understand Mr. Wong has been trained in these talents by a master, Senator Metcalf. Is that correct?

Mr. WONG. That is correct, Mr. Chairman.

Mr. O'HARA. Senator Metcalf, as you know, is very good at saving a lot in a few words. I can see where you have acquired that from him. Let me review some of your suggestions. I think Mr. Wong, my own feelings before we complete these hearings-I might change my mind as we go along-is that we must have institutional-based programs for student aid officers to put flexibility into the system. Otherwise, it is too inflexible.

There must be a continuation of some form of institutional-based student aid to allow adjustments to particular problems that arise. I don't think we can go entirely to individual entitlement and direct assistance.

I think your suggestions about simplifying grant applications, providing self-computation and the quick method to compute short forms, appropriations, and the effect they have on individual student's entitlement, are certainly worth our consideration.

Mr. Rodriguez made one of the most revolutionary suggestions and I think most worthy of consideration, and that is that we give serious consideration to the value and efficacy of the one-half limitation. To me, when the one-half provisions are operating, especially onehalf of the difference between what the student can scrape up and what it is going to cost is like throwing a 15-foot line to a man that is drowning 30 feet off the dock. There is just no way it is going to help him.

I think we have to look into whether or not those 50-percent requirements are helping the program or hindering. My own suspicion is it is hindering. I will look into that.

I also enjoyed your suggestions with respect to the family contribution schedules. It is the suspicion of a number of us on the committee-Mr. Dellenback and I particularly-that the BOG family contribution schedules have been arranged, not with an eye toward the contribution in the words of the law that could "reasonably be expected," but instead, with an eye toward reducing the eligible population and cutting down the cost of the program.

Indeed, those figures are not what could reasonably be expected. They are a long way from what could reasonably be expected, and we think in this way the program has been distorted and changed from the intent that Congress had.

The statements made by Mr. Rodriguez and Mr. Altschuler about the State-by-State allocations opens up a new area of inquiry to me. I hadn't really heard much about that until now, and I will see to it that the committee looks into it.

I would like to explore, Miss Maciejewski, your suggestion about eliminating the guaranteed student loan needs test and your point that the student is the borrower, not the parent, and a similar suggestion by Mr. Altschuler that we exclude a larger portion of the parental assets on the BOG form.

There is one of the members of this subcommittee who suggests, and he can put forth a very forceful argument, that we ought to eliminate the entire assets computation; that if an asset is income producing, that shows up in the parental income. If it isn't income producing, it shouldn't have any place in the computation of the expected family contribution.

That argument can be made very effectively. Should we expect a student's family to sell the family home in order to finance the education of the child? Maybe in a perfect world where education is valued above all other activities, we ought to expect that, but unfortunately, my generation doesn't value education that highly, and I think it is unrealistic to expect one to sell the family home or car in order to finance the education. I don't think we are talking about people that are sitting there with $500,000 worth of stocks and bonds. If we are, of course, the stocks and bonds would produce income, and that shows up over on the income side.

I think there is much to be said for your suggestion that we would have to look at the parental financial situation only if the parents are going to make the repayment. If the student is going to be making the repayment, that is another matter.

I am going to have to take off for the Supreme Court. I don't know if they are deciding my reelection over there today or not, but it is

a matter that is of great concern to the schools in my congressional district, and we are a party to the suit, so I do want to get over there. I hope you will stay around when I adjourn this hearing in a few minutes. We have both the majority and minority staff members of the subcommittee present.

It may be that it is more useful talking to them than it is talking to us. I do hope that you will stay and talk to them and tell them about your concerns and discuss the points that you have brought up in more detail with them because they are going to be helping us as we go through this.

Finally, let me say that I congratulate the Student Lobby. I want to see you become an effective political force. I think you are doing just right. I was very impressed with the questions that I was presented with when representatives of the Student Lobby visited my office yesterday.

You have zeroed in on matters before the Congress that are of direct concern to students, not only the student assistance questions but questions having to do with air fares and especially minimum wage.

You are zeroing in on those matters that affect students personally and deeply, and I hope that you will continue on in that effort, that you will keep box scores on Members of Congress.

Students now, with the 18-year-old vote, can become very effective political force. You haven't been so far. I hate to have to tell you that. But there is only one district that I know of where you had a real impact in the last election, and you had a very strong one there.

Students have to be provided with a political memory. They know what Senator so-and-so is saying this week, or said last week, but they can't remember because they weren't politically oriented, what he was doing last year or the year before that.

You have got to provide the memory for them. You have got to inform them not only what Senator so-and-so is saying today, but what he was doing last year, 2 years ago, and 3 years ago; what he was doing when votes came before the Senate, and Members of this House the

same way.

Students can be a very effective political force, and I think we will have a better political system when they do.

Thank you very much for coming. I am going to have to run as fast as my aged legs will carry me if I am going to get a seat at the

court.

The subcommittee stands in adjournment, subject to the call of the Chair.

[Whereupon, at 9:35 a.m. the subcommittee adjourned, subject to the call of the Chair.]

PREPARED STATEMENT OF LEE ALTSCHULER, CO-PRESIDENT, UNIVERSITY OF

CALIFORNIA AT BERKELEY

Mr. Chairman and members, my name is Lee Altschuler and I am Student Body Co-President at the University of California at Berkeley. I am speaking to you today in my capacity as chairman of the nine campus University of California Student Body Presidents' Council. I am very pleased that you have allowed us the opportunity to speak to you today about student financial aid. There is no issue that has been more important to our organization during the last years than securing adequate levels of student aid.

I would like to divide my testimony into three portions in order to discuss our thoughts on 1) Basic Opportunity Grants program (BOG) 2) The three

traditional aid programs NDSL, CWS, and SEOG and 3) the Guaranteed Student Loan program.

BASIC OPPORTUNITY GRANTS

On the whole we have been very pleased with Congress' willingness to expand student aid and particularly with their commitment to the Basic Educational Opportunity Grants program. This program holds great promise in terms of opening higher education to many previously excluded as well as increasing students' freedom to choose among different schools. We all know, that the BOG program will be just another hollow promise unless adequate funding is provided. My purpose today, however, is not to discuss levels of funding, for, we already know what amount of money will be needed to make BOG work, it's up to Congress, with all the support student groups like ours can muster, to make sure sufficient funds are available.

I would like to speak to you briefly, however, about an administrative aspect of the BOG program that is causing some serious problems in our system and suggest to you how we think you can correct this problem.

In California, there are now three different ways to apply for student aid, each with a different set of deadlines and dates when awards are announced. For a typical UC student applying for all available forms of aid this means A) Applying for California State Scholarships by November 20 of the year preceeding enrollment; this also includes filing a College Scholarship Services Parents' Confidential Statement; B) Applying for institutional aid controlled by the University (CWS, SEOG, NDSL) and filing another PCS by January 15 of the school year preceding enrollment; and C) This year waiting until April 1 for BEOG applications to be available so he can fill out still another type of parent financial statement and wait for another six weeks to find out his eligibility.

Meanwhile, if he/she plans on being a first time freshman at UC he must have all applications in by March 1, long before he has an idea of the amount of aid he will be receiving (if any). The programs mentioned above in "A" and "B" announce awards in April. Since they don't know for sure what the BOG payments schedule will be they can only estimate BOG eligibility for students and adjust his award accordingly. All this is done before the student applys for BOG, receives any notification of his eligibility, or in some cases, before he even knows he was supposed to apply for some program called “BOG".

All this is very confusing and trying for students, their parents, and for our school's financial aid officers. The red tape involved here also results in less California students applying for BOG than would if there were not such a confusing array of programs with deadlines scattered throughout the year.

In order to relieve some of this confusion we would like to suggest the following change in the administration of the BOG program. If Congress and the Office of Education could agree early enough in the year on what information will be required on the BOG application form, it would be possible for the CSS-PCS and the ACT financial statements to request the same information. If in conjunction with this change, agreement on the payments schedule for BOG could be arrived at by November 1, of each year. It would then be possible to notify students and the schools to which they are applying of exactly how much BOG money will be available for that student at the same time as other data is developed to determine his/her eligibility for state and/or institutional aid programs. Since all students at UC applying for institutional aid are required to file a CSS-PCS form, this change would eliminate much confusion and improve the institution's resources. Similar benefits would flow to the other public and private institutions in California since they operate on very similar calendars.

Another aspect of the Basic Opportunity Grants program that I would like to touch on concerns the family contribution schedule. While we were pleased to see that the Office of Education agreed to modify the treatment of social security and veterans benefits in certain circumstances, we believe that still more changes must be made if the BOG program is to meet the needs of many students. The present BOG family contribution schedule is so constructed as to almost entirely exclude students with family incomes above $12,000. While we recognize that this is a deliberate decision designed to ration the limited funds in the basic grant program, we cannot allow it to continue if we wish to see the BOG program become the real foundation of support for equal access to post-secondary education. The current family contribution schedule excludes many members of the middle class ($12,000-$20,000 yearly incomes) from receiving aid that

they really need. The combination of galloping inflation and the unreasonable expected family contribution schedules of BOG program and the College Scholarship Service-PCS are causing severe financial problems for middle income families and students. The situation is forcing families into debt or drastically cutting back their life style and is forcing students to shoulder huge loan debts by the time they graduate.

Let me illustrate my point with an example from the University of California. This year there were 80,000 undergraduates in UC and approximately 25,000 received need-based institutionally controlled financial aid. Of that 25,000 roughly 7000 were freshmen. Of those 7000 eligible to apply for BOG, only 577 received BOG awards for a cumulative total of $136,000. Remember, that is 577 out of 7000 who were deemed needy enough to receive institutional assistance of some kind. Clearly there is something wrong with the parents contribution schedule.

We recommend that a fairly efficient and uncomplicated way to solve this problem can be found by examining the treatment of a family's assets, for it is here that middle income families are hit hardest. We think the solution lies in increasing to at least $15,000 and perhaps to $20,000 the amount of parental assets excluded from the family contribution schedule. This would cover the bulk of the highly non-liquid assets tied up in home ownership. California is characterized, unlike some other parts of the country, by single family, owneroccupied suburban housing. The current contribution schedule discriminates against California's common life style. A change in the treatment of non-liquid parental assets could do much to open the BOG program to the middle class, a group increasingly in need of aid. We hope you will consider these changes soon enough so they might be implemented for the 1975-76 academic year.

One final aspect of the Basic Grant program, and this could apply to all other aid programs as well, concerns the level of student and parental awareness of the existence of and amount of aid available through federal aid programs such as BOG. If BOG is to have a real impact on increasing access to postsecondary education for low-income and minority students, a great deal of work needs to be done in the early years of high school with students and their families. It is often during the 8th and 9th grade that low-income students and their families make conscious decisions that affect a student's ability to go on to postsecondary education. Students, parents, and counselors often decide that its useless to talk about or plan for college in light of the poverty of a student and his family. Thus decisions are made for non-academic high school programs high school programs which leave a student unprepared for and unqualified to be admitted to many colleges such as UC.

We believe that the Office of Education, colleges and universities, and high schools across the country should team up to develop and implement programs. that would train entry-level high school counselors about financial aid and how that information can be communicated to students and their parents. The emphasis should not only lie with 12th grade counselors, for by then it may be too late to reach many low-income students. Energy should also be focused on 8th and 9th grade counselors. Efforts should also be made to reach students and parents directly to be sure that they are not left out if counselors prove inadequate for the task.

We shope Congress would encourage this kind of activity by the Office of Education and investigate how states and school districts may be encouraged to cooperate in this effort.

CATEGORICAL AID PROGRAMS

The next portion of my remarks concern the three categorical aid programs: administered by postsecondary institutions-College Work Study, Supplemental Educational Opportunity Grants, and National Direct Student Loans.

Our main concern in this area is the fact that the "freeze" on any increase in funding for these programs, coupled with the increasing number of institutions applying for and receiving such funds and the impact of inflation on these limited funds, is resulting in a yearly decline in the absolute number of dollars available under these programs for students at the University of California. We have experienced a drop of $919,000 when our 1973-74 allotment compared to our 1972-73 total. We have only received $136,000 in basic grant funds to offset this loss, so our net loss was almost $780,000. This situation is also occurring at the California State University system and at numerous private colleges in California.