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used equipment programs, research and development funding, and the Cooperative Education Employment program because adequate funding information was not available. Recent proposals for

additional budget cuts in all areas, particularly in the Education Department's (ED) Guaranteed Student Loan program (GSL),

could significantly change this outlook.

If ED's financial assistance programs are excluded, total

Federal support will be reduced by 33 percent because 14 of the

39 programs reviewed are slated for termination in 1982.


those directed at broad educational objectives, five of the six

NSF programs and both the programs providing aid to Land Grant

Colleges (i.e., Bankhead-Jones and Morrill-Nelson) are to be


Agency support for engineering education in fields related

to their scientific and technological missions would increase in

the energy and aeronautics and space areas but would decline by

about 24 percent overall due to elimination of all programs in the environmental protection, mining and minerals, and ocean

engineering areas.


As you have heard frequently, four areas of engineering are considered to be problems : the current and future supply of engineers, the current and future supply of engineering faculty, obsolete instructional equipment, and the focus of engineering curricula. Because these concerns have not been precisely defined and available data are divergent, we did

not attempt a rigorous comparison of current Federal efforts

with current and projected needs. Instead, we have attempted
to generally describe the Federal efforts that appear likely to
influence these areas of concern.

We have found that most civilian agency support for engineering education relates to the supply of engineers. Much less of that support relates to faculty shortages, obsolete instructional equipment, and engineer ing curricula.

The supply of engineers is likely to be influenced by those programs that provide financial assistance to students. An estimated 146,000 engineering students received aid in 1980 from the Department of Education's student financial assistance programs. In the same year, R&D funding and mission agency training programs provided support for approximately 10,000 students in specific subfields of engineering.

Programs that provide student support may also affect the supply of engineering faculty. However, none of these programs currently provides incentives for engineering students to take faculty positions upon graduation. Activities that stimulate the professional development of engineer ing faculty through workshops, institutes, or conferences may influence faculty retention.


However, these programs are small, fragmented, and of such short

duration that they are unlikely to have much effect.

Both new and used instructional equipment are provided to engineering schools to the extent previously described. Finally, engineer ing curricula are addressed by seven small programs that

totaled about $2.7 million in 1980.

of these, one NSF program

awarded one grant designed to influence the orientation of

engineering curricula toward a more industrial focus.


program is scheduled for termination in FY 1982, along with

all but one of the other six curriculum programs.

Mr. Chairman, this concludes my remarks. I would be

happy to answer any questions you may have.

Mr. FUQUA. Thank you very much.

I'm a little bit concerned. You mentioned the increase of 16 percent in Federal support for engineering education-and that was coming from student financial assistance programs. I thought that was going down in the new budget figures. Am I in error?

Mr. HAVENS. I understand your point. The budget accounting for those programs gets rather complicated.

What we are referring to there is budget authority. Budget authority is not necessarily directly translated to, and in this case does not directly translate into assistance for students. Budget authority, particularly in the guaranteed student loan program, represents the costs of subsidies for those programs.

These subsidies consist of two basic components: One is the insurance component, in which the Federal Government pays for the loan if the student defaults. Second are the interest subsidies during the time that the student has interest deferral.

So that the current year costs of those programs--
Mr. FUQUA. Can be a carryover figure?
Mr. HAVENS. They are reflective of past years' activities.

Mr. FUQUA. That doesn't necessarily mean more money. So, that figure can be deceiving. Mr. HAVENS. The numbers taken at face value are misleading.

Mr. FUQUA. The amount of money that goes into the Department of Education that you referred to, is that earmarked for engineering?

Mr. HAVENS. No, sir.

Mr. FUQUA. Someone can study liberal arts or humanities, something nonengineering or nonscience?

Mr. HAVENS. Absolutely. Indeed, most of the students receiving benefits under the student financial assistance programs do not study engineering. What we have attempted to do is attribute that part of the costs of the program to the engineering component in proportion to the number of engineers in colleges and universities.

It is an estimate at best and that is as close as we can get because the data are not that precise. We tried to attribute the cost to the engineering component as an indication of support for engineering along with a lot of other things.

Mr. FUQUA. There is nothing in that figure that you spoke of, the 16-percent increase, that affects faculty salaries, or instructional instrumentation, or improved facilities, or enhanced research facilities. None of those are included?

Mr. HAVENS. No, sir. That was one of the points we made in terms of the relationship between the Federal programs and the areas which are of concern to the engineering and science community. Most of the assistance goes to encourage and assist students of engineering and does not bear on the issue of faculty, numbers of faculty, or quality of faculty, or quality of instruction, or other things of that character.

Mr. FUQUA. I think if you set aside the student loan program, I think you would find that the role in engineering education is actually decreasing overall. Is that true?

Mr. HAVENS. That is correct. The other programs, some of which are targeted to engineers or related disciplines, are generally going down. Many of them are in fact being terminated.

Mr. FUQUA. That's the purpose of these hearings, to try to get at the fact that we are in fact decreasing and have for the last few years. As was pointed out, in the increase in the student loan program, a large portion-I don't know what percentage-of the increased figure in total dollars is actually obligations from preceding years.

Mr. HAVENS. We don't have that figure. I regret that we don't. It is almost certainly quite high.

Mr. FUQUA. Would that be a fair statement to say?
Mr. HAVENS. Yes.

Mr. FUQUA. So, as far as new money is concerned, for a new engineering graduate student to borrow money to go to school, it is declining?

Mr. HAVENS. I don't have that figure. We tried to lay hands on an estimate for the 1982 budget of the volume of new loans expected to be made in fiscal 1982. We were unable to obtain it. It is not a matter of anybody refusing to give it to us. The 1982 budget is still in a state of flux.

Mr. FUQUA. Let's do a scenario. One of the witnesses yesterday is head of an engineering department at a college. He stated he had had a 300-percent increase in students for mechanical engineering over the last 5 years. Now, that's more students going after less money.

None of the money is earmarked to engineering. You stated it can go to any bona fide student that qualifies. So, it is not earmarked for engineering. If we have an increase in the number of engineering students, which I think we have had over the years, as indicative of this one particular case, I don't know if this is typical of all engineering schools—then we have more people after less money, which I would think makes the conclusion that there is less money for student assistance per student.

Mr. HAVENS. That would imply, certainly, that a smaller proportion of the engineering students in that case were being assisted than was the case in the past.

I presume that some fairly significant number of engineering students are able to make it without assistance. So, it is difficult to say how critical that becomes in terms of the ability of students to receive their education.

Mr. FUQUA. Has there been a decrease in education programs for engineers in other departments?

Mr. HAVENS. Well, there are a number of programs scattered throughout the Government which directly or indirectly assist engineering students. Many of those programs are being terminated. Others are being reduced. So, I think in general this year as last, if one exempts the student financial assistance programs and looks only at the mission agencies, in that area from 1980 to 1981, there is a decline of about 8 percent in funding.

From 1981 to 1982, the latest figures we have available, there was a further decline of about 27 percent, leaving a total decline from 1980 to 1982 of about one-third.

Mr. FUQUA. That's a 30-percent decline?

Mr. HAVENS. Yes. Those programs are being reduced, and a number of them are being terminated.

Mr. FUQUA. The reason I'm going at this point is because when you say in your statement that it is increased by substantial amounts to 16 percent-it is really a very misleading figure. I don't want somebody to walk out and think we have this big bonanza.

Mr. HAVENS. No, sir. You are correct, and I attempted to qualify that number at a later point in my statement, to make it clear that that taken by itself is a misleading indicator.

Mr. FUQUA. Mr. Winn?
Mr. WINN. Thank you, Mr. Chairman.

Mr. Havens, I think you barely touched on it. What if the Department of Education is phased out? Who takes over some of the jurisdiction of the loans? Where would that be going? Do you know? Have you looked into that?

Mr. HAVENS. No. The best of my understanding is the decision on what happens to those programs if the Department of Education is terminated has not yet been decided. I presume some of those programs would be chosen to continue in another agency, but I don't think the other agency to take over those programs has been chosen. Health and Human Services would be an obvious candidate.

But, I don't know that they have chosen one. Someone certainly would have to continue to administer the outstanding loans and continue to collect amounts due under those outstanding loans.

Mr. WINN. I'm sure that Health and Human Services would probably get the jurisdiction in the sense that it had most of it before. But, I don't think there is much doubt, in my mind, anyway, that both DOE's are going out sometime during the Reagan administration. I just wondered if your agency had looked into that possibility or made any suggestions of where the funding should go, who should be in charge of the collections.

Mr. HAVENS. To the best of my knowledge, we have not made recommendations and have not looked in detail at that. I would presume that before looking at it in much depth, we would be wanting to look at what the administration was proposing to do. Where the programs should go depends, I think, in large part on which programs are retained and which programs are actually terminated, with the exception of the Department, if that should


Mr. Winn. What role has OMB played in affecting the support of the various mission agency programs for engineering manpower training such as in NASA, DOD, or DOE? Are they supportive of these programs? Do they play a part at all?

Mr. HAVENS. Well, I would have to say that we do not know how the decisions were made in detail as to which programs were reduced and terminated and which were not.

Mr. WINN. The various agencies that I mentioned send their budgets to OMB and OMB then makes a decision based on whatever their many reasons might be. But, I wondered in your experiences, have you gotten any feeling of support from OMB or is it hard and cold figures down there?

Mr. HAVENS. I guess my overall impression is—and perhaps one of the other staff has talked to OMB staff—I don't know. My overall impression would be that looking at the budget as a whole, support for this sort of activity has been generally accorded lower

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