Mr. CONLON. We haven't set any guidelines as to the amount. It could be installment loan, savings, checking. It could be Master Charge. It could be any of the savings offered by the bank.

Mr. LEHMAN. I just was wondering how it was interpreted.
Certainly your delinquency rate is great.

I just hope that the banks are not guilty of being too rigid in trying to keep the delinquency rate down and in turn of course rejecting some of the marginal, yet very needful cases.

Mr. CONLON. Mr. Chairman, I would like to point that since September, 1971, we haven't had the first turndown.

Mr. LEHMAN. That's a pretty good record.

I think that's all. I think you're doing a good job. I think that your problems in regards to skip assistance are valid, and I think that we can consider these kinds of factors when we deal with this legislation. The majority counsel and the minority counsel would like to ask some questions.

Mr. FRANKLIN. I would like to second the Congressman's comments and congratulate you on your participation in the program. Not only are you staying with it, but actually increasing, quite heartening in view of the experience that some students are having.

I don't have any questions.

Mr. LEE. I'm fascinated by the delinquency rate. As you're probably aware, with these kinds of loans there's indication that the rate of delinquency rate is significantly higher than some other kinds of loans.

Can you explain or tell us anything you might be doing which accounts for your institutions low delinquency rate that is not enjoyed by other lending institutions.

Mr. CONLON. I wish I could. The only thing I can tell you is effective collection activity. There are 188 people in the installment loan department, and 35 are in collections. Our philosophy, when we opened the doors 24 years ago, was that you have to collect the loans before we can make them.

All I can tell you is it's just plain, simple, hardnose, effective collections.

Mr. LEHMAN. With a lot of experience in other fields.

In regards to this $14 million limitation, is there any chance of making that a little more flexible as time goes on if we can make the Federal legislative incentive a little more inviting?

Mr. CONLON. Absolutely. That's why we increased it now. We realize that $838,000 and the upcoming semester coming in September we'll probably go beyond the point of original commitment. So we've advanced the commitment already. I see no reason why we wouldn't continue to advance the commitment-credit commitment on that business that we have.

Mr. LEHMAN. Well, thank you both very much. We appreciate your coming down and taking time from your busy schedule to give us the institutional side of this question, and we'll certainly take all this information back to Washington with us.

I have two other witnesses here who are not on the agenda, but I think it's important that we hear a third side of this problem. Mr. and Ms. Robert Whitehead spoke to me during the coffee break,

and I would just like to invite Mr. and Ms. Whitehead to come up to testify briefly as to the problem of the middle income parents with children attending college.

STATEMENT OF ROBERT WHITEHEAD, MIAMI, FLA.

Mr. WHITEHEAD. I hadn't intended to speak, so I don't have the elaborate notes that my predecessors have, but I'm sort of a frustrated parent.

I started last October trying to find some way to get some financial help. My son is going to FSU in the Fall, and every place I wentMr. LEHMAN [interposing]. Mr. Whitehead, would you identify yourself properly for the

Mr. WHITEHEAD. Oh, yes, I'm Robert Whitehead.

I ran against a stone wall it seemed like every place I went because I wasn't a minority group or belonged to a minority group.

It seems to me the Government has set some type of a limit on your income. A man making $15,000 or $17,000 a year, deduct 20 percent or more for taxes, $3,000 a year for the tuition, and then you're getting down on $8,000 or $9,000 he has left.

If he has other children, they have to go without certain things, maybe clothing, something else, to put one through school. If you have two going through school, then you're reduced to the poverty level even though you started out at a $16,000 salary.

One thing that bothered me in these hearings this morning, bothered me for 6 months, is nobody mentioned scholastic ability anymore. I know when I was a teenager, 100 years ago, the scholastic ability-I have a son who's 15th in a class of 675. He's also an excellent musician, and I just can't get anywhere on scholarships because of his musical ability or his scholastic ability.

I think it's fine to take people from underprivileged sections of the town and say we're going to give you a grant to go to school, but how about the person who, like my son, would love to become a doctor or become a worthwhile member of society? What does he do?

I would like to see something in the Government where scholastic ability has something to do with it. We get grants for football and basketball, but you don't hear too much about the person who has a high scholastic average.

It's kind of frustrating. I didn't know about this federally funded student loan program. Now, I asked at the high school-my son goes to Hialeah Miami Lakes High School, and they knew nothing about any kind of a fund.

I happened to listen to WKAT one day, and there was a Mr. Simmons, I think, from HEW on, and I called him in Washington, and that's where I got the information.

He told me I didn't know about the First National Bank-he said that Dade Federal is the only one in the Miami area participating in this student loan program. Evidently these programs are changing so quickly that the high schools haven't been kept up with it.

Mr. LEHMAN. Can I interrupt you? Our office mails out to the guidance counselors of each of the high schools each May a stack of bulletins and information in regards to all types of student aid for higher education.

Now, if they don't feed down from the guidance departments in high schools, somewhere along the pipelines this information gets short-circuited.

Mr. WHITEHEAD. It does because I asked my son-I thought maybe he was just putting me off, and I went to the school myself, and they said, oh, forget it, you make too much income.

Mr. LEHMAN. If your son will go to the guidance department at Miami Lakes Senior High School and if he will ask the guidance people to give him copies of the bulletins we've mailed from our office, I think he will find them there, but it's a shame he has to go to them to ask.

Mr. WHITEHEAD. Well, I've been to them, and they didn't have it. Like I say, if I hadn't listened to this radio program, driving along in my car, I wouldn't ever know anything about this.

Mr. LEHMAN. I'll check into that and find out what happened.

Mr. WHITEHEAD. But I think that should be pushed in the high schools, not wait until the person gets out. I wish they would raise the limit-I think it's $15,000 now-adjust it to-especially the way the inflation is now-to maybe $20,000 because when you get done with taxes and your tuition, you're down-you're getting down to the poverty level as it is.

Mr. LEHMAN. I think the limit should be removed, although it's not feasible at this particular moment.

Mr. WHITEHEAD. Couldn't it be made on a-also on a worthy basis? If a student in some cases-I know I used to work near the University of Miami, and there were children that had grants there that were just having a ball.

There's other needy children really that have the brain power and want to get somewhere, but just can't-because of their father's income or other things just can't make it, and I wish it could be something more scholastic instead of strictly athletic.

Mr. LEHMAN. I think the whole purpose of this meeting basically is to get information on how to make assistance student financial more available to the young people from middleclass families who seem to be dropping by the wayside and are probably one of our great natural resources that we must make available to our society in order to keep it going in the right kind of direction.

Mr. WHITEHEAD. Because I have a grocery store in Miramar and have about 6,000 people coming in, and their biggest complaint is that the middle-income person pays all the taxes, and then when it's coming back, we don't see that much of it.

Mr. LEHMAN. It's a familiar complaint, and we get mail like this in Washington, too.

Mr. WHITEHEAD. I would appreciate it if you could do something along those lines.

Mr. LEHMAN. I'm glad you could testify, and as soon as we can come up with any positive answers to these kind of problems, we're going to be you know. In the meantime I will follow through at Miami Lakes, and if you'll give one of our staff people your son's name, we'll see that he gets all the information.

Mr. WHITEHEAD. Well, I've already called your office in Washington. I forget the girl I talked to, but she was very helpful and was going to mail it to me this week.

Mr. LEHMAN. In the meantime I would like to find out why it isn't being processed, not to your youngster, but to the others at this particular school. I just want to see what's happened to all of this material we mail out.

Mr. WHITEHEAD. I don't know what happens to it.

Thank you, sir.

Mr. LEHMAN. Mr. Franklin, John, do you have any questions? Mr. LEE. Did you have a chance to talk with people at the University?

Mr. WHITEHEAD [interposing]. FSU.

Mr. LEE. Yes.

Mr. WHITEHEAD. Yes; but they didn't know any bank in the Dade County area that I could contact until I heard this radio program. Mr. LEHMAN. Now you know one.

Mr. WHITEHEAD. Well, yes, but you have to be a-have to have a deposit there or be a member of the bank, and it's kind of hard when you live in Hialeah to get down to Miami, but Dade Federal is the only one that the Federal Government mentioned.

Mr. LEHMAN. Well, John, you have Southeast branches-Southeast Bank branches that you do business through besides the downtown branch?

Mr. CONLON. Miami Springs.

Mr. LEHMAN. I'm sorry?

Mr. CONLON. Miami Springs.

Mr. LEHMAN. That's getting closer.

Mr. CONLON. Southeast Bank of Miami Springs.

Mr. LEHMAN. Any Southeast Bank branches can do the same thing as the downtown bank can.

Mr. WHITEHEAD. Oh, I see.

Oh, if you do have a chance at HEW, I would tell them to mention that in the literature that there is another bank in Miami because they definitely told me there was only one, and that's Dade Federal. Mr. LEHMAN. That's communications again.

Mr. WHITEHEAD. One thing about Dade Federal that I think has it over this gentleman's bank, that you don't have to have an account there. They said they would process it whether we had an account or

not.

Mr. CONLON. The difference is they're not a bank.

Mr. WHITEHEAD. Well, savings and loan.

Mr. LEHMAN. Mr. Franklin, do you have any questions?

Mr. FRANKLIN. No.

Mr. LEHMAN. Well, thank you very much for coming.

We have a gentleman here from the State Department, and I would like for you to come up identify yourself and give us a little input from Tallahassee.

STATEMENT OF ERNEST E. SMITH, JR., FLORIDA STATE

DEPARTMENT OF EDUCATION

Mr. SMITH. Thank you, Mr. Lehman. I apologize, like Mr. Whitehead, for not having a prepared statement. I guess due to our travel situation in Tallahassee it was not certain that I was going to be able to make it.

I have previously testified before your subcommittee in the month of earlier this month in Washington with respect to concerns which we have in Florida as a lender, the fourth side of this coin, as a lender under the federally insured student loan program.

As you have indicated, we would agree with the fine success Mr. Conlon and the First National Bank of Miami have had in the program. If each bank that we hear about had those same experiences, I'm sure that, outside of the profit factor, that there would be no problem getting ample participation in the program.

In Florida we became-sought to become and sought to begin participation as a lender under the federally insured program to supplement the fine participation of banks and savings and loan associations and credit unions in the State.

We find that in Florida, while participation in Miami may be great, there are some areas in Florida where there is no access to these loans, and our purpose in getting in was to supplement statewide the activities done by the commercial community.

We have been in the business since-in the business of making federally insured loans since October 1972. We estimate that by June 30 we will have an outstanding of $4.5 million.

The program was approved by the people of Florida in 1972. We have issued bonds to finance our participation, and we feel that we've made at least that much of a contribution so far.

We anticipate that the demand that we feel in Tallahassee for these loans will be increased by the changes in effect June 2, 1974. We're getting roughly 56 applications a day presently in our office. Those will be my comments about where we are are today if we stay with the program as it is.

We do feel that two real concerns that we would like to ask for help in if it's appropriate or for your subcommittee to consider.

No. 1 is the lengthy turnaround time that we-that Mr. Conlon alluded to. We saw an average of 14 weeks in a turnaround time in securing an insurance commitment. We feel that in many cases this is not what you intended in terms of the spirit of the law, and in most cases is counterproductive to students. We like people to plan ahead, but 14 weeks is a little too much to ask.

We also have benefited from the amended procedure of bypassing the regional office in Atlanta, working directly with the contractor in Kansas City. We further feel, however, that for lenders that are of large size that you might wish to consider recommending that the Office of Education implement the certificate of comprehensive inSurance which is provided for in the law whereby you would simply give us a blanket insurance policy for a lump of money, and then we could, with stringent guidelines from the Office of Education, begin to charge loans against that lump sum policy and then later, maybe twice a year, go back and ask for an extension to that policy, rather than each individual loan.

This logistically requires a lot of time, and it requires a lot of money. We are obviously in the business for different reasons than a commercial bank, so we're not that concerned about the profit picture. Of course we don't want to operate at a loss, and presently we're not operating at a loss.

The second point would be the-when I spoke earlier in June, there was a great thing looming on the horizon, circular A-70 through the