A r c h i v e d  I n f o r m a t i o n

Likewise the U.S. Department of Education has a limited but very important role -- a role that citizens of this country recognize and espouse. Indeed, recent polls show the public's strong support for the Department.

• When asked how necessary they think the federal Department of Education is, fully 80 percent of respondents said that the Department is necessary; 70 percent believe it is "very necessary" (NBC/Wall Street Journal, January 1995).

• In a poll released just last week, over three-fourths of the public (77 percent) oppose eliminating the U.S. Department of Education to cut the deficit. Public opposition to eliminating the Department was indeed higher than opposition to reducing cost of living adjustments in Social Security. The same percentage (77 percent) reject cuts to student loans and other education programs to reduce federal spending (Time/CNN, May 1995) (Chart 1).

1. Increasing Access to Postsecondary Education

   As college becomes more and more expensive for average Americans, the Department provides 70 percent of all student aid, about $32.5 billion, to give students greater access to postsecondary education -- the best system in the world. Pell Grants assist 4 million low income students; student loans help 6.5 million low and middle income students; and Federal Work Study provides aid to 700,000 students each year.

2. Helping States, Communities, and Schools Raise Academic Achievement and Meet the Needs of their Students

   The Department delivers almost $15.4 billion to states and school districts to assist local elementary and secondary schools in providing a solid education to all children. The Goals 2000: Educate America Act (endorsed by every major business, parent, and educational organization) supports community and state efforts to raise student achievement to world-class levels. The Title I program directs about $7 billion to more than 6 million children who attend our highest poverty schools, to strengthen the teaching of basic and advanced skills. These programs represent a partnership between the U.S. Department of Education and the states in which we provide incentives for school reform and states and communities set their own goals and plans for improving student achievement. The Department spends nearly $3 billion to help communities meet the educational and developmental needs of over 5 million children and youths with disabilities. Additional support goes to help teachers improve their skills, build public-private partnerships to get technology into the classroom, and help schools become safe and drug free.

3. Facilitating the Transition from School to Work

   The School-to-Work Opportunities Act provides seed money to help states and local communities prepare youth for good careers and equip them to learn for a lifetime through partnerships of schools, businesses, and community leaders. All states received grants in 1994 to develop strategies to build School-to-Work systems that meet the needs of their students and economies. By the fall of 1995, over half of the states will have received one-time five-year grants to build these school-business partnerships. The Department proposes to refocus the Perkins Act on helping prepare more young people for good jobs out of high school and for further education.

4. A Clearinghouse of Good Ideas and a Catalyst for Improvement

   In every state and community, educators and families are learning about effective ways of teaching and learning through Department-sponsored research, evaluation, and technical assistance. The Department helps people identify what works and learn about the most promising strategies for improving their schools and their children's performance. Statistics on national trends and indicators of performance, such as the National Assessment of Educational Progress, keep the focus on areas of educational growth and on areas needing improvement. The Department is investing in more effective and efficient ways to share the good ideas through 1-800 numbers, e-mail, and the Internet. The Department responds to almost 1,000,000 information inquiries a year, providing 48-hour turnaround on answers.

5. A National Voice for Education

   The U.S. Department of Education is a voice for excellence and progress, a voice that speaks to the public at large as well as within the cabinet. The 1983 report A Nation at Risk focused public attention on the centrality of education to America's future as a world leader. All previous Education Secretaries, both Republican and Democrat, have called for strong academic standards of the kind that the Goals 2000: Educate America Act now supports at the local and state level. Most recently, through the initiative of Secretary Riley, over 120 organizations have come together in a "Family Education Partnership for Learning" to support the American family, the foundation of a solid education. This initiative has been accomplished without creating a single new program or spending additional funds. As an outgrowth of the partnership, the Secretary has launched a reading and writing initiative, the kick-off of which he announced yesterday to encourage parents, other adults, and older students to read with younger children this summer.

• Students are taking tougher courses. By 1992, the proportion of high school graduates taking the core curriculum recommended in A Nation at Risk (4 years of English, 3 years of social studies, 3 years of science, 3 years of math) had increased to 47 percent, up from 13 percent in 1982. The average number of credits in these courses taken by seniors has also increased (Chart 2).

  More high school students are taking worthwhile math and science instruction as a result of state, district, and school standard-setting, assessment, and related activity. Raising standards has increased enrollments in core courses such as mathematics and science without weakening course content or driving up dropout rates, according to analysis of experience in various parts of the nation and aggregate results. Recent reports indicate that the trend is continuing. The New York Times (May 9, 1995) reports that tougher graduation requirements in New York City public schools are spurring thousands more high school students to take and pass college-preparatory mathematics and science courses.

• Participation in the Advanced Placement (AP) Program has increased dramatically. Since 1982, the number of participants has risen from 140,000 to 450,000, and the percentage of students participating has also increased sharply. Especially impressive is the growth in participation on the part of minority students. In 1994, 28 percent of AP candidates were minority students, compared to 13 percent in 1982 (Chart 3).

• Achievement is up, particularly in math and science. On the National Assessment of Educational Progress (NAEP), student performance has increased since the 1980's in science and math. The trend in reading has generally shown improvement (Chart 4). Results from national longitudinal studies show that the math performance of high school sophomores improved between 1980 and 1990, consistent with tougher course-taking.

• Comprehensive school reforms in leading-edge states are showing impressive gains in student performance. For example in Kentucky, a state that has overhauled its entire educational system, 4th, 8th, and 12th graders demonstrated dramatic improvement on 1993-94 assessments over previous years' tests in mathematics, reading, science, and social studies.

• On the SAT, participation is way up and scores have been rising over the past decade. Participation by members of racial/ethnic minority groups increased from 18 to 31 percent between 1982 and 1994. Math scores increased across all race/ethnicity groups from 1982 to 1994. Scores increased by 22 points for Asian American and African American students. Verbal scores increased for all minority groups, including all groups of Hispanic students except Mexican Americans, between 1982 and 1994, although they decreased slightly for white students. (These trend results are unaffected by recent changes made to the SAT program.)

• Dropout rates have declined. Overall, the dropout rate for 16- to 24-year olds declined from 14 percent in 1982 to 11 percent in 1993. Dropout rates declined between 1982 and 1993 by 4 percentage points for whites and 5 percentage points for blacks (although dropout rates for Hispanics remain high) (Chart 5).

• Postsecondary enrollment and attainment have increased to record levels. Over the past decade, enrollment in postsecondary institutions has grown steadily. The proportion of people ages 25 and over who have completed four or more years of college increased from 18 percent in 1982 to 22 percent in 1993. The proportion of minority group members (ages 25 and over) who have completed four or more years of college increased from 12 percent in 1982 to 18 percent in 1993.

Nonetheless, a great deal of work lies ahead. Though we have turned the corner, many of the nation's schools continue to lag behind some of our chief economic competitors -- this is a substantial cause for concern. The Department intends to be a supportive partner in helping states and communities accelerate the pace of school reform and encourage improvement throughout the country.

David Kearns, former Deputy Secretary of the Department and CEO of Xerox, recognized these problems and began to address them by introducing management techniques of continuous improvement that were successful at Xerox. Under the direction of the current Deputy Secretary, former Governor Madeleine Kunin, we are turning around our management problems. To accomplish these improvements, we are listening to our customers' concerns, focusing on our critical mission through strategic planning, and using our strategic plan to transform the way we function as a department. We are well on our way to becoming a performance-driven organization, one that is a leader in implementing the Government Performance and Results Act (GPRA). To that end, we are using strategic planning to help us streamline our programs, operations, and personnel.

The strategic plan has established four clear priorities. The first three priorities in the plan focus on our programs and initiatives and build upon new legislation -- Goals 2000, the Improving America's Schools Act, School-to-Work, and Direct Loans:

1. To help states and communities enable all elementary and secondary students to reach challenging state and local academic standards.

2. To help states and communities to create a comprehensive School-to-Work Opportunities System in every state.

3. To ensure access to high-quality postsecondary education and life-long learning.

   To accomplish these priorities requires a fourth priority:

4. To transform the Department into a customer-responsive, high-performance organization to support the three substantive priorities.

• Between 1994 and 1998, the proportion of students who meet or exceed proficiency levels in reading and math on such measures as the National Assessment of Educational Progress will increase by 10 percentage points.

• By 2000 at least 450,000 youth, 50 percent of high schools and community colleges, and 50,000 employers will be participating in School-to-Work Opportunity systems. Participation will increase graduation rates, increase student achievement, increase the number of students completing a postsecondary certificate or degree program, and increase the number of students prepared for and participating in career ladder jobs.

• When fully implemented, the Direct Loan program will save taxpayers more than $1 billion a year.

• By 1998, the Department will have implemented a redesigned, integrated financial management system that substantially reduces costs, automates functions now processed manually, enhances reporting capabilities, and improves program delivery.

• Between 1996 and 2000, we propose to save $12 billion through accelerating the Direct Loan program to 100 percent of new loan volume by 1997-98. This phase-in of the program will enable all schools and student and parent borrowers to take advantage of the Direct Loan program's simplicity and flexibility (Chart 6).

• We have decreased the student aid default rate (Footnote: Cohort default rate: The percentage of student aid borrowers entering repayment status in any given year who default by the end of the following year); we have lowered it from a peak of 22 percent to 15 percent, and we intend to keep driving it down even further (Chart 7).

• We have increased our student loan collection efforts, principally through the tax refund offset program -- in 1990, defaulters returned $879 million to the federal government; in 1994, we collected $1.5 billion. The cost to the taxpayer of defaulted loans has been cut in half (Chart 8).

• In our FY 1995 and 1996 budgets, we have proposed eliminating 59 education programs and consolidating 27 others for a savings of $4.6 billion by 2000. During the coming year we will propose ways to substantially further reduce the number of our programs.

• The Department is saving an additional $100 million by reducing our personnel from 5,131 in FY 1995 to less than 4,700 FTE (about 9 percent) by FY 2000

  This reduction is from a staff that had already decreased to significantly less than the 7,700 employed in 1979 by similar offices within the former Department of Health, Education and Welfare and six other agencies.

  Moreover, our Department is already efficient. We have the smallest ratio of employees to grant volume in the government: 1 employee per $6 million. And our administrative costs are low: just 2 cents of every Department dollar.

• We are implementing streamlining plans that cut supervisory layers, reducing the ratio of supervisors to staff by more than one-half by 1999.

• Sometime in the next few months we will announce plans to substantially reduce the number of senior management officials and offices.

• We will soon complete pilots that delegate most personnel classification and hiring authority from the central personnel office to line managers, reducing red tape and laying the groundwork for shifting these responsibilities to line managers throughout the Department by FY 1996.

• All SES employees now have performance agreements that reflect how they will contribute to implementing the strategic plan.

• We have engaged employees in revamping our operations through the "low-hanging apples" team, which addresses cumbersome but easily resolved management problems that impede progress. The team has over 100 recommended to improve efficiency and effectiveness, and most of them have already been implemented.

• The Department is using technology effectively to connect all employees electronically by the end of 1995, improving communication and helping our staff to work even more efficiently.

• We have reached out to talk with hundreds of customers and have reviewed every single Department regulation.

• Today we eliminated 88 of those regulations -- 399 pages in all. That's 30 percent of our total regulations.

• We have targeted dozens of other regulations for elimination, reinvention, and simplification, in consultation with our customers and partners. Our action on them will be announced shortly as part of the President's regulatory reform initiative.

• Some of our most significant programs, including School-to-Work and Goals 2000, have been implemented without issuing a single regularion.

• Regulations for the Improving America's Schools Act (IASA), passed in October by the last Congress, have been kept to a bare minimum beyond those mandated by Congress. Most IASA programs have no new regulations; of 49 elementary and secondary programs, 38 will need NO regulations, 7 will require limited regulatory guidance, and only 4 will need full regulations to carry out the program. For most, instead of regulating we're providing clear, practical information to help states and districts implement the new law.

• To protect students and the taxpayers' investment, we are targeting our oversight regulations and activities on abuses, where rules are needed. An example of our performance-based approach is in the area of student aid. We have to ensure that schools have the means to provide refunds to students who withdraw. We scrapped a burdensome proposed rule that would have required all 7,300 colleges and universities to set aside a reserve fund to cover refunds, and instead require only the handful of schools with a history of refund problems to provide a letter of credit.

• In student aid we have eliminated duplicative forms, excessive parental signature requirements, and hard-copy reports where electronic transmission would work better for everyone. For example, by replacing paper Student Aid Reports with an electronic system, we eliminated 4 million paper forms. In the Direct Loan program, we provide participating schools with computer software, with a direct on-line connection to the Department to help schools get funds to students efficiently.

• We encourage states to submit a single consolidated application for all of their Elementary and Secondary Education Act programs in the Improving America's Schools Act (IASA), not only eliminating paperwork but also promoting comprehensive planning. We expect that almost all, if not all, states will be submitting consolidated applications.

• We have reduced our reporting requirements for states and districts through statutory changes, anticipating the President's request (as part of his regulatory reinvention initiative) that wherever possible agencies reduce the frequency of required reports by 50 percent. In most cases, the legislation has reduced annual reporting to reporting every two or every three years, and the new Title I eliminates statutory requirements for annual performance reports and state evaluations. The effect of changes like these is to let states, schools, and teachers concentrate on program results, not paperwork.

• Ed-Flex, a new demonstration authority for up to six states, provides an unprecedented opportunity to encourage innovation along with performance accountability. The Goals 2000: Educate America Act authorizes Ed-Flex demonstrations that enable officials in the Ed-Flex states, not the federal government, to decide on waiver requests. Oregon, through a simple review process, is the first state to participate.

• The Improving America's Schools Act (IASA) for the first time has a broad waiver authority for most of the Department's elementary and secondary education programs. Waiver requests under IASA have already been submitted to the Secretary. Palm Beach, Florida and the Metropolitan District of Decatur Township, Indiana are the first two locales approved for a Title I waiver.

• The expansion of the schoolwide option for Title I gives all high-poverty schools the opportunity to blend Title I and other federal funds with state and local resources to upgrade the quality of teaching and learning in entire schools and throughout the entire program. In effect, this is a performance-based school grant to the point of actual delivery of services, the school. Upwards of 20,000 schools can take advantage of this option.

• The Charter Schools program provides start-up funds to encourage parents and teachers to create new public schools that can bring energy and new ideas to public schooling.

• The School-to-Work Opportunities Act, along with the Administration's proposals for the reauthorization of vocational education, provide waiver authority to allow states and local communities to integrate the reform of vocational education with broader education reforms and to strengthen the connections between education and training programs.

• Administrative funds consolidation allows states and districts, under the Improving America's Schools Act, to combine their administrative funds for Elementary and Secondary Education Act programs, giving them the opportunity to set their own priorities for administration, technical assistance, and evaluation and eliminating the artificial barriers that have gotten in the way of administering programs effectively.

• In postsecondary education, under Title IV institutions can now submit proposals to the Department to participate as "experimental sites" to try out experimental regulatory and management approaches. For example, institutions can propose that the Department waive requirements in exchange for performance measures appropriate to the institution and the objectives of the regulations in question. Many schools have expressed interest in this new opportunity.

The Student Loan Reform Act created the Direct Loan program to begin replacing the Federal Family Education Loan (FFEL) program, an unwieldy and duplicative system that results in poor performance for borrowers and schools and wastes federal funds. In less than 11 months, 104 schools have begun participating in the Direct Loan program. More than 1,400 schools will participate beginning in July 1995.

Contrary to accusations by special interests intent on maintaining the status quo (Chart 9), the Direct Loan program:

• Will save $12 billion by 2000 under the accelerated phase-in proposed in the President's FY 1996 budget.

• Simplifies loan application procedures, resulting in quicker and more accurate payments to students and eliminating long lines at the financial aid office typical of the FFEL program.

• Reduces costs and improves accountability by eliminating the complicated structure of the FFEL program, with its thousands of financial intermediaries (Chart 10).

• Makes loan processing more efficient and provides for the first time the on-line, real-time information needed to better manage and oversee the loan program.

• Maximizes competition through the use of competitively-awarded contracts to private vendors, eliminating the virtual monopolies certain institutions have enjoyed under the FFEL program.

• The program has succeeded in satisfying the participating institutions: 92 percent of Direct Loan institutions said they were either very satisfied or somewhat satisfied in a recent survey.

• One school said, "Direct Loans put the students back where they belong -- at the center of this business." Another stated that the Direct Loan program "is beyond a shadow of a doubt the way a loan program should have been designed 20 years ago. For those of you who have concerns, so far the Department of Education has just been super!"

• A recent Education Daily survey of first-year schools lauded the Department for quickly answering questions, addressing problems, and being receptive to suggestions about the program.

• In their first report of a survey of community college participants in the first year of the programs, community college trustees stated that "all responses were positive to the question about the Department's management of the program and quality of service rendered."

• Greater Prosperity. In 1992, average annual earnings for those with a bachelor's degree were 74 percent higher than for those with a high school diploma, and 155 percent higher than for those who had not graduated from high school. Similarly, unemployment and poverty rates are lower for college graduates than for high school graduates, and the rates for both groups are much lower than for dropouts. For unemployment, the respective rates are 3 percent, 6 percent, and 11 percent; for families below the poverty level, they are 2 percent, 11 percent, and 24 percent. (Census Bureau, Statistical Brief, August 1994; Bureau of Labor Statistics, 1991; Census Bureau, Current Population Reports, P60-185, 1992)

• Less Welfare. Only 5 percent of college graduates have ever participated in government assistance programs (AFDC, Supplemental Security Income, food stamps, housing assistance, or Medicaid), and only 10 percent of high school graduates have, compared to 24 percent of high school dropouts. Only 1 percent of college graduates and only 3 percent of high school graduates have ever participated in AFDC, compared to 7 percent of dropouts. (Census Bureau, Current Population Reports, P70-31, 1988)

• Less Crime. Although only about 18 percent of the population has never finished high school, this group accounts for 41 percent of state prison inmates and 47 percent of prisoners on death row. (Census Bureau, Current Population Reports, P20- 471, 1993; Census Bureau, 1990 Census; Bureau of Justice Statistics, Profile of State Prison Inmates, 1991; Bureau of Justice Statistics, Capital Punishment, 1992)

• More Civic Participation. Fully 85 percent of college graduates and 75 percent of high school graduates, but only 50 percent of high school dropouts, are registered to vote. In the 1992 Presidential election, 81 percent of college graduates, 58 percent of high school graduates, and 41 percent of dropouts voted. With regard to volunteering, 77 percent of college graduates, 45 percent of high school graduates, and 22 percent of those without a high school diploma do volunteer work. (Census Bureau, Current Population Reports, P20-466, 1992; Independent Sector survey, 1992)

Despite well-publicized claims to the contrary, there has been no "federal takeover" of the state and local roles and responsibilities in education. All decisions about what to teach and how to teach it, including sensitive issues like sex education, religion, evolution, and cultural diversity, are made at the state, district, and school level to reflect what is appropriate for local students and communities. Indeed the Department of Education Organization Act prohibits the Department from exercising any control over curriculum or instruction. Moreover, all of our legislative initiatives have increased flexibility for states and school districts, not decreased it.

The strategies the Department is pursuing respond to the public's needs. With a strategic plan and leadership willing to set ambitious performance targets, we are transforming the Department into a results-driven agency. We are cutting out the red-tape and overregulation that ties government into knots and frustrates customers. We are working with states and communities to develop partnerships that link increased accountability for performance with much greater flexibility. And we will work hard to continue to earn the public's support for improving education and carrying out our mission "to ensure equal access to education and promote educational excellence."

All of these proposals amount to nothing more than moving boxes around on an organization chart, without generating any real savings. In fact, there is a strong likelihood that costs would increase, if the history of the Department's creation, and accompanying reduction in staff, is any guide. When the Department was formed in 1980, it comprised programs that had been staffed by 7,700 people, yet within a few years its staff was reduced to approximately 5,000, where it has remained for the past decade. Merger with another Department would add bureaucratic layers and complexity for our customers, while spreading programs around would lead to duplicated overhead costs and a massive burden on customers searching for assistance and information. The likeliest outcome of any of the proposed changes will be dislocation and disruption of services to states, school districts, and students, along with the loss of a central voice for education (Chart 11). If the federal government remains committed to providing national leadership in education, the small and effective Department remains the best means of carrying out that role.

To quote Secretary Riley, "It is clear that the future strength of our nation lies in the education of our citizens and in how well prepared they are to meet the challenges of the 21st century. This is not the time to walk away from our children and (their) education."

Thank you.