A Sham and a Shame Draft Memorandum

    D R A F T 
M E M 0 R A N D U M 

TO: Jack Greenberg 
Julius Chambers 

FROM: Jean Fairfax 

RE: "A SHAM AND A SHAME" 

December 3, 1981 

Anticipated Impact on Black Children of th.e Reagan 
Administration's Actions, Policies and Proposals in 
the Area of Education 

The full impact of Reagan's agenda will not be known until he 

submits his budget to Congress in January, until Departments of 

Education, Justice and Agriculture file the results of the regu-

latory .revisions that are currently in process and, really, until 

school opens next fall, when the cumulative impact of budget 

cuts, phased-out programs, new regulations, and the shift to 

local control will become apparent. The purpose of this memo 

is to report my assessment of developments as of early December 

1981. It reflects consultations with representatives of nation-

al organizations that are close to the issues and with Federal 

officials, and my review of the Omnibus Reconcilation Act and 

other materials. 

I. GENERAL FINDINGS 

A. The number of black school children "at risk" will 

increase substantially. One cannot review their 

plight in school in isolation from the totality of 

Reagan's approach to the problems of the poor. (I am 

indebted to Bob Greenstein, Project on Food Assistance 

and Poverty for most of the following.) 



- 2 -

1,. Reagan's "safety net" for the "truly needy" 

is no safety net at all for the majority o~ 

poor families in America. Social Security, 

Medicare and veterans programs, most of whose 

beneficiaries are not America's neediest, 

altogether receive 95 % of the dollars appro-· 

priated to Reagan's safety net programs. 

87 % of Social Security and 86 % of Medicare 

recipients are above the poverty line. 

More than half the dollars in the seven 

programs benefit persons with incomes that 

are at least double the poverty level. Only 

5% of the Federal outlays for these seven 

·are for programs ·that primarily benefit the 

poor. Nearly two-thirds· of the Americans below 

the poverty line either receive no benefits 

from any of the safety-net programs or at 

most only free school meals. The real 

safety net programs which are vital to 

survival of the truly needy, such as food 

stamps, Aid to Families with Dependent Children, 

Medicaid, and rent subsidies, are victims of 

Reagan's sharpest cuts, the cumulative im-

pact ~f which will be disastrous. 

As "substantial parts" of the Great Society 

programs are "heaved overboard," to quote 

David Stockman, millions of American will be 

cast adrift. 



, 

- 3 ..... 

2. In 1980, 31.8 million Americans had incomes below 

the poverty line ($8,414 for a nonfarm family of 

four) and the number is expected to rise. The 

increase between 1979 and 1980 was "one of the 

largest increases in poverty sin ce we started com­

piling statistics in the early 1960's," commented 

a Census Bureau official. The Administration has 

admitted that unemployment will rise. However, 

unemployment compensation will decrease. 1 million 

unemployed workers in FY 1982 and an additional 

70,000 in FY 1983 will lose 13 weeks of extended 

unemployment benefits as a result of restrictions 

in coverage mandated by the Omnibus Budget Recon­

ciliation Act (OBRA) • The termination of a ll . 

public service jobs will increase the ·ranks of 

the unemployed. 94 % of these jobs wer.t to the 

economically disadvantaged; one- f ourth to youths 

under 22 and nearly one-half to low-income women. 

The alarmingly high unemployment rate of black 

women who are heads of families is a major factor 

in the increased numbers of the black poor and 

especially black poor children. More than half 

of all black children live in female-headed 

households; three fifths of such families are 

poor:. 

3. Poor · and marginal income families will encounter 

more difficulties in qualifying for welfare, 



f 

- 4 -

will not be able to rely upon receiving it 

promptly and regularly, and benefits will be 

lower. OBRA mandated about twenty changes in 

AFDC eligibility requirements and benefits 

that will result in a reduction of about 

·$1.7 billion in combined Federal and state 

benefits to recipients. Some of the changes, 

that were effective October 1981, are: a 

limit of $1,000 on allowable resources; 

limit of AFDC to families with gross incomes 

at or below 150 % of the states' standard 

of needs. ( 41 states have a standard of 

need well below the poverty line. 21.9 % 

of nonwhite female-headed households liv-

ing at 100-149% would lose 15% of their 

benefits); states may now treat as income 

the value of benefits received from food 

stamps or housing subsidies; the dis­

allowance of benefits to families where 

a caretaker relative is on strike at the 

end of the month; the restriction of 

"dependent" children to those under 17; 

the limitation of AFDC-Unemployment 

eligibility to those families where the 

"principal" earner is unemployed with 

the entire family ineligible if the 

principal earner is not registered for 



- 5 -

work or training. The treatment of working 

welfare mothers is particularly harsh. Wel­

fare mothers who work will bear nearly half 

of all AFDC cuts, although they are only 

about one-seventh of mothers on welfare. 

After four months of work, AFDC mothers 

with three children will lose all AFDC 

benefits as follows - in 36 states, if they 

earn $5,000; in three states if they earn 

as little as $1,750. 

According to a recent New York Times article 

reporting the findings of a study entitled 

"Impact of the Reagan Administration's Pro­

posed Budget Cuts on Adolescent Pregnancy 

Program": 

*Teen-agers account for 17 percent 

of all pregnancies and 14 percent 

of all births in the city. They 

face increased risks of complica­

tions and mortality. 90 percent 

of teen-age mothers drop out of 

school. 

*Teen-agers are now facing cuts in 

vital educational, vocational coun­

seling, medical and recreational 

services - the very serv ices that 

could give them a more affirmative 

sense of the future and reasons to 



- 6 -

defer parenthood. 

*2,027 pregnant teen-agers and adolescent 

parents and 11,793 children will be 

denied services unless the city or state 

replaces decreased funds in the Maternal 

and Child Health Block Grant. 

*15,545 teen-agers will be denied family 

planning services as funds are reduced 

in Title X of the Public Health Act. 

*New York City faces a reduction in 

the $165,000 it received last year 

through the Vocational Education Act 

for the education of pregnant students 

and parents and $35,000 for day care. 

More than half of the mothers and 

children in that program would be 

eliminated. 

4. Poor and marginal families will hav e less dis­

posable income, inasmuch as a larger proportion 

of their income will necessarily h ave to be 

allocated to survival: 

a. For housing . The lack of affordable 

housing is a major problem f or t he 

poor. 47 % of female-headed house-

holds cannot secure housing at 25 % of 

their income. Most low-income f amilies 

do not receive housing assistance now, 

and OBRA cut housing assis t ance programs 



- 7 -

by one-third. OBRA also raised rents 

over the next five years for tenants 

in subsidized housing to 30% of their 

income. The median annual income for 

tenants in public housing is below 

$4,300; more than half of these tenants 

are single parents with children. 

b. For energy. Although the average 

American household spends 10% of- its 

income on energy, low-income house­

holds spend one-fourth to one-third 

on energy costs. OBRA froze funds 

available through Low Income Energy 

Assistance . Program-for FY 82-85. 

The Congressional Budget Office has 

estimated that as energy costs rise, 

the real value of this assistance by 

FY 84 will have been cut to 35%. 

c. For medical services. OBRA reduced 

Federal support for Medicaid. States 

are not only unlikely to replace these 

lost Federal dollars; reductions in 

state funds for medical services covered 

by Medicaid, already instituted in 

recent years, are expected to accel­

erate and to impact disproportionately 

on female-headed families with chil-



- 8 -

dren. The non-institutionali~ed ~po~tion 

of the Medicaid cases, more than half 

of whom are women and children in fe­

male-headed households, will bear a 

large proportion of the forthcoming 

cutbacks in medical benefits and ser­

vices, because the costs of institu­

tionalized care for the aged, blind 

and disabled are more difficult for 

states to control. Cuts in services, 

limits on visits to medical care pro­

viders and the elimination of coverage 

for such items as eyeglasses and 

dental care for children are antici­

pated and will force. marginal families 

to forego services, to delay them at 

risk or to pay for them out of already 

reduced incomes. 

5. Drastic cuts in programs for infants· and pre-school 

children will undoubtedly increase the number of 

children who enter school at risk . The Administration 

has proposed a 30 % cut in the Special Supplemental 

Food Program for Women, Infants and Children (WIC). 

6. Budgetary cut s, the elimination of programs, changes 

in regulations, and the shift to local control will 

have a cumulative impact. At their best, Federal 

programs recognized, and sought to address, the 

mutually reinforci ng nature of deprivati on in income, 



- 9 -

housing, health and education. Eligibility in one 

program, e.g. AFDC, was a presumption of need that 

would automatically declare eligibility for another, 

e.g. free lunches. The number of AFDC children or 

recipients of free school meals established a statis­

t i cal justification for the designation of schools 

as concentrations of poverty, and thus eligible for 

targeted Title I programs. Changes in the AFDC 

particularly will, therefore, trigger changes in 

levels of eligibility and thus of participation in 

a range of programs for the disadvantaged. 

B. The increased number of poor families will enlarge the 

pool of children who would have qualified for assistance 

under the old categorical programs. However~ many will 

not receive assistance because of drastically reduced 

appropriations, higher eligibility standards and the 

total phasing out of programs. Programs that have been 

critical for economically and educationally disadvantaged 

children will suffer severe budget cuts that will result 

in a reduction in the number of eligible children served. 

Eligibility standards are being tightened, but thousands 

of children that meet even the more stringent standards, 

e.g . for free or reduced price meals at school, will not 

receive benefits to which they are entitled because schools 

will eliminate nutrition programs altogether. 

C. Block grants, that leave total discretion for program 

decisions to local authorities and that provide less money 



- 10 -

in the aggregate than was previously available for 

categorical programs, will pit groups of children 

against each other, as potential beneficiaries scramble 

for a slice of a smaller pie. Poor and minority chil-

dren will be at a disadvantage in the competition with 

well- organized advocates of programs that largely serve 

nonminority and affluent students. 

D. The elimination of the Department of Education expresses 

the Administration ' s determination to eliminate vital 

programs and to vitiate the power base around them that 

children's advocates have been able to create. The 

Department has become a symbol of the Federal role in 

education. This was not true for the old Office of 

Education prior to the enactment of significant Federal 
. 

education programs . The scattering of programs through-

out the Federal Government would make it extremely diffi-

cult for advocacy groups to lobby and monitor effectively 

and to impact on shaping the design and implementation 

of Federal education programs. 

Writing in SCHOOL BOARD NEWS on October 28, 1981, Thomas 

A. Shannon, executive director of the National School 

Boards Association, pleaded that the Department be given 

a chance to prove itself. He commented critically on 

options that Secretary Bell has presented to President 

Reagan: 

*Separate sub-cabinet educational agency 
"deprives education of being represented 
in the highest councils of our nation •.• 
and it would undercut lay citizens con­
trol over education by .•. transforming 



- 11 -

it into a conclave of professionals who 
answer only to themselves - because a 
separate agency would be less responsive 
than a visible and politically account­
able secretary ... " 

*Folding education back in Health and 
Human Services " ••• would bring back 
the bad old days of HEW when education 
was tagging Charlie ••• Civil rights 
enforcement in the schools was also 
amuck - being done by people who knew 
nothing about how schools are governed 
and administered and were unaccountable 
to anybody who did •.• " 

*Dispersal of education functions through­
out the federal bureaucracy " •.. is the 
most onerous of all ••. segments of educa­
tion (would be) buried under layers of 
different bureaucratic mire •.• Contrary 
to what advocate5 of the dispersal .option 
claim the flow of bureaucratic confusion 
endemic to it cannot be cured by de­
signating a White House 'education policy 
coordinator' ••. More often than not, it 
is the administration of a federal pro­
gram that generates problems - not the 
policy that undergirds it .•. " 

*Education as independent sub-cabinet 
foundation " .• . would be impotent to 
respond to judicial mandates (with the 
results that) the regulation-making 
authority will be exercised by the 
courts •.. (that) perceive their role ••. 
as much broader than the specific is-
sues being litigated .•. Because founda­
tions are research-oriented ivory towers, .•• 
(folding education into an existing 
foundation and disgorging impractical 
ideas) .•• has the potential for being 
a back-door way to introduce nation-
al curricula and tests and ..• cause 
endless headaches for local school 
boards. 

E. Washington-based organizations are gearing up for 

the long haul and are increasing their lobbying, 

monitoring and advocacy efforts. The Field Founda-

tion has announced its decision to target grants 



- 12 -

to such efforts. Some new groups are getting into the 

act . The Council on Foundations, and other representa-

tives of organized philanthropy, concerned about the 

pressures on their constituencies that have been created 

by Reagan's cavalier announcements about volunteerism 

and the private sector, have been voices of realism 

about the gap that will not be closed as the Federal 

Government withdraws. Mayors and governors, undoubtedly 

fearful about the lines that will be forming at their 

doors, are beginning to challenge the new Federalsim. 

There is a possibility that all of these will coalesce 

into a political force that will prevent Reagan from 

implementing fully his Grand Design. However, it would 

be foolish to count on that possibility. It is imperative 

for LDF to define what our role should be between now and 

Fall 1982. 

F. Specific areas of LDF concerns and issues 

1. The following are the programs that I believeLDF 

should consider monitoring. What our priorities 

are, how we should be involved, and whether we 

should define a leadership or supportive role 

for ourselves should be the subject of a long 

staff meeting early in 1982. 

Education Consolidation and Improvement Act (ECIA) , 
Chapter I, formerly ESEA Title I 

ECIA, Chapter II, Block Grants 
Student Financial Aid 
School-based Child Nutrition Programs 
School-based Vocational Education and Youth 

Training Programs 
Aid to the Handicapped 
Civil Rights Enforcement 



- 13 -

2. Issues 

a. Budgetary. Reagan is using the budgetary 

decision-making process as a vehicle to 

make substantial revisions in programs, 

bypassing congressional oversight commit­

ties. The absence of legislative history 

as programs are abandoned or totally re­

vamped will haunt us for years. The role 

of the Off ice for Management and Budget 

(OMB) must be scrutinized and challenged. 

Whether OMB is vulnerable to a legal chal­

lenge might be an important area of re­

search for LDF. 

b. The implications of regulatory reform. 

Pursuant to Reagan's Executive Order 

#12291, a review of regulations is under­

way. Reagan defines his approach as 

back to the Constitution, back to the 

specific language of statutes. If 

something is not specifically mandated 

or authorized, administrative agencies 

should be prohibited from expanding on 

language. Reaganites are now involved 

in trimming back definitions, tightening 

eligibility standards, reducing require­

ments for state plans to broad state­

ments of assurance, and significantly 

reducing data collection and reporting 

requirements. 



- 14 -

c. The implications of Reagan's concept 

of Federalism. 

Secretary Bell views the Federal role 

as being a pass-through of statutory 

language, "non-binding guidance," techni­

cal assistance, research and a clearing­

house for exemplary programs. 

d. The appointment of key policymaking 

positions of persons who are antagonistic 

to, and unfamilar with programs for the 

d isadvantaged and who have no links with 

advocates of minority children. 

e. The impact of all of the above on black 

survival. LDF may want to take a slice 

through several key programs that deliver 

educational services and identify some 

civil rights or equity . issues that might 

suggest new litigation, e.g . the shift 

under a block grant to programs that 

disproportionately benefit affluent kids . 

As you will note later, if changes now 

being contemplated in the Aid to the 

Handicapped are .implemented, the Adminis­

tration might be vulnerable to legal 

challenge. 



- 15 -

II. EDUCATION CONSOLIDATION AND IMPROVEMENT ACTION OF 1981 
(ECIA) - Chapter I 

(This section reflects consultation with: 
Ann Rosewa~er, Administrative Aide to Congressman Miller 202-225-2095 
Paul Smith. -Children's Defense Fund 202-483-1470 
BettyeHamiiton, Children's Defense Fund 202-483-1470 
Hayes Mizell, Chairman, National Advisory Council on the Education 

Disadvantaged Children 803-256-6711) 

A. OBRA's Title V is the Omnibus Education Reconcilation 

Act of 1981. Its Sec. 502 establishes appropriation 

limits for FY 82,83 and 84, and supersedes all laws that 

are inconsistent with its provisions. 

B. The Education Consolidation and Improvement Act of 1981 

(ECIA) is Sub-title D of Title V. Its Chapter I, Financial 

Assistance to Meet Special Educational Needs of Disadvantaged 

Children, is OBRA's revision of ESEA's Title I, and will 

take effect on July 1, 1982. The Federal Government inter-

vened iri 1965 in response to the documented failure·of 

state and local governments to meet the educational needs 

of poor children. Since then Federal funds have provided 

leverage over and influenced the priorities of much larger 

amounts of state and local funds, for it is only in rural 

and large urban school districts {in which 35% of the educa-

tion budget is Federal) where Federal funds are a sub-

stantial percentage of the budget. Still a categorical 

program and not a block grant, Chapter I continues con-

gressional policy "to provide financial assistance •.. to 

meet the special needs of educationally deprived chil-

dren .•. but to do so in a manner which will eliminate 

burdensome, unnecessary and unproductive paperwork and 

free the schools of unnecessary Federal superv ision, 



- 16 -

direction, and control." The same Administration that 

has released school systems from strict standards of 

accountability is committing substantially fewer dollars 

to them during a period when the number of poor children 

is increasing. Reagan has "cut the heartout of federal 

assistance, " Hayes Mizell , chairman of the National Ad­

visory Council on the Education of Disadvantaged Children, 

(NACEDC) has charged, just as studies are documenting 

Title I's success in improving the achievement scores of 

poor children. 

1. Between 1979-80 the number of children in poverty 

increased .by over a million - from 10.2 to 11.4 

million. One in five American children is poor. 

Half of the children now eligible to participate in 

Title I programs are not served because of the in­

adequacy of current funding levels. Title I has a 

"forward funded" budget, so the full impact of 

Reagan's budgetary actions will not be felt until 

the beginning of the 1982-83 school year. Reagan 

has used a combination of ;i;ecisions over budgets 

already approved by Congress and threats of fund 

deferrals, and has submitted a budget for next year 

that is substantially lower than that of President 

Carter and those approved by OBRA, the House and 

the Senate. (An Administration request to rescind 

requires approval by Congress with 45 days or it dies; 

a deferral notice submitted to Congress is sustained 

if it has not been disapproved within 30 days.) The 

attached chart from NACEDC demonstrates the havoc 



- 17 -

Reagan has created. After securing recisions last 

spring for funds for this current school year, Reagan 

sought additional cuts which would reduce the appro-

priation for next year by 37%. Reporting the Con-

gressional Budget Office's projection that $3.961 

billion would be needed to maintain the level of 

services, Mizell testified that: 

An effective cut of 37% in real service 
would mean that 2 ,268,000 children 
participating in Title I programs would 
be denied services. Of this number, 
1,493,000 would lose supplementary in­
struction in reading; 693,000 would lose 
such instruction in mathematics; and 
473,000 would be denied additional in­
struction in other subject areas. Health 
and nutrition services would also be lost 
to 452,000 children, and 1,104,000 chil­
dren would lose other support services 
such as transportation, guidance, teat­
ing, psychological services, etc. (foot-
note omitted) · 

Subcommittee on Elementary, Secondary and 
Vocational Education, Committee on Educa­
tion and Labor 
United States House of Representatives 
October 6, 1981 

2. In the Department's Questions and Answers Concerning 

the Education Consolidation and I mprovement Act of 

1981, October 9, 1981, OBRA's departure from key pro-

visions of Title I is made clear: 

a. Concentration on the neediest of the needy is 

no longer required. 

b. Although school systems must consult with 

teachers and parents of disadvantaged children, 

parent advisory councils (PAC) in each Title 

I school and district-level are no longer 



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- 18 -

mandated. This will eliminate an important 

vehicle for the sus·tained involvement of poor 

people that has forced many systems to become 

more accountable. 

c. The determination of the amounts of f'u_nds 

to state educational agencies {_SEA} and 

through them to local educational agencies 

(LEA} will be under the same payment pro­

visions as the existing Title r. However, 

the requirements for maintenance of effort 

are l ess striIJgent and may be waived by the 

SEA for one year. Comparability is still 

required but not comparability reports~ 

LEA's will only be required to file certain 

assurances. LEAts must supplement and not 

supplant but they may exclude certain funds 

in their calculations both. for comparabili t y 

and supplementing. 

d. SEA 's will be responsible for the monitoring 

of and technical assistance to LEA's but can 

determine how they will fulfill these functions. 

SEA's will be required to file with the Depart­

ment only assurances concerning fund disburse­

ments. 

e. LEA's will file applications, valid for three 

years, in which they will make the necessary 

assurances and describe their programs. They 

are required to conduct an annual assessment of 



- 19 -

educational needs, on the basis of which 

they will select children for special as­

sistance, but LEA's will devel op their own 

needs assessment and evaluation processes. 

LEA's "will be held accountable for any 

breach of assurances" and must keep such 

records as may be required for fiscal 

audits and program evaluation. 

f. The Department's role will be largely that 

of providing "non-binding guidance" and 

"monitoring will be conducted only as 

necessary to ensure compliance with the 

simplified requirements of Chapter I and to 

investigate specific compliance problems 

that SEA's have been unable to resolve. 

Although the Department will provide leader­

ship and technical assistance, it will be 

focused primarily on the development of 

effective programs rather than on adherence 

to Federal administrative requirements." 

(Questions and Answers, p.6) The size of 

the Title I staff has already been decimated. 

By January 1982, 40 of the 80 staff members 

will have been terminated. 

3. The provisions coverning aid to private schools are 

the most detailed in ECIA and contain the strongest 

requirements for a Federal role in the provision of 

educational services to needy children and in the 



- 20 -

resolution of disputes over such arran~ements, 

The Secretary may bypass an LEA that failes to 

include eligible private school children and arrange 

to have services provided for them directly out of 

the state's allocation. 

c, The Washington· P'ost on December 8, 1981, leaked an 

OMB proposal to cut Chapter I funds to $1.5 billion. 



- 21 -

III. EDUCATION CONSOLIDATION AND IMPROVEMENT ACT OF 1981 
CHAPTER II 

(This section reflects consultation with: 
Ann Rosewater, Administrative Aide to Cong. Miller 
Linda Brown, Lawyers' Committee for Civil Rights 
Children's Defense Fund Staff 202-483-1470) 

A. President Reagan has a dream. 

I have a dream of my own. I think block 
grants are only the intermediate steps. 
I dream of the days when the Federal 
Government can substitute for those the 
turning back to local and state govern­
ments of the tax resources we ourselves 
have preempted here at the Federal level .•• 

202-225-2095 
202-628-6700 

(To the National Association of Counties, March 1981) 

For poor and minority Americans, Reagan's dream is a 

nightmare. Blocks of Federal programs are being turned 

over with less grant money, practically no Federal 

monitoring, and no mandates to target services to those 

with the greatest need for assistance. The block grant 

as the first step in the total withdrawal of the Federal 

Government from program areas to which national priori-

ties have been assigned is indeed a "turning back." 

B. Chapter II ~epea~s 33 categorical programs and folds 

them into an education block grant, effective July 1, 

1982, for basic skills development, educational improve-

ment and support services and special projects. 

1. Although the former categorical programs had 

received about $700 million, substantially 

less will be available for allocation to states 

next July. The Administration requested about 

$500 million earlier this year. According to 

the Washington Post on December 8, OMB is now 

proposing to slash that amount 40 %. 



- 22 -

2. 80% of the appropriation to each state will pass 

through the state educational agency (SEA) to 

local educational agencies (LEA) without specific 

Federal mandates concerning the in-state alloca­

tion or the use of the funds at the local level. 

Each SEA can determine how it will comply with 

the broad provision that funds be distributed 

to LEA's on the basis of the relative enrollment 

of public and private school pupils, with an 

adjustment for high-cost children (i.e. the rela­

tive number of children whose education imposes 

a higher than average cost per child) • Each 

state must have a Governor's Advisory Committee 

to advise only on the criteria for the alloca­

tion of the 80% and the state's use of the 20%. 

According to "Questions and Answers," released· 

by the Department of Education in October, if 

a state ignores the advice of the Committee, 

this will be considered by the Department to 

be an internal affair. In another title, OBRA 

requires the publication and dissemination of 

a report on the intended use of block grants, 

in which the state would have to justify the 

discontinuation of funding of the former 

categorical programs on the basis "that the 

program has not proven effectiv e." A con­

troversy has arisen over whether this section 

applies to Chapter II and whether the state's 



- 23 -

report must cover all of the block grant or 

only the 20% under the direct control of the 

SEA. 

3. Some requirements for categorical programs 

survive - funds must supplement and not supplant 

and there must be maintenance of effort - but 

in much weaker language. Maintenance of effort, 

for example, will be "calculated on the basis of 

aggregate state and local expenditures or per 

pupil expenditures for free public elementary 

and secondary education. Thus, even though 

some LEAs did not maintain effort, expenditure 

by other LEAs and the State may make up for the 

failure of those LEAs to maintain effort." 

(Q & A) 

4. The SEA and LEA will be auditing themselves. 

"If there appears to be a need fo r a Federal 

audit , the responsibile Federal agency will 

be expected to make one. In practice, however, 

the audit requirements set out by OMB require 

the Federal agencies to rely first and foremost 

on grant recipients' independent audits and to 

build on such audits when a Federal audit is 

deemed necessary." (Q & A) The SEA will f ile 

audit reports to the Inspector General . LEA 

audits must only be "available on request." 

5. None of the existing categorical program require­

ments will be carried over. 



- 24 -

6. OBRA requires equitable participation of private 

schools. Q & A indicates that children in pri-

vate academies that are ineligible to receive 

Federal funds should be included in the SEA's dis­

tribution formula. The state would then determine 

in accordance with its own statutes whether such 

children should receive Chapter II benefits. Q & A 

further states: "However, it should be recognized 

that children enrolled in private non-profit schools 

are eligible for Chapters 1 and 2 -- not the school." 

If the LEA does not accept Chapter II funds, bypass 

arrangements to reach children in private schools 

will be made by the Secretary and the state. Public 

school authorities have already expressed concern 

about the involvement of private schools. Gonunent­

ing on Q & A's statement that private school chil­

dren would be eligible for services in the schools 

they atten even if they reside in another district 

or state , Steve Sauls of the Florida State Board 

of Education anticipated "confusion as to how 

private school children are to be counted for the 

purpose of allocating funds betwee n dis tricts if 

t he children reside in a district different from 

the one in which they are enrolled." He also won­

dered why Chapter II funds should be allowed for 

private school c onstruction but not for public 

schools. 

7. There will be no standard state application - a 



- 25 -

letter will suffice to the Secretary who will 

approve only the criteria for the distribution 

of 80 %. To receive funds, the LEA must only 

have to file with the SEA a 3-year application 

for which no formal approval by the state is 

required. Subject only to some broad provisions, 

each LEA will have complete discretionary 

authority over the use of funds and program 

decisions. 

C. OBRA states, "Regulations issued pursuant to this sub-

title shall not have the standing of a federal statute 

or the purposes of judicial review." Inasmuch as the 

Administration is talking about "non-binding guidelines" 

as wel l as regulations, it is not at all clear what power 

and effect promulgations under this title will have. 

D. Local and state education officials, as well as legal 

experts, have already expressed concern about Chapter II. 

1. Large schools systems are worried about the 

treatment they will get by the SEA as formula 

are developed. 

Another concern of . .. many people involved 
with Title I in the major urban centers 
of the country is that we are not re­
placing a federal bureaucracy with a 
state bureaucracy and federal regulations 
with state regulations •... 

Philadelphia and other major school sys­
tems throughout the country are deeply 
concerned over the flexibility given 
to states in the distribution of Title 
II Block Grant monies. Historically, 
this nation's major urban communities 
have had to fight over their fair share 
of funding from the states •.•• However, 



- 26 - . 

one of our fears is that the State legisla­
ture, which has the authority to designate 
how these funds will be used, may try to 
supplant current state funding with funds 
available under Title II Block Grant . Our 
basic fear here is that we don't in any 
way wish to have our current subsidy from 
the State reduced because of the Block 
Grant funds •. • 

Additionally, the consolidation of pro­
grams under Title II will result in a 
significant cutback of funding currently 
available to the school district. 

Thomas c. Rosica, School District of Philadelphia 
HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON 
ELEMENTARY, SECONDARY AND VOCATIONAL EDUCATION 
October 6, 1981 

2. SEA representatives are worried about the legal im-

plications for them of the absence of clear guidance 

from Washington . 

•.• (w)e welcome regulatory relief. We 
are concerned, however, that without 
reasonable guidance written into ~egula­
tions, many of us • . • may end up in court 
justifying our actions after the fact •.. 
We are committed to making these programs 
work and do not want to be cited after 
the fact for non-compliance. We don't 
object to being held accountable, but we 
believe we should have the benefit of 
appropriate guidance and clear authority 
from the outset. We are afraid that 
too little regulation may be almost as 
bad as too much. Our understanding is 
that the Department will issue only a 
couple of pages of regulations and rely 
on a series of nonbinding questions and 
answers to implement congressional in­
tent •••• We are responsible for e valuat­
ing local Chapter 2 programs starting in 
FY 84 .•. but we do not have prior approval 
and are concerned about our responsibility 
in the event that we find weak local pro­
grams •.•• Our planning is complicated 
by the uncertainty ..• by expectations 
that deeper cuts in the form of recis-
s ions will be proposed early next year .... 
We are concerned that too little regula­
tion will tilt federaleducation policy-



- 27 -

making further away from the Congress 
and toward the courts and that devastating 
budget cuts will foreclose the opportuni­
ties for improvement that consolidation 
signaled. 

Testimoney of Steve Sauls 
Florida State Board of Education 
U.S. HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON 
ELEMENTARY, SECONDARY AND VOCATIONAL EDUCATION 
October 6, 1981 

3. Concerns of the Office of General Counsel of the 

National Education Association about the private 

school involvement in Chapter II were expressed in 

a memorandum, dated October 21, 1981, from Mike 

Simpson to Bob Chanin . Commenting about the loans 

and gifts of materials or equipment, Simpson stated 

that materials that were not secular would certainly 

be declared unconstitutional but "the kinds of 'equip-

ment' which could be purchased by public educational 

agencies for use by parochlal schools, are, I f ear, 

limited only by the fecund imaginations of private 

school officials." · (page 4) Aware that OBRA ex-

pressly permits repairs, minor remodeling or con-

struction at facilities at private schools, he stated: 

••• I believe the Court would likely declare 
unconstitutional the provisions of ECIA e.x­
tending to private and parochial schools 
for construction, repair, maintenance and 
other capital improvements of buildings and 
facilities because of the pervasively relig­
ious nature of most private elementary and 
secondary schools and the very intrusive 
and entangling requirement of government 
surveillance to insure the secure use of 
such facilities .•• 

And re diagnostic, theraputic and other services, he 
stated: 

• 



- 28 -

..• there are at least two tenabl~ argu­
ments why some of the services authorized 
by the Act are unconstitutional. First 
there is no statutory restriction on the 
provision of services on school grounds ••• 
and there is no requirement for govern­
ment surveillance or auditing. 

E. ESAA's consolidation into Chapter II will effectively 

eliminate this program that was more than just an im-

portant source of funds for school districts undergoing 

desegregation. It forced attention on the recurring 

problems in ''second-stage" desegregation, e.g. inschool 

segregation, discrimination in discipline, and personnel 

practices and required the clearance of the Off ice for 

Civil Rights before Federal funds could be disbursed. 

The ESAA regulations will be withdrawn. Programs to make 

desegregation work will have to compete with others that 

have more powerful advocates·. 

F. Chapter II will certainly result in conflicts over funds, 

jurisdiction, program decisions, and the involvement of 

private schools; in struggles among advocates who will 

claim residual rights from the old categorical programs 

for their children and will be fighting over scarce 

resources; and in controversy among school authorities 

at the local and state levels over formulas, ·audits and 

the meaning of the "non-binding" guidance from Washington. 



- 29 -

IV. STUDENT FINANCIAL AID 

(This section reflects conversations with and materials received 
from: 
Patricia Smith, American Council on Education 202-833-5984 
Herbert Flamer, Educational Testing Service 609-921-9000 
Connie White, Natl. Assn. of Stud. Financial Aid Officers 

202-785-0453 
Maureen McLaughlin, Congressional Budget Office 202-226-2672) 

A. For minorities, meaningful access to postsecondary educa-

tion requires student financial aid programs that are 

dependable, adequately funded, equitably administered, 

well managed and targeted to the neediest students. The 

mismanagement of Federal student aid funds is periodically 

exposed by the media. Less attention, however, is devoted 

to patterns of inequity in state financial aid programs 

which, with a few exceptions, are not reliable sources of 

aid for minorities. The Chronicle of Higher Education in 

an article and its FACT-FILE on November 18, 1981, reported 

a 10.3% increase in state governments' aid to college stu-

dents this year over 1980-81. However, the Chronicle 

documented wide variations in (1) the average amount of 

awards; (2) the percapita amount of awards (ranging from 

$16.88 in New York to 11 cents in Alabama); (3) the pro-

portion of grants to applicants (the 71.8 % cut in state 

scholarship funds in Alabama meant that only 2.5% of appli-

cants received aid); and the increase in the share of state 

aid to students enrolled in private institutions. Although 

only 20 % of t he nation's college students, and a smaller 

percent of black students, are enrolled in private institu-

tions, 58 % of all state aid nationally is going to t he private 



- 30 -

sector this year. Many state programs are not need~ 

based and some favor more prestig.ious institutions where 

minorities are largely underrepresented~ 

B. Since the mid 60's, Federal programs of grants and subsi­

dized loans to help students finance their education have 

been critical factors in the enrollment of blacks in post­

secondary education and for the survival of predominan.tly 

black institutions most of which are heavily dependent 

upon the Federal funds they receive indirectly through 

student tuitions and fees. A series of actions and pro­

posals by the Reagan Administration - including budgetary 

cutbacks, caps on grants, decreased ·Federal subsidies for 

loans, revised eligibility standards, phasing out of pro­

grams - represent, "a -revolutionary reversal of the nafional 

commitment to educational opportunity," according to the 

American Council on Education. "Proposals for further 

cutbacks in Federal student aid programs suggest that a 

fundmental shift may be under way in the Government's 

commitment to provide wider access to higher education," 

stated Edward B. Fiske (The New York Times, October 20, 

1981) who reported in the same article the conclusion of 

the President of the University of Vermont that these 

"cuts are not only economic but philosophical." To the 

extent that David A. Stockman speaks for the Administration, 

his philosophy on financial aid, as presented in testimony 

to the House Budget Committee, should be noted: 



- 31 -

" .•. I do not accept the notion that the 
Federal Government has an obligation to 
fund generous grants to anybody that wants 
to go to college. It seems to me that if 
people want to go to college bad enough, 
then there is opportunity and responsibility 
on their part to finance their way through 
the best they can." 

He does not suggest "best they can" measures for students 

from families with in~omes under $6,000. 

c. Administration's actions with respect to specific programs 

1. Pell (formerly Basic Educational Opportunity) Grant 

Program is an entitlement program providing non-

discretionary awards to all financially needy stu-

dents who are enrolled at least ·half-time. Without 

Pell, 41% of all low-income student recipients would 

not have been enrolled in postsecondary education, 

according to a Harvard study in 1979~ 

a. The Education Amendments of 1972 authorized 

·awards of $200 to a maximum of $1,900 by FY 82 

and $2,600 for FY 86. $2.85 billion would have 

been needed to maintain current eligibles and 

provide for a $1,800 maximum award in FY 31. 

Administrative recisions cut the FY 81 budget 

below the Continuing Resolution of December 

1980 to $2.346 billion, thus reducing the maximum 

award to $1,670. OBRA mandated appropriation 

limits ($2.65 billion for FY 82; $2.8 billion 

for FY 83 ; and $3 billion for FY 84) • Reagan's 

request in September for additional reductions 

of 12 % lowered the Administration's proposed FY 82 



- 32 -

budget below ~BRA to$2.187 billion. Accord­

ing to ACE, this would mean that students 

from families with incomes under $10,000 

would be protected but that little money 

would be available for students above the 

pov erty level . 

b. Pell eligibility is determined by a national, 

uniform and complicated needs-analysis 

formula that takes expected family contri­

bution and the cost of attendance into con~ 

sideration. A major controversy has erupted 

over the family contribution schedule. OBRA 

ordered the Department ~f Eduqation to sub­

mit a new schedule to Congress by Septem-

ber 1, 1981. Instead, DE filed a Notice of 

Proposed Rulemaking (NPRM) in the Federal 

Register on October 16, requesting comments 

by December 15. College spokesmen have 

charged that this delay in announcing the 

new schedule is causing disruption and anxiety; 

that the Administration has used the NPRM 

without authorization to request continuation 

of the $1,670 ceiling on maximum awards when 

both houses of Congress have developed their 

appropriations based on a $1,800 maximum; 

that the Administration is manipulating the 

eligibility rules and the family contribution 

schedule to conform to Reagan's lower budget; 



- 33 -

and that DE's plan to reduce students' eligi­

bility if they receive educational benefits 

through the G.I. Bill or Social Security is 

"unduly harsh." Developments in the needs­

analysis must be carefully monitored to 

assure that the new system, due to be im­

plemented in 1982-83, is not a retreat for 

minority and low-income students. In 1980 

Congress voted to establish a single needs 

analysis formula that would be used in the 

Pell as wel l as the three campus based pro­

grams (SEOG , CWS and NDSL). Student financial 

aid experts, convinced that this was not a 

wise amendment, believe they have Congression­

al support to separate these need analysis 

including how the family size off-set is 

calculated. The degree to which child care 

expenses can off set income to determine dis­

cretionary income is crucial to black women 

who are heads of families and who are attempt­

ing to improve their status through education . 

2. Supplemental Education Opportunity Grants (SEOG), 

authorized at $370 million for FY 81 and also by 

OBRA fo r FY 82 , but cut by the Reagan budget to 

$326 million for FY 82 , would lose 75,000 recipients. 

Although the 1980 amendments eliminated language 

requiring the targeting of SEOG to the neediest 

students , it has been an essential supplement for 

needy students attending higher priced public and 



- 34 -

and private institutions. 

3. College Work-Study (CWS) , authorized for FY 82 

at a level of $550 billion by OB.RA, the House and 

Senate, would be cut by Reagan to $484 million . 

Recipients would be- reduced 110,000 

4. National Direct Student Loan (NDSL) supports campus 

revolving loan programs, generally at large public 

and private institutions. Reagan's budget of $252 

million is less than the OBRA ceiling of $286 bil­

lion. 50,000 fewer students would receive awards. 

5. State Student Incentive Grants (SSIG), set up in 

1974 to encourage states to begin or to expand 

student aid programs, is still largely concentrated 

in a few large states. 89% of SSIG funds are 

available only if matched equally by the states. 

States with small programs are heavily dependent 

upon Federal f unds . In the Chronicle's FACT 

FILE , 16-17 states report only incentive grants 

in 19 80-81 . The Senate voted to abolish this pro­

gram. Reagan 's proposed budget of $68 mil lion, 

9 million lower than OBRA, would eliminate 30,000 

state awards. 

6. Social Security Educational Benefits, paid from 

the Social Security Trust area, have been available to 

children of a deceased or disabled wage earner 

cov ered by Social Security. The surviving spouse 

gets the children 's benefits through high school . 



- 35 -

Students, who are beneficiaries in their own 

right from ages 18-22, receive benefits averaging 

$2,000 if they are enrolled fulltime in post-

secondary institutions . OBRA phased this program 

out entirely by 1985; no new recipients will be 

funded as of June 1982 and current benefits were 

cut 25 %. The American Council on Education 

criticized this decision: 

This step alone will eliminate one 
of the largest current sources qf stu­
dent support: some 750,000 students 
now receive social security benefits 
totalling $2 billion annually - one 
fifth of total federal student aid. 
Since most beneficiaries are from 
extremely low-income families, the 
loss of these benefits will place 
severe strains on other student aid 
programs ~hich cannot be increased 
even to compensate for inflation. 

FACT SHEET ON STUDENT AID, Nov. 6, 1981 

7. The Guaranteed Student Loan Program (GSL) is gener­

ally believed to be out of control and is in jeopardy, 

largely because of the soaring interest rates that 

the Government is subsidizing. Students negotiate 

bank loans up to $2,500 a year at 9% with GSL subsi-

dizing the interest while the student is enrolled. 

After graduation, the student pays the 9 % while GSL 

pays the difference between 9% and the market rate. 

GSL was without income restrictions from 1978 until 

this fall. Recent changes, effective October 1981 

impose a 5% origination fee; restrict loans to the 

unmet needs of students from families with incomes 



- 36 -

under $30,000; and impose a needs test for those 

above that level Other revisions are being dis­

cussed: exclusion of graduate and professional 

students (now 25 % of the . program); limitation to 

students with demonstrated need; the elimi nation 

of the in-school interest subsidy (a move that 

would undoubtedly impact negatively on minority 

and poor students since banks would make loans 

only to their preferred customers); adding interest 

to the principle of the loan so that students 

would be borrowing the interest as well (.a student 

borrowing $9,000 would end up owing $20,000); and 

a total lending ceiling. Under this last plan, 

a fixed appropriation would be divided up among 

the states and loans would be available on a first­

come, first-served basis. 

8. Auxili a ry Loans to Assist Stude nts, former l y Parent 

Loans, offers subsidized loans up to $3,000, now 

includes sel f -supporting studetns. OBRA raise d 

the interest from 9 % to 14 %. 

D. The Administration is considering a block grant that 

might include CWS, SEOG, NDSL, with a total budget of 

about $1 billion, although CWS alone gets $550 million 

now. Institutions are opposed. 

E. The New York Times article on No vember 3, 1981, "Federa l 

Budget Cuts Imperil Chances of Many Poor for College 

Education," reported on how cuts are a ffecting students 

a t Manhattan Community College: 



- 37 -

Uncertainty abounds these days ·at com­
munity colleges and hundreds of other 
institutions where the vast majority of 
students come from families that earn 
less than $12,000 a year and rely al­
most entirely on Federal assistance for 
tuition and living expenses. 

Recent Federal cuts at one such school, 
Manhattan Community College, have already 
amounted to a loss this year of more than 
$300,000 in Federal Pell grants and 
$100,000 in student loans. If further 
proposed cuts are approved, the college 
could lose at least $250,000 more in 
work-study programs, loans and grants, 
including 150 jobs that help students 
earn money necessary to meet their ex­
penses. 

The 9,000 students at Manhattan Community, 
whose classrooms are scattered about 
midtown Manhattan, are like many others 
at community colleges. More than half 
are over the age of 22, two-thirds are 
women and more than half are married or 
have at least one dependent. More than 
a third receive welfare payments. Most 
of them are the . first in their families. 
to attend college. 

Because many of these students rely on 
a. number of social programs that are 
expected to be curtailed under the pro­
posed cuts, educators say they are among 
the most vulnerable. Even though individ­
ual reduqtions may appear small - students 
receiving Pell grants lost only $30 this 
year - educators say the cumulative effect 
of such cuts, at a time of rising costs 
and reductions in other programs, can tip 
the balance between a student's looking 
to education to better his employment pos­
sibilities or giving up. 

''rhese students get a double whammy, 11 said 
Howard J. Entin, director of financial aid 
at Manhattan Community, adding that he was 
particularly concerned that reductions in 
day care would prevent students with young 
children from continuing their studies. 
Reductions in food stamps, too, he said, 
would mean that some students who do 
not now request educational grant money 
for living expenses may have to do so 
putting increased pressure on a dwindling 
supply of funds. 



- 38 -

V. SCHOOL-BASED CHILD NUTRITION PROGRAMS 

(Information in thi.s section came from: 

Bob Greenstein, Progra.'11 o.n Food Assistance and Poverty 
202-

Ed Cooney and other staff, Food Research and Action (FRAC) 
202-393-5060) 

A. In 1967 when LDF began to challenge patte:rnsof dis-

crimination against poor and minority children in the 

National School Lunch Program, only 2 million pupils 

received free or reduced price meals at school. Today 

10.3 million children receive lunch free and an addi-

tional 1.9 million at a reduced price. Bob Greenstein, 

the former administrator of USDA's Food and Nutrition 

Service, estimates that minority children are 40-50% 

of the recipients of free and reduced price lunches. 

30,000 schools now provide breakfast to a 3.5 million 

children, 85% of whom are low-income. The Child Care 

Program enables over 700,000 needy preschoolers to get 

meals and snacks in child care or family day care 

centers. Summer Food Service Programs, sponsored by 

churches and other private groups, as well as public 

agencies, and designed to sustain needy children during 

the vacation period, served 2,3 million children last 

summer and also provided employment to thousands of 

teen-agers. 

B. Reagan has claimed that school lunches are in his safety 

net, but child nutrition programs may become a tragic 

example of the safety net that has been "ripped to 

shreads," to quote Mayor Coleman Young . " Hungry chil­

dren cannot learn," a.nd "Feed Ki ds ·- It's the Law" were 



- 39 -

our banners in the '70's. The Administration is now 

threatening the viability of programs that have con-

tributed significantly to the well-being and achieve-

ment of low-income children by drastically reducing 

budgets, lowering nutritional standards, tightening 

eligibility for free and reduced meals, increasing 

charges to pupils and by actions that result in the 

total phasing out of nutrition programs. 

1. School Lunches suffered a $1 billion, or 29%, 

cut in OBRA. USDA subsidizes school lunch pro-

grams at reimburs.ement rates that vary for paid, 

reduced or free meals. There is a smaller re-

duction in the general subsidy for free meals 

and the special additional subsidy to schools 

with 60 % or more recipients of free or reduced 

price lunches. 

Charges for reduced price meals will rise from 

20¢ to 40¢ and the average charge to full-pay-

ing students is expected to rise to $1.00. The 

Raleigh News and Observer reported on September 14, 

1981, that: 

Both administration and legislative 
leaders generally agree that state 
dollars should not be used to make 
up any of the $294 million in federal 
money that is expected to be cut from 
North Carolina during the two year 
budget period .•• a $3.41 million a 
year reduction in the school lunch 
program ••• could drive up the cost 
of school lunches by 2 0 cents a 
meal. 



- 40 -

Putting a larger burden on paying students may 

appear to preserve the safety net but it really 

will_ not. The Administration is using stricter 

eligibility and verification procedures as de-

vices for budget-cutting and many pupils affected 

will be poor • . Under stricter eligibility standards, 

thousands of marginal families will no longer 

qualify for free meals. (Eligibility is tied to 

food stamp eligibility, currently set at 130 % of 

poverty, with no standard deductions, or $10,985 

for a family of four.) Eligibility for reduced 

price lunches is set at 185% of poverty, or 

$15,630 for a family of four. Families above 

that level, whose children might have qualified 

for reduced price runches at 20¢ last year, will 

now be charged the full rate. Many families of 

the working poor, with both parents employ ed at 

slightly above the minimum wage, cannot afford 

to buy $1.00 lunches for their children. Faced 

with the withdrawal of large numbers of marginal 

and middle income families who cannot, or will 

not pay $1.00 for lunch, many schools will phase 

out their child nutrition programs, either because 

they can no longer benef it f rom economies of 

scale or because they don't want to be bothered. 

Poor children who would qualify for a free meal 

will be left completely destitute. Furthermore, 

the verification of need has been made more 

difficult. Using more complicated procedures, 



- 41 -

New York City has 250,000 children who have not 

fulfilled verification requirements for this 

school term and who may be declared ineligible 

on technical grounds for free or reduced price 

meals after Christmas. The United States Con-

ference on Mayors reported in The FY 82 Budget 

and the Cities (November 20, 1981) that increased 

costs and prices have already resulted in de-

creased participation. 

For example in Baltimore 4918 children 
have dropped out of the school lunch 
program. As a result, some schools 
may not be able to continue their pro­
grams. Of 54 cities providing informa­
tion about the impact of the cuts on 
their school lunch program, almost a 
third said the effects was disastrous, 
another third said substantial, and 
the remainder indicated moderate 
effects. (p.35) 

"Let 'em eat ketchup!" - the effort to achieve 

budgetary cuts by lowering the nutritional value 

of a school lunch from one-third to one-fourth 

of the Recommended Dietary Allowance and by per-

mitting schools to count catsup and pickes as 

vegetables died from a deluge of public outrage 

and ridicule. The issue has not died . The 

Secretary will be issuing revised nutritional 

regulations. 

2. School Breakfasts, evaluated by the Congressional 

Budget Office as the most nutritionally effective 

and least costly of all the child nutrition programs, 

suffered reimbursements cuts of 39 % for reduced 



- 42 -

price and 50 % for fully-paid meals. Further­

more , the definition of schools in "severe need" 

that qualify for additional subsidies has been 

changed to include only those schools 40 % of 

whose pupils receive a free or reduced price 

lunch. 

3. The Summer Food Service Program suffered a cut 

of $90 million. OBRA imposes new requirements 

on eligible sponsors and areas. Previously, 

community action agencies, churches , YM-YWCA's, 

and organizations of poor people could sponsor a 

program. Now, onl y school food authorities, 

residential camps and certain public bodies 

can be sponsors. Of the 2.3 million children 

served in 1 980 only 920 ,000 were served by the 

kinds of bodies that can now qualify as sponsors. 

Furthermore, the new requirement that the program 

can operate only in areas where over 50 % of the 

children meet guidelines for free or reduced price 

meals, will eliminate many rural areas. 

4. The Special Milk Program was cut $95 million and 

will be restricted to schools that have n e ither 

a breakfast nor a lunch program. Children of 

working poor families, forced to bring lunches 

from home because they cannot pay the full price 

for a meal, will be unable to buy milk. 

c. Knowledgeable informants predict that Reagan may propose 

the total phasing out of subsidies to nonpoor pupils, 



- 43 -

that would undoubtedly result in dropping out of 

thousands of schools from nutrition service. Summer 

Food Service may be completely abolished. A block 

grant for all child nutrition programs other than the 

lunch program is being considered. 



- 44 -

VI. SCHOOL-RELATED VOCATIONAL EDUCATION AND SCHOOL-RELATED 
TRAINING PROGRAMS 

This section will be written later. The situation is in 

flux; the future is difficult to anticipate at the present 

time. OBRA reauthorized vocational education until FY 84. 

CETA youth programs have been drastically cut and are due 

to expire next September. 



- 45 -

VII. AID TO THE HANDICAPPED 

A. The pervasive misclassification of black children and 

callous indifference to their needs have resulted both 

in the disproportionate representation of blacks in special 

education and in the denial of services to those who are 

really handicapped. 

Traditionally, handicapped children and 
nonwhite children have been the most 
vulnerable to discrimination in education, 
the most likely to be excluded or un­
served by the public schools. Obviously, 
when a child is both handicapped and a 
minority (s)he is in danger on two counts: 
in double jeopardy. · 

Double Jeopardy: The Plight of Minority 
Students in Special Education, Massachusetts 
Advocacy Center, 1978 

B. Federal legislation has provided the legal framework 

for major breakthroughs in addressing the educational 

needs of the handicapped. The Rehabiliation Act of 

1973, Section 504, Subpart D (Preschool, Elementary 

and Secondary Education) deals with nondiscrimination 

on the basis of handicap and requires equal education-

al opportunity to handicapped persons by recipients of 

Federal funds. Regulations were promulgated May 4, 

1977. The Education of the Handicappaed Act (EHA) of 

1975, PL 91-230, Part B, as amended by PL 94-142, is 

one of the most prescriptive laws ever enacted. It 

defines the Federal role as assuring: that all handi-

capped children have available free and appropriate 

public education designed to meet their unique needs; 

that the rights of handicapped children and parents are 



- 46 -

protected; that efforts to educate the handicapped are 

effective. Federal financial assistance is provided to 

states and localities. State educational agencies (SEA) 

apply for and receive entitlement grants based on the 

number of handicapped children, ages 3-21, receiving 

special education and related services. Regulations issued 

August 23, 1977, for full implementation in September 

1980, address: the identification, location and evaluation 

of handicapped children; the development of individualized 

educational programs (IEP); creation of comprehensive per­

sonnel development systems; counting of handicapped chil- . 

dren for allocation purposes; services to be provided to 

assure free, appropriate public education (FAPE); priorities 

in the use of Part B funds; administrative details and 

procedural safeguards (complaints, notice, hearings, due 

process). 

C. The Reagan Administration has declared EHA to be a major 

rule and a priority target for deregulation. EHA has not 

yet been consolidated into a block grant. Some informants 

believe the Administration may seek legislation to abolish 

or substantially revise EHA. The Office of Special Educa­

tion's (OSE) Briefing Paper: Initial Review of Regula­

tions Under Part B of the Education of the Handicapped Act, 

as Amended September 1, 1981, prov ides clear indication 

of the options under regulatory reform that the Administra­

tion is considering that would seriously weaken the im­

plementation of EHA. As the date for the full implementa­

tion of the EHA regulations approached, DE responded to 



- 47 -

concerns for guidance andappointed a Task Force on Equal 

Educational Opportunity for Handicapped Children that 

recommended in October 1980 that formal guidance be pro­

vided~ OSE and OCR published on December 24, 1980, a 

Notice of Intent to Public Regulations. OSE's Briefing 

Paper reports the comments received (also taking note of 

judicial decisions and areas under litigation) and in­

corporates some in the options that the Administration 

is reviewing. The deregulated regulations for EHA and 

Sec. 504 are due soon. Some appear to be scheduled for 

December 1981; others for January and March 1982. 

D. OSE's Briefing Paper identifies 16 "opportunities for 

deregulation," determines in each case how regulations 

expanded upon the statute, especially notes how the regula­

tions have been burdensome or have required excessive 

paperwork, and lists options for change. This detailed 

74 page document cannot be easily summarized. Here are 

the hi~hlights of the 16 issues under debate: 

1. Definitions 

Whether OSE was justified in breathing life into 

EHA by expanding on definitions or whether states 

should be allowed to make their own definitions 

is critical. It affects such issues as: the scope 

of special education; the precise meaning of "at 

no cost" and whether it includes noneducational 

services; the definition of handicapping conditions 

that adversely affect education; how children are 

evaluated to determine handicapping; whether ex­

clusions, e.g. for excessively disruptive children, 



- 48 -

should be allowed; whether the scope of mandated 

related services should include noneducational, 

health- related or life support services; and 

labeling, especially of learning-disabled children. 

2. State Plans 

EHA requires states to file plans that assure free 

appropriate public education (FAPE) to all handi­

capped children. Changes under consideration could 

limit current requirements for : timelines for 

FAPE; submission of data and financial information; 

providing statistical profiles on the needs of 

children; priorities for and descriptions of ser­

vices to handicapped children; submission of 

methods and data for the identification, location 

and evaluation of the handicapped; procedures for 

IEP; meeting the requirement of the least restrictive 

environment; and personnel development. 

3 . Local Education Agency (LEA) Application to SEA 

EHA required assurances that LEA's use Federal funds 

for excess costs (and not supplant local funds) , 

establish timetables to meet the full services goal 

with FAPE for all handicapped children, and in­

volve parents. The current regulations require 

description and documentation of the policies and 

procedures that the LEA will implement to fulfill 

the commitment for an IEP for each child. We know 

from our experiences in other areas that stripping 

the regulations back to a mere assurance from the 

LEA would gut the program. 



- 49 -

4. State Advisory Panels 

The regulations expand on the statutory language 

and require balanced and representative panels, 

adequate public notice, and interpreters as ap­

propriate. The substitution of "non-binding" 

guidance to the states in this area could result 

in the absence of advocacy groups from these over­

sight bodies. 

5. Allocation of Funds; Reports 

Clearly addressing the evidence that school dis­

tricts have misclassified children to get Federal 

funds, EHA limits the allocation of funds to 12 % 

of children ages 5-17 and caps the number of chil_ 

dren counted as having specific learning disabilities 

to one-sixth of the 12% until Federal criteria 

have been promulgated. EHA requires DE to conduct 

studies and assessments and to submit reports to 

the Congress and the public concerning the number 

of children needing special education, the number 

receiving FAPE, the evaluation of state efforts to 

assure that children are being educated in the 

least restrictive environment and of the effective­

ness of the IEP. Inasmuch as EHA is especially 

prescriptive in this area, the Briefing Paper 

focuses on the regulation's criteria for counting 

children and the revision of the section on data 

collection to permit states to determine their own 

procedures for meeting reporting requirements . Any 



- 50 -

deviation from nationally mandated data collection 

procedures would certainly be a regression. 

6. Free Appropriate Public Education (FAPE) 

EHA requires states to provide special education 

and related services to all handicapped children 

(3-21) at public expense and to establish priorities 

for implementing this requirement. The regulations 

expand on EHA to ensure inclusiveness of coverage. 

What is provided for some handicapped must be 

provided for all. Handicapped must have equal 

access to services provided to nonhandicapped. 

For example, if· state law or a court order requires 

that education be provided in any category, then 

· the state must make FAPE available to children 

of the same age in that category. Handicapped 

children must be served in the same proportion as 

nonhandicapped in an educational area. Residential 

placements where required must be made available 

at no cost for room and board and nonmedical care. 

Handicapped children must have equal opportunities 

for participation in nonacademic and extracurricular 

activities, including physical education. This 

section goes to the heart of the controversy over 

what are the educational and related services that 

states must provide. 

7. Extended School Year Program 

Neither EHA nor the regulations specifically address 

this issue, but it has been a matter of parental 



- 51 -

concern and litigation. DSE noted that all judi-

cial decisions on record invalidated state practices 

that precluded extended services for handicapped 

children. DE might decide to leave this issue to 

the courts for rulings on a case by case basis, to 

define narrowly the target population eligible for 

extended services, or to get a legislative solution, 

as noted in the following report from a DE staff member: 

In Armstrong v. Kline, 476 F.Supp. 583 
(E.D. Pa. 1979) a federal district court 
held that Pennsylvania's 180-day annual 
limit o n public education provided to any 
child precludes formulation for individual­
ized educational programs for mentally re­
tarded children in violation of their right 
to a free appropriate public education under 
the Education for All Handicapped Children 
Act. The Court of Appeals for the Third 
Circuit affirmed in July 1980. 49 LW 2105 . 
In briefs as amicus curiae the Department 
of Justice in the past took the position 
that the 180-day limit~tion also violated 
Section 504 of the Rehabiliation Act of 
1973. Department of Education General Coun­
sel Dan Oliver in a memorandum to Secretary 
T.H. Bell states that a legislative solu­
tion is appropriate to get around these 
court rulings. He states he has drafted 
proposed legislation providing that noth­
ing in Section 504 of the Education f or 
All Handicapped Children Act shall be 
interpreted to require education of handi­
capped students beyond the normal school 
year. (On May 4, 19 81 Senator Hatch in­
troduced s. 1103 a nd on May 20., 1981 
Representative Erlenborn introduced H. R. 
3645, legislation proposed by the ad­
ministration to repeal the provision of 
the Education for All Handicapped Children 
Act that imposes upon recipients of f eder­
al funds any special obligations for 
handicapped students. See, in particular, 
Section 313(b) of the Elementary and 
Secondary Education Consolidation Act of 
1981.) 
OCR has a number of 180-day annual limit 



- 52 

cases, some of which are ready for ad­
ministrative enforcement. 
Other courts have also addressed the 
issue, each concluding that the inflexible 
limitation on the amount of annual in­
struction available to handicapped child­
ren is inconsistent with the requirements 
of federal law. Georgia Association of 
Retarded Citizens v. McDaniel, No. 78-
1950-A (N.D. Ga. Ap. 2, 1981); Anderson 
v. Thompson, 495 F.Supp. 1256 (E.D. Wisc. 
1980): In re Richard K., Educ. for the 
Handicapped Law Report 551:192 (D. N.H. 
Je. 8, 1979). 

8. Suspension and Expulsion of Handicapped Children 

Although this issue was not specific.ally addressed 

by EHA or the regulations, there has been a strong 

demand for a clearly articulated national policy, 

in view of allegations that handicapped minority 

children are disproportionately suspended or ex-

pelled. Whether misconduct is related to a child's 

handicapping condition, to misclassification, or 

to an overeagerness to charge students that are 

different with being disruptive, are matters in 

great dispute. OSE reports the growing body of 

case law that the exclusion of handicapped chil-

dren for 10 days or more is a change of placement 

that must trigger a due process hearing under 

EHA's protection. 

9. Out of State Placement of Handicapped Children 

EHA and the regulations do not specifically address 

out of state placement but it has become an issue 

because of the costs; unresolved matters related 

to provision of noneducational services; responsi -



- 53 -

bility for monitoring when placements are made 

by other agencies; findings during compliance 

visits that out of state students were not 

receiving FAPE. The interstate nature of these 

placements certainly indicates the neeg for Feder­

al regulations and oversight machinery. 

10. Individualized Education Program (IEP) 

The regulations elaborate on the requirement in 

EHA that the state plan must provide for assurances 

by the LEA that written agreements with named 

parties have been developed and are annually re­

vised. The regulations set specific deadlines 

for the scheduling of the conference on the IEP 

and its implementation prior to placement, provide 

for fuller participation in the IEP conference 

and expand on the rights of parents. The Briefing 

Paper makes an important admission that should 

cast doubt on the validity of the entire process 

of regulatory revisions: The Department discovered 

that "although there are still complaints about 

paperwork and time burdens, these factors are 

perceived as less burdensome over time as benefits 

are derived by children and staff from the pro­

cess." (p.52) Revoking or revising those portions 

of the IEP regulations solely because they are 

not specifically mandated by EHA but which are 

admittedly benefiting children would certainly 

be shortsighted. 



- 54 -

11. Services Provided to Children Place in Private 

Schools by Their Parents 

OSE claims that the regulations go beyond EHA 

because they define "private school handicapped 

children," and include requirements of Education 

Division General Administrative Regulations (EDGAR) 

regulations that address such matters as compara­

bility of benefits and expenditure levels, non­

segregation on the basis of r~ligion and non­

supplanting. Apparently, there is considerable 

misunderstanding and confusion over this issue. 

In view of this Administration's public position 

on the involvement of private schools and the sup­

port to .parents who choose to enroll their children 

in them, the likelihood is that revised regula~ 

tions will facilitate this process. 

12. Comprehensive System of Personnel Deve·lopment 

The regulations apparently expanded on EHA by re­

quiring SEA's to include more personnel in inservice 

training; to assure that personnel are "qualified," 

to involve other agencies; to conduct a needs 

assessment to identify and prioritize needed areas 

of training and populations to be trained; to 

compile and disseminate to a much broader audience 

the results of research and promising developments; 

to reassess educational practices and identify re­

sources to assist in meeting personnel needs; and 



- 55 -

to describe technical assistance that SEA's 

will prm.ride to LEA' s. 

13. Due Process Procedures 

EHA's provisions cover rights of parents or 

guardines to file complaints, to request hear­

ings conducted by LEA or SEA employees not in­

volved in the child's education, to appeal 

decisions of hearing officers, and to initiate 

civil action. The regulations further allow 

for agency-initiated due process hearings; 

require the agency to advise parents of legal 

or other services; further restrict who can con­

duct hearings; expand on the rights of parties; 

and impose more requirements on reviewing off.icers. 

DE is clearly considering the relaxation or 

revocation of some or all of the due process 

procedures in favor of "mediation procedures 

aimed at reducing the frequency of more formal 

and burdensome hearings, and whether certain 

disciplinary actions ... trigger due process rights." 

14. Non-discrimination in Evaluation Procedures 

EHA specifically requires the use of testing 

and evaluation materials that are not dis­

criminatory and are administered in the child's 

native language unless clearly not feasible. 

In view of OSE's admission that "Federal com­

pliance visits have shown persistent problems 

with overrepresentation of minority children 



- 56 -

in special education placements and certain 

categories of handicapping conditions," (p.66) 

the elaborations on the statute by the regula-

tions are not surprising. According to the 

regulation~, tests and evaluation materials 

must be validated, be administered by trained 

personnel, address specific areas of educational 

need and not just general intelligence; and be 

evaluated by a multidisciplinary team. The child 

must be assessed in all areas related to the 

suspected disability. There are certain specific 

requirements for the testing of sensorially, 

manually or speech impairep children. Weakening 

these regulations that sought to address P.roblems 

related to evaluation procedures that have surfaced 

during compliance reviews, as well as in complaints, 

would indicate that OSE is not building its own 

experience. 

15. Least Restrictive . Environment (LRE) 

The law is very clear. A condition of funding, 

the State must demonstrate that it has established 

••• procedures to assure that, to the 
maximum extent appropriate, handi­
capped children, including children 
in public or private institutions or 
other care facilities, are educated 
with children who are not handicapped, 
and that special classes, separate 
schooling, or other removal of handi­
capped children from the regular 
educational environment occurs only 
when the nature or severity of the 
handicap is such that educa~ion in 
regular classes with the use of 



- 57 -

supplementary aids and services cannot 
be achieved satisfactorily •••• 

The regulations require each agency: to have a 

continuum of alternative placements, in sufficient 

number to implement each child's IEP; to determine 

placements annually based on the child's IEP; to 

place children close to home and, if possible, in 

the same school (s)he would have attended if not 

handicapped; to integrate handicapped and non-

handicapped children to the · maximum extent appro-

priate in nonacademic activities; to enter into 

special implementation procedures with other agencies. 

SEA's are required to offer technical assistance 

and training to all public agencies in the support 

of ~RE and to conduct monitoring activities. Clear-

ly, OSE reports that the overwhelming number of 

comments support LRE but there is considerable con-

fus ion concerning how it should be implemented. 

LRE has been one of the focal areas of compliance 

rev iews ; violations have been cit ed ; LRE is not 

understood or philosophically accepted . One option 

presented in the Briefing Paper - to rely on the 

statutory language, leave standard-setting to the 

courts and define Federal role as largely research -

would be an abdication of leadership. 

16. Confidentiality of Information 

EHA requires appropriate action to assure pro-

tection of the confidentiality of per~onally 

identifiable data and records and also the pro-



- 58 -

vision to parents of opportunities to examine 

all relevant records with respect to their child. 

The regulations expand on the statute by: defin­

ing certain terms; requiring agencies to advise 

parents of confidentiality procedures, of the 

types and locations of education records, of 

parental rights of access to them, and of pro­

cedures for challenging and supplementing infor­

mation in them; and requiring maintenance of in­

formation on access of parties to education 

records and parental consent for the release of 

records to persons not directly involved in the 

child's education. The regulations also spell· 

out procedures related to personnel involved in 

procedures, the destruction of records and the 

privacy rights of children. The mention by the 

Briefing Paper of the burdensome nature of these 

regulations and their alleged duplication of, · or 

inconsistencies with other Federal regulations 

suggests that this area mai be a major target · 

for regulatory reform. 

E. The current level of funding for handicapped education, 

$1.178 billion, was reduced to $1.149 billion in OBRA. 

Reagan has proposed a budget of $784 million, which is 

a 33.5 % cut from the current level. 



- 59 -

VIII. CIVIL RIGHTS ENFORCEMENT - PART I 

(This section reflects consultation with: 

Nathaniel Scurry, Office of Regulatory Affairs, OMB 
Laverne Collins, Office of Regulatory Affairs, OMB 
Marialice Williams, Civil Rights Division, OMB 
Judith Winston, Assistant General Counsel for Civil Rights, 

Department of Education 
Children's Defense Fund Staff Members) 

On the one hand, the Reagan Adminstration projects an 

image of single-mindedness of purpose in the area of 

civil rights enforcement - anti-busing and pro states 

rights. On the other hand, it is hard to identify who 

is calling the shots and coordinating the implementation 

of the overall goal. There is considerable decentraliza-

tion of effort. One hears of turf battles - between 

Education and Justice, between Education and OMB, and 

internally within Education between the Office of General 

Counsel and OCR, between OCR and the major program desks, 

etc. However, we must not be lulled into thinking there 

is only rhetoric and no game plan. The media focus on 

the more obvious areas of retrenchment, especially regard-

ing the desegregation of public schools and state s y stems of 

higher education. I plan to do a status report on the dis-

mantling of dual systems of postsecondary education in 

preparation for the filing of our Motion for Further Relief 

in Adams. Perhaps Bill Lann Lee could write a report on 

developments in the Department of Justice. In anticipation 

of those reports, this memo will not address the litigation 

posture of the Reagan Administration in education cases. 

My investigations have identified for further exploration 

at least seven developments in education where the civil 



' .. 
- 60 -

rights of blacks are threatened through executive action 

that may not necessarily involve litigation. 

A. The educational delivery systems are vulnerable 

to revisions or restructuring in ways that could 

substantially l 'imit opportunities for blacks. The 

Aid to the Handicapped will probably be the first, 

largely because the authorizing legislation is so 

prescriptive. We must become more knowledgeable 

about the civil rights implications of Reagan's plans 

to alter these systems. 

B. The full impact of the deregulatory and anti-paperwork 

mode of this Administration could have devastating 

implications for blacks. 69 regulations (so far, 

only a few in education) are targeted for priority 

review. The Administration's goal is to reduce 

. paperwork 25% in two years. Some of the "burdensome" 

paperwork is data collection - on a regular annual 

or biennial basis or through special surveys of edu­

cational ·· institutions - which is the absolutely 

essential ingredient in an effective civil rights 

enforcement program. LDF is in a key position to 

make constructive recommendations based on our 

involvement with Federal educational data systems. 

The next few months will be critical. 

C. The emphasis on efficiency and cost~benefit, combined 

with a commitment to negotiation and reliance on 

good faith will result in the resolution of charges 

of discrimination without letters of findings (LOF), 



- 61 -

specific demands for change, or sanctions , Under 

the banner of good management, claiming result­

orientation and eschewing adversarial posturing , 

the Administration has already washed out charges 

that surfaced during OCR compliance reviews or 

through complaints and has negotiated weak concilia­

tion agreements. LOF trigger the Adams time frames 

which OCR is determined to avoid. 

D. The Administration is determined to limit the cover­

age of key civil rights acts, if possible through 

executive action. The redefinition of Federal 

financial assistance to exclude the major student 

aid programs and the limitation of Title IX cover­

age just to programs that receive Federal funds -

explorations that are diligently underway - if 

successful would be the precursors to gutting .Title 

VI and Sec. 504. Furthermore, key Federal statutes 

are being scrutinized to ascertain whether executive 

regulations and enforcement activities have gone 

beyond the strict language of the law. The Ad­

ministration has also announced its readiness to 

return to Congress for clarification statu.tes with 

the indisputed intention to limit the discretionary 

powers of Federal agencies. 

E. Although there is vigorous discussion within the 

Administration concerning revisions in the Title 

VI regulations or the Adams Criteria, the "game 

plan" so far is apparently decimation through re­

interpreting or just ignoring them. Monitoring by 



- 62 -

advocacy groups will become much more burdensome. 

We will need to create more effective machinery for 

discovering what is going on, in the Administration 

and out in the field. 

F. Major areas that are s ·ubject to compliance activities 

will fall between the cracks . The proposed OFCCP 

revised regulations, if promulgated, would eliminate 

most institutions of higher education from coverage 

under the Executive Order. OCR has been accepting 

higher education desegregation plans that commit states 

to file affirmative action plans with OFCCP in lieu 

of plans under the ·Adams Criteria. Hundreds of in­

stitutions and tens of thousands of employees will be 

under no Federal agency surveillance. Blacks who 

suffer discrimination would have only Title VII - and 

an EEOC that is actively discouraging class· action 

complaints. 

G. OMB is key. Thank you David Stockman for impelling 

us to this long overdue reaiization.