i 

Fiscal Year 2004 Budget 

Summary and Background Information 

TABLE OF CONTENTS 

Page

I. SUMMARY OF THE 2004 BUDGET.........................................................................................1

II. THE 2004 EDUCATION BUDGET BY PROGRAM AREA.....................................................11

A. ELEMENTARY AND SECONDARY EDUCATION ............................................................11

Overview..................................................................................................................................11

Title I Grants to Local Educational Agencies ...................................................................... 13

Title I Evaluation.............................................................................................................. 14

State Assessment Grants ................................................................................................... 14

Reading First State Grants.................................................................................................. 15

Early Reading First.............................................................................................................. 15

Even Start ........................................................................................................................... 16

Literacy Through School Libraries ...................................................................................... 16

Reading Is Fundamental/Inexpensive Book Distribution..................................................... 16

Ready-to-Learn Television.................................................................................................. 17

Improving Teacher Quality State Grants............................................................................. 17

Early Childhood Educator Professional Development Grants............................................. 17

Mathematics and Science Partnerships.............................................................................. 18

Troops-to-Teachers............................................................................................................. 18

Transition to Teaching......................................................................................................... 18

Teaching of Traditional American History ........................................................................... 18

Educational Technology State Grants................................................................................. 19

21st Century Community Learning Centers......................................................................... 19

State Grants for Innovative Programs................................................................................. 20

Charter School Grants ........................................................................................................ 20

Credit Enhancement for Charter School Facilities .............................................................. 20

Choice Incentive Fund ........................................................................................................ 21

Voluntary Public School Choice.......................................................................................... 21

Magnet Schools Assistance................................................................................................ 21

Safe and Drug-Free Schools and Communities.................................................................. 22

State Grants .................................................................................................................... 22

National Programs........................................................................................................... 22

Mentoring Initiative .......................................................................................................... 22

Character Education ........................................................................................................... 22

Civic Education Programs................................................................................................... 23

Physical Education Initiative................................................................................................ 23

Fund for the Improvement of Education.............................................................................. 24

Advanced Placement .......................................................................................................... 24

English Language Acquisition............................................................................................. 24
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Elementary and Secondary Education, continued: 

Page 

Title I State Agency Programs ............................................................................................ 25

Migrant Education...............................................................Error! Bookmark not defined.

Neglected and Delinquent ............................................................................................... 26

High School Equivalency Program (HEP)........................................................................... 26

College Assistance Migrant Program (CAMP).................................................................... 26

Education for Homeless Children and Youth ...................................................................... 26

Indian Education ................................................................................................................. 27

Education for Native Hawaiians .......................................................................................... 27

Alaska Native Education Equity .......................................................................................... 28

Training and Advisory Services (Title IV of the Civil Rights Act)......................................... 28

Impact Aid ........................................................................................................................... 29

B. SPECIAL EDUCATION AND REHABILITATIVE SERVICES ............................................30

Overview..................................................................................................................................30

Special Education State Grants...............................................................................................31

Grants to States .................................................................................................................. 31

Preschool Grants ................................................................................................................ 31

Grants for Infants and Families........................................................................................... 31

Special Education National Activities ......................................................................................32

State Improvement.............................................................................................................. 32

Research and Innovation .................................................................................................... 32

Technical Assistance and Dissemination............................................................................ 32

Personnel Preparation ........................................................................................................ 33

Parent Information Centers................................................................................................. 33

Technology and Media Services......................................................................................... 33

Rehabilitation Services and Disability Research .....................................................................34

Vocational Rehabilitation (VR) State Grants....................................................................... 34

Vocational Rehabilitation Incentive Grants ......................................................................... 34

Client Assistance State Grants ........................................................................................... 35

Training ............................................................................................................................... 35

Demonstration and Training Programs ............................................................................... 35

Protection and Advocacy of Individual Rights..................................................................... 35

Independent Living.............................................................................................................. 36

Program Improvement ........................................................................................................ 36

Evaluation ........................................................................................................................... 36

Helen Keller National Center for Deaf-Blind Youths and Adults ......................................... 37

National Institute on Disability and Rehabilitation Research (NIDRR) ................................ 37

Assistive Technology .......................................................................................................... 38

Access to Telework Fund.................................................................................................... 38

Special Institutions for Persons with Disabilities ................................................................. 39

American Printing House for the Blind............................................................................. 39

National Technical Institute for the Deaf.......................................................................... 39

Gallaudet University ........................................................................................................ 39
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Page 

C. VOCATIONAL AND ADULT EDUCATION ........................................................................40

Overview..................................................................................................................................40

Vocational Education (Secondary and Technical Education) ............................................. 40

Adult Education (Adult Basic and Literacy Education)........................................................ 41

National Institute for Literacy........................................................................................... 41

D. STUDENT FINANCIAL ASSISTANCE ..............................................................................42

Overview..................................................................................................................................42

Student Aid Summary Tables ............................................................................................. 43

Tax Benefits for Postsecondary Students and Their Families ............................................ 44

Pell Grants .......................................................................................................................... 45

Supplemental Educational Opportunity Grants................................................................... 46

Work-Study ......................................................................................................................... 47

Perkins Loans ..................................................................................................................... 47

Federal Family Education Loans and Direct Loans ............................................................ 48

E. HIGHER EDUCATION PROGRAMS .................................................................................52

Overview..................................................................................................................................52

Title III: Aid for Institutional Development............................................................................ 53

Developing Hispanic-serving Institutions ............................................................................ 53

International Education and Foreign Language Studies ..................................................... 54

Fund for the Improvement of Postsecondary Education (FIPSE) ....................................... 54

Tribally Controlled Postsecondary Vocational and Technical Institutions ........................... 54

Federal TRIO Programs...................................................................................................... 55

Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) ........ 55

Scholarships and Fellowships............................................................................................. 56

Child Care Access Means Parents in School...................................................................... 56

Teacher Quality Enhancement............................................................................................ 57

GPRA Data/HEA Program Evaluation ................................................................................ 57

Academic Facilities ............................................................................................................. 57

Howard University............................................................................................................... 58

National Security Education Trust Fund.............................................................................. 58

F. INSTITUTE OF EDUCATION SCIENCES .........................................................................59

Overview..................................................................................................................................59

Research, Development, and Dissemination...................................................................... 59

Statistics.............................................................................................................................. 60

Assessment......................................................................................................................... 60
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Page

III. PROGRAMS PROPOSED FOR ELIMINATION ...................................................................61

IV. DEPARTMENTAL MANAGEMENT......................................................................................68

Overview..................................................................................................................................69

Department Employment .................................................................................................... 70

Program Administration....................................................................................................... 72

Student Aid Administration .................................................................................................. 72

Management Improvement ................................................................................................. 72

Office for Civil Rights...............................................................................................................74

Office of the Inspector General................................................................................................75

APPENDICES .............................................................................................................................76 

For further information on the Department and its activities, 

visit us at www.ed.gov, or call 1-800-USA-LEARN
The time for excuse-making has come to an end. With the No Child Left Behind Act, 

we have committed the Nation to higher standards for every single public school. 

And we’ve committed the resources to help the students achieve those standards. 

We affirm the right of parents to have better information about the schools, 

and to make crucial decisions about their children’s future. Accountability for results 

is no longer just a hope of parents. Accountability for results is the law of the land. 

President George W. Bush 

 January 8, 2003

I. SUMMARY OF THE 2004 BUDGET 

One year after President George W. Bush signed into law the No Child Left Behind Act of 2001 

(NCLB Act), State officials, administrators, and teachers across the country are hard at work 

making changes designed to help ensure that by 2013-2014, every student who attends an 

American school will be proficient in reading and mathematics. This far-reaching, bipartisan 

reauthorization of the Elementary and Secondary Education Act (ESEA) is based on 

accountability for results, choice, proven educational methods, and flexibility and local control in 

Federal education programs. 

In response to the NCLB Act, States are strengthening their accountability systems by setting 

tough annual progress objectives and expanding the assessments that will be used to measure 

that progress. School districts are emphasizing efforts to improve low-performing schools while 

providing new options for parents of students attending schools that do not improve, such as the 

opportunity to transfer to a better performing school or to use Federal funds to obtain 

supplemental educational services from the provider of their choice. 

Schools are using assessment data to identify areas where instruction must be improved, and 

adopting proven educational practices to make the changes needed to raise student 

achievement. Parents are learning more than ever before about how well schools are educating 

their children from the State and local “report cards” required by the NCLB Act, and are using 

this information to demand improvement from their schools and options for their children. 

President Bush and the Congress have provided significant resources to leverage the improved 

State and local accountability called for in the NCLB Act. In the first year of implementation, for 

example, ESEA funding jumped by more than $4.3 billion, or 24 percent, over the level provided 

for the final year of the old law. In addition, the new law included funding for activities, such as 

the new State Assessment Grants, that were essentially “unfunded mandates” under the old 

law. This reflected the 

President’s commitment to 

provide more resources for 

education in exchange for 

stronger accountability for 

results and on condition that 

Federal funds be used to 

support proven educational 

methods. The President’s 

2004 budget for education 

reflects this continuing 

commitment by providing 

additional resources to help 

ED Discretionary Appropriations

(Billions of Dollars) 53.1 49.9 50.3

42.2 35.6 33.5 29.9 26.6 23

1996 1997 1998 1999 2000 2001 2002 2003 2004

Note: 2003 and 2004 reflect President's request levels.
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NAEP Reading and Math Scores

190

200

210

220

230

240

1990 1992 1994 1996 1999

Average Scale Scores

States, school districts, and schools implement the NCLB Act and improve educational 

opportunities for all students. 

Consistent with the traditionally limited Federal role in the American system of education, this 

investment is focused squarely on meeting the needs of students from economically 

disadvantaged and minority backgrounds. These are students who have been left behind for 

too long, and President Bush has made meeting their educational needs at the K-12 level and 

beyond a cornerstone of his Administration. 

Total Department of Education Appropriations 

(in billions of dollars) 

 2003 2004 

 2002 Request Request

 Discretionary $49.9 $50.3 $53.1 

 Mandatory 6.2 10.1 8.2

 Total 56.2 60.4 61.4 

The President is requesting $53.1 billion in discretionary appropriations for the Department of 

Education in fiscal year 2004, an increase of $2.8 billion or 5.6 percent over the 2003 

President’s request. The 2004 request, together with the 2003 President’s budget, builds on the 

substantial Federal investment in education over the past six years, with discretionary 

appropriations rising from $23 billion in fiscal year 1996 to $49.9 billion in fiscal year 2002, an 

increase of 117 percent. 

Unfortunately, there is ample evidence that simply spending more money on education will not 

improve student achievement or close achievement gaps between poor and minority students 

and other students. For example, long-term trend data from the National Assessment of 

Educational Progress (NAEP) for 9-yearolds show that reading and math 

achievement has been nearly flat over 

the past decade. Results from the 2000 

NAEP reading assessment confirmed 

that the reading skills of the Nation’s 4th

graders have remained unchanged for 8 

years, with 37 percent of those tested 

scoring below Basic. 

For this reason, President Bush has 

focused new education investments on 

programs with a demonstrated record of 

success in improving educational 

outcomes, or on programs that have 

been fundamentally reformed by the No Child Left Behind Act. The President also has targeted 

new resources to programs that help to close the achievement gaps that persist among racial, 

ethnic, and socioeconomic groups across the country. 

The 2004 budget request for the Department of Education includes the following significant 

increases: $1 billion for Title I Grants to Local Educational Agencies, $1 billion for Special 

Math 

Reading 

(9-year olds) 
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Education Grants to States, $1.9 billion for Pell Grants, $50 million for Reading First State 

Grants, and $25 million for a proposed Choice Incentive Fund. 

These and other increases are offset in part by reductions that likewise reflect the President’s 

priorities for the Department, including the elimination of categorical programs and low-priority 

activities in favor of funding through the flexible State grant programs created by the NCLB Act. 

In addition, the Department used findings from the government-wide Program Assessment 

Rating Tool, or PART, to redirect funds from ineffective programs to more effective activities, as 

well as to identify reforms to help address program weaknesses. Increases for 2004 also are 

offset in part by the completion of one-time projects. 

In addition to the discretionary priorities described above, the request includes funding for 

mandatory programs, such as Vocational Rehabilitation State Grants and the student loan 

programs. Mandatory costs fluctuate from year to year due to changes in inflation, interest 

rates, and other factors. For 2004, new student loans provided under the Federal Family 

Education Loans and Federal Direct Loans programs will grow from $44.3 billion to $47.6 billion, 

an increase of $3.3 billion or 7.4 percent. 

The Department’s 2004 request is complemented by significant tax-related investments in 

education, such as a proposed refundable tax credit of 50 percent of the first $5,000 in tuition, 

fees and transportation costs incurred when parents transfer their child from a public school 

identified for improvement to another public or private school. The Administration also is 

proposing to expand from $250 to $400 the above-the-line deduction for qualified out-of-pocket 

classroom expenses incurred by teachers. Other existing tax-related benefits include education 

savings accounts (Coverdell IRAs) that permit up to $2,000 in annual contributions and tax-free 

withdrawals to pay educational expenses from kindergarten through college, tax-free 

withdrawals from qualified State tuition savings plans, up to $4,000 in above-the-line deductions 

for higher education expenses, and the HOPE and Lifetime Learning tax credits for 

postsecondary education tuition and fees. 

The combination of discretionary and non-discretionary resources in the President’s budget is 

focused on the following areas: 

SUPPORTING STATE AND LOCAL IMPLEMENTATION OF THE NCLB ACT 

In the year following the enactment of the NCLB Act, the Department of Education published 

comprehensive regulations and guidance to help States, school districts, and schools make the 

new law a reality in American classrooms. States and school districts began implementing the 

public school choice and supplemental educational services requirements during the 2002-2003 

school year. Now the Department is working to help States develop accountability plans that 

meet the demanding requirements of the NCLB Act, with five States obtaining approval of their 

plans early in January 2003. As President Bush said on the first anniversary of signing the 

NCLB Act into law, “We can say that the work of reform is well begun.” The 2004 budget 

request will help ensure that this work does not falter, but continues until “every public school in 

America is a place of high expectations and a place of achievement.” The request includes the 

following: 
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• $12.4 billion for Title I Grants to Local Educational Agencies, an increase of $1 billion or 

9 percent over the 2003 request, to give States and school districts additional resources to 

turn around low-performing schools, ensure that no child is trapped in such a school, and 

improve teacher quality. If enacted, the request would result in a $3.6 billion increase, or 

41 percent, in Title I Grants to LEAs funding since the passage of the NCLB Act. 

• $1.05 billion for Reading First State Grants, an increase of $50 million or 5 percent over the 

2003 request, to expand the nationwide effort to support comprehensive reading instruction 

for children in grades K-3. The request would help school districts and schools provide 

professional development in reading instruction for teachers and administrators, adopt and 

use reading diagnostic assessments for students in kindergarten through third grade to 

determine where they need help, implement reading curricula that are based on recent 

findings of the 2000 National Reading Panel report, and provide reading interventions for 

young grade-school children reading below grade level. 

• $100 million for Early Reading First, an increase of $25 million or 33 percent for the preschool component of the Reading First initiative. This program funds competitive grants to 

develop and support the school readiness of preschool-aged children in high-poverty 

communities. 

• $100 million for a new mentoring initiative that would support the development, expansion, 

and strengthening of exemplary school-based mentoring programs that meet the needs of 

at-risk middle school students. The initiative would partner with the USA Freedom Corps to 

encourage citizen service to help improve public education outcomes. 

• $185 million for Research and Dissemination, an increase of $10 million that would build on 

the significant increase proposed for 2003 to expand efforts to develop proven, researchbased practices for improving student achievement and disseminate those practices to 

States and school districts across the country. Research efforts would focus on improving 

teacher quality, reducing student behavior problems, and more effective math and reading 

instruction. 

• $390 million for State Assessment Grants to help States develop and implement—by the 

2005-2006 school year—the annual reading and math assessments in grades 3 through 8 

that are integral to the strong State accountability systems required by the NCLB Act. This 

request is particularly important because the Title I requirement for States to develop and 

administer the new assessments is contingent on continued Federal financial support for 

this purpose. 

• $665 million for English Language Acquisition to support flexible, performance-based 

formula grants to help ensure that limited English proficient (LEP) students learn English 

and meet the same high academic standards as all other students. The NCLB Act replaced 

a complex series of categorical grants to school districts and institutions of higher education 

with a flexible program that will enable States to design and implement statewide strategies, 

grounded in scientifically based research, for meeting the educational needs of LEP and 

immigrant students. 
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EXPANDING OPTIONS FOR PARENTS 

A key achievement of the No Child Left Behind Act was to give the parents of students in lowperforming schools the opportunity to transfer their children to a better-performing school. In 

fact, the Title I regulations require school districts to give parents a choice of more than one 

school, so that parents can exercise a real choice that best meets the educational needs of their 

children. However, in many school districts—particularly small rural districts but also in larger 

districts with many low-performing schools—there are too few options for parents seeking a 

quality education for their children. To help overcome this problem, the 2004 request includes 

the following proposals designed to ensure that parents have meaningful choices: 

• A new refundable tax credit for parents transferring a child from a low-performing public 

school would allow a credit of 50 percent of the first $5,000 in tuition, fees, and 

transportation costs incurred when a student’s regular school is identified for improvement 

and he or she transfers to another public or private school. Eligible students would be those 

who would normally attend a public school that did not make adequate yearly progress, as 

defined under the Elementary and Secondary Education Act, during the prior academic 

year. 

• $75 million for a new Choice Incentive Fund that would provide competitive awards to 

States, school districts, and community-based nonprofit organizations to provide parents the 

opportunity to transfer their children to a higher-performing public, private, or charter school. 

A major objective would be to fund applicants proposing to provide large numbers of 

students with expanded choice opportunities. 

• $25 million for Voluntary Public School Choice grants to give families better education 

options by encouraging States and school districts to establish or expand public school 

choice programs across a State or across districts. Grants would support planning, 

transportation, tuition transfer payments, and efforts to increase the capacity of schools to 

accept students exercising a choice option. 

• $220 million for Charter Schools Grants, which would support approximately 1,820 new and 

existing charter schools. The $20 million increase would initiate a new Per-Pupil Facilities 

Aid program, which will provide funds to States to assist charter schools in obtaining 

facilities. Federal funds will match funds for State programs that make payments, on a perpupil basis, to fund charter schools facilities. 

• $100 million for the second year of the Credit Enhancement for Charter School Facilities 

program proposed for 2003, which would assist charter schools in acquiring, leasing, and 

renovating school facilities. A major obstacle to the creation of charter schools is their 

limited ability to obtain suitable academic facilities. This new program would support 

competitive grants to public and nonprofit entities to help charter schools finance their 

facilities through such means as providing loan guarantees, insuring debt, and other 

activities to encourage private lending. 

INCREASING FLEXIBILITY AND REDUCING BUREAUCRACY 

The NCLB Act provides unprecedented flexibility for States and local educational agencies 

(LEAs) to combine resources from selected State formula grant programs to pursue their own 
-6- 

strategies for raising student achievement and ensuring that no child is left behind. For 

example, States and LEAs may transfer up to 50 percent of the funding they receive under four 

major formula grant programs to any one of the programs, or to Title I. The covered programs 

are Improving Teacher Quality State Grants, Educational Technology, Innovative Programs, and 

Safe and Drug-Free Schools and Communities. The new law also includes competitive 

flexibility demonstration programs that will permit up to 7 States and 150 LEAs to consolidate 

State formula grant funds in exchange for entering into performance agreements. Consolidated 

funds could be used for any educational purpose authorized under the ESEA. The President’s 

2004 budget funds the following programs that support this new flexibility: 

• $2.85 billion for Improving Teacher Quality State Grants, which gives States and LEAs 

flexibility to select the research-based strategies that best meet their particular needs for 

improved teaching that will help them raise student achievement in the core academic 

subjects. In return for this flexibility, LEAs are required to demonstrate annual progress in 

ensuring that all teachers teaching in core academic subjects within the State are highly 

qualified. 

• $700.5 million for Educational Technology State Grants to support State and local efforts, 

particularly in high-poverty districts, to improve student achievement through the effective 

integration of technology into classroom instruction. Funds may be used, for example, to 

train teachers to use technology, to develop courses in information technology, and to 

purchase technology-based curricula. 

• $422 million for Safe and Drug-Free Schools and Communities State Grants, which fund a 

variety of activities to foster a safe and drug-free learning environment and support 

academic achievement. 

• $385 million for State Grants for Innovative Programs, the successor to Title VI and the most 

flexible of the Department’s State formula grant programs, to help States and school districts 

implement innovative strategies, including expanded school choice options, and other 

reforms to improve student achievement. Innovative Programs funds may be used by 

States, for example, to support charter schools or pay for urgent school renovations, as well 

as to augment funding available for supplemental educational services for students 

attending schools identified for improvement, corrective action, or restructuring under Title I. 

 

SPECIAL EDUCATION AND VOCATIONAL REHABILITATION 

President Bush has demonstrated a 

strong commitment to improving 

educational opportunities for children 

with disabilities, both by requesting 

significant annual increases for Special 

Education Grants to States and in his 

determination to apply the same 

rigorous accountability demanded by 

the NCLB Act to the upcoming 

reauthorization of the Individuals with 

Disabilities Education Act (IDEA). 

Drawing on the principles of the NCLB 

Special Education

Grants to States

9.5 8.5 7.5

6.3

5 4.3 3.8 3.1

2.3

1996 1997 1998 1999 2000 2001 2002 2003 2004

Note: 2003 and 2004 reflect President's request levels.

Billions of Dollars
-7- 

Act, as well as from the recommendations of his Commission on Excellence in Special 

Education, the President will work with Congress to make changes to IDEA designed to 

strengthen accountability and improve student outcomes, improve identification practices and 

promote early intervention, and reduce administrative and paperwork requirements. 

The President also is committed to the wide-ranging reform of the Federal government 's 

overlapping training and employment programs proposed in the 2003 budget request. This 

multi-year reform effort targets resources to programs with documented effectiveness, and 

eliminates funding for ineffective, duplicative, or overlapping programs. The 2004 request 

assumes enactment of the proposed consolidation of three secondary vocational rehabilitation 

programs in this account (Supported Employment State Grants, Projects with Industry, and the 

Migrant and Seasonal Farmworkers program) within the Vocational Rehabilitation State Grants 

program. 

The 2004 request for these activities includes the following: 

 

• $9.5 billion for Special Education Grants to States, an increase of $1 billion or nearly 

12 percent over the 2003 request, would provide an estimated $1,426 for each child with a 

disability. At the request level, the Federal contribution would equal about 19 percent of the 

national average per pupil expenditure for all children—the highest level of Federal support 

ever provided for children with disabilities. If enacted, the request would result in a 

$3.2 billion or 50 percent increase in Grants to States under President Bush. 

• $2.7 billion for Vocational Rehabilitation State Grants would help State VR agencies 

increase the participation of individuals with disabilities in the labor force. The request is the 

estimated amount needed to satisfy the statutory requirement to increase funding for the 

program by at least the percentage change in the CPIU for the 12-month period completed 

in October 2002, assuming enactment of the fiscal year 2003 President’s request. 

 

VOCATIONAL AND ADULT EDUCATION 

Decades of Federal investment in vocational and adult education programs have produced little 

in the way of measurable benefits either in improved vocational outcomes or significant 

improvement in reading and math skills that can lead to job placements. President Bush 

believes that the Nation can no longer afford, nor should tolerate the human costs of, 

educational investment that does not produce measurable results. For this reason, the 

Administration will be proposing fundamental changes to vocational and adult education 

programs during the upcoming reauthorization of both activities. For vocational education, this 

means a stronger emphasis on accountability and flexibility, while Federal resources for adult 

education will be targeted on educational approaches that have proven effective in increasing 

reading and math skills. The following requests will support the Administration’s strategy in this 

area: 

• $1 billion for a new Secondary and Technical Education State Grants program would create 

a coordinated high school and technical education improvement program in place of the 

current Vocational Education State Grants program. The new program would build on the 

NCLB Act by requiring States and LEAs to focus more intensively on improving student 

outcomes, such as academic achievement, and ensuring that students are being taught the 

necessary skills to make successful transitions from high school to college and college to 

the workforce. States would use formula allocations to make competitive grants to local 
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educational agencies and community and technical colleges and carry out State-level 

activities. In addition, States would have the flexibility to transfer program funds to support 

education-related activities under the ESEA Title I Grants to Local Educational Agencies 

program. 

• $584 million for Adult Basic and Literacy Education State Grants would support a stronger 

focus on building skills in basic reading, math, and English acquisition for adults who need 

to improve their literacy or who want to earn their high school diploma or its recognized 

equivalent (the GED). Proposed amendments to the Adult Education and Family Literacy 

Act would strengthen accountability, require State standards for adult literacy activities 

leading to high school-level proficiency, and train teachers in the use of research-validated 

instructional practices in reading, math and English fluency. 

POSTSECONDARY EDUCATION 

The Administration’s 2004 request would expand overall student aid available for postsecondary 

education to more than $62 billion, an increase of $3.1 billion, or 5 percent, over the President’s 

2003 request. The number of recipients of grant, loan, and work-study assistance would grow 

by 386,000 to 9.2 million students and parents, reflecting both increased aid levels and growth 

in postsecondary enrollment, which is expected to jump some 20 percent between 1998 and 

2010. The 2004 request includes the following proposals to help ensure equal access to quality 

postsecondary education opportunities for all Americans: 

• A $1.9 billion increase for the Pell Grant program, for an all-time high total of $12.7 billion, to 

retire a shortfall related to the 2002-2003 award year while maintaining a $4,000 maximum 

award for over 4.8 million students. 

• The request assumes that the significant surge in the Pell Grant applicant growth rate over 

the past few years will begin to level off in 2003-04 and return to levels consistently seen 

prior to 2001-02. However, if applicant growth rates remain at unusually high levels, 

projected Pell Grant program costs would significantly increase above the budget estimates.

• The request assumes Internal Revenue Service matching of student aid application income 

data with applicant tax data would reduce Pell Grant overawards and save an estimated 

$638 million in 2003 and 2004. These savings would significantly reduce existing funding 

shortfalls in the Pell Grant program. 

• Raising to $17,500, up from $5,000, the amount of student loans that may be forgiven for 

highly qualified math, science, and special education teachers serving low-income 

communities. Schools in these communities often are forced to hire uncertified teachers or 

assign teachers who are teaching “out-of-field.” This proposal would help these schools 

recruit and retain highly qualified math, science, and special education teachers. 

• $385 million for the Aid for Institutional Development (HEA Title III) programs, an increase of 

$11 million, demonstrates the Administration’s commitment to assisting institutions that 

enroll a large proportion of minority and disadvantaged students, including Historically Black 

Colleges and Universities and Historically Black Graduate Institutions, in order to continue 

efforts to close achievement and attainment gaps between minority students and other 

students. 
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• $94 million for Developing Hispanic-serving Institutions, an increase of $4.5 million, would 

expand and enhance support to postsecondary education institutions that serve large 

percentages of Hispanic students. This program is part of the Department efforts to 

increase academic achievement, high school graduation, postsecondary participation, and 

life-long learning among Hispanic Americans. 

• $102.5 million for the International Education and Foreign Language Studies (IEFLS) 

programs to help meet the Nation's security and economic needs through the development 

of expertise in foreign languages and area and international studies. The increased 

complexity of the post-Cold War world and the events surrounding the September 11 

terrorist attacks on the United States underscore the importance of maintaining and 

expanding American understanding of other peoples and their languages. 

• $802.5 million for the Federal TRIO Programs and $285 million for Gaining Early Awareness 

and Readiness for Undergraduate Programs (GEAR UP), which provide educational 

outreach and support services to help more than 2.2 million disadvantaged students to enter 

and complete college. 

DEPARTMENT MANAGEMENT 

The Department continues to implement its Blueprint for Management Excellence, a long-term 

action plan for improving Department management that incorporates key features of the 

President’s Management Agenda. The Blueprint sets priorities for management improvement 

designed to facilitate effective monitoring of Department programs, eliminate financial 

management deficiencies, and prevent fraud, waste, and abuse of taxpayer dollars. These 

priorities include (1) developing and maintaining financial integrity and tighter internal controls; 

(2) modernizing and reducing the high-risk status of the student financial assistance programs; 

(3) improving management of human capital; (4) managing information technology to meet 

customer needs; and (5) establishing an “accountability for results” culture within the 

Department. 

The 2004 budget for salaries and expenses would support the following management 

improvements: 

• Continued implementation of the Department’s One-ED project, which will apply a Strategic 

Investment Process to all Department functions to produce an integrated 5-year human 

capital, strategic-sourcing, and restructuring plan. One-ED is critical to Department efforts to 

fulfill the President’s Management Agenda by making the best possible use of available 

resources. 

• A new Performance-Based Data Management Initiative, launched in 2003, will focus 

elementary and secondary education program management and reporting on student 

achievement. The initiative will support internet-based collection of timely data on student 

achievement and educational outcomes, reduction of existing reporting burdens on States 

and school districts, and expansion of the use of educational results to identify performance 

trends and inform management, budget, and policy decisions. 
-10- 

• Ongoing modernization of student aid systems aimed at developing an integrated, userfriendly system that ensures financial integrity while allowing simplified access by students, 

schools, lenders, and guaranty agencies. Key activities in 2004 will include streamlining 

application, processing, origination, and disbursement processes to improve customer 

satisfaction and reduce costs; updating “web portals” used by the Department’s customers 

to access student aid information and conduct business; and improving the integration of 

Department technology-based systems. 

• A government-wide assessment, coordinated by the Department’s Inspector General, of the 

quality of audits conducted under the Single Audit Act. The assessment will determine 

whether the Department and other agencies can rely on single audits to support Federal 

program expenditures and identify erroneous payments. 
-11- 

II. THE 2004 EDUCATION BUDGET BY PROGRAM AREA 

A. ELEMENTARY AND SECONDARY EDUCATION 

Overview

The No Child Left Behind Act (NCLB), which reauthorized the Elementary and Secondary 

Education Act of 1965 (ESEA), closely followed the four pillars of education reform proposed by 

President Bush. 

First, the new law greatly strengthens accountability for results in Federal elementary and 

secondary education programs. States must set challenging standards in reading and 

mathematics and develop statewide annual adequate yearly progress (AYP) objectives that will 

result in all groups of students achieving proficiency within 12 years. These objectives must be 

met by all groups of students, disaggregated by poverty, race and ethnicity, disability, and 

limited English proficiency. States must conduct annual reading and math assessments for all 

students in grades 3-8, and States, school districts, and schools must report annually on their 

progress in helping all groups of students to reach proficiency. Biennial State participation in 

the State-level version of the National Assessment of Educational Progress will provide 

benchmarks for gauging the rigor of State standards and assessments. 

School districts and schools that do not make AYP will, over time, be subject to improvement, 

corrective action, and restructuring measures aimed at getting them back on course to meet 

State standards. To ensure that no student is trapped in a school identified for improvement, 

districts must provide such students with an option to transfer to a better public school or, if 

schools do not improve, to obtain supplemental educational services from a public- or privatesector provider. Schools that meet or exceed AYP objectives or close achievement gaps will be 

eligible for State Academic Achievement Awards. 

Second, NCLB provides unprecedented State and local flexibility and reduced red tape in the 

operation of Federal elementary and secondary education programs. For example, States and 

local school districts now may transfer up to 50 percent of the funding they receive under four 

major State formula grant programs to any one of the programs, or to Title I. In addition, new 

flexibility demonstration programs would permit up to 7 States and 150 school districts to enter 

into performance agreements allowing them to consolidate all funding from certain formula grant 

programs for any educational purpose authorized under the ESEA. The covered programs 

include Improving Teacher Quality State Grants, Educational Technology, Innovative Programs, 

and Safe and Drug-Free Schools and Communities. Participating States would even be 

permitted to consolidate their Title I, Part A administrative funding with other State level funds. 

Third, the reauthorized ESEA will better focus Federal education resources on proven 

educational methods. For example, the Title I Grants to LEAs program now requires 

instructional strategies, school improvement plans, professional development, and assistance to 

low-performing schools to be based on methods proven effective through scientifically based 

research. In addition, the new Reading First State Grants and Early Reading First program will 

help States and local communities use activities drawn from scientifically based reading 

research, such as professional development in evidence-based reading instruction, to help all 

children learn to read at grade level by the end of the third grade. 
-12- 

And fourth, the NCLB Act will expand choices for parents, particularly for parents of students in 

low-performing schools. Parents of students in Title I schools identified for improvement (not 

meeting State adequate yearly progress objectives for 2 consecutive years) now have the 

option to transfer their children to a better-performing public school, which may include a public 

charter school. If their school does not meet State standards for a third year, parents would be 

permitted to use Title I dollars to obtain supplemental educational services from the Stateapproved public- or private-sector provider of their choice (including faith-based organizations). 

NCLB also includes provisions to help expand the number of public charter schools available for 

parents seeking educational options for their children. 

The President’s 2004 budget for elementary and secondary education provides significant 

resources in support of these reform principles. Highlights include: 

• $12.4 billion for Title I Grants to Local Educational Agencies (LEAs), an increase of 

$1.0 billion, or 9 percent, to help States, school districts, and schools carry out the reforms 

called for by the NCLB Act. The increased funding would be allocated through the Targeted 

Grants formula to focus resources on those high-poverty districts and schools facing the 

greatest challenge in helping all students meet challenging State academic standards. 

• $2.85 billion for Improving Teacher Quality State Grants to give States and LEAs the 

resources and flexibility to select and implement research-based strategies that best meet 

their particular needs for developing a high-quality teaching force and improving student 

achievement. In return for this flexibility, LEAs are required to demonstrate annual progress 

in ensuring that all teachers teaching in core academic subjects within the State are highly 

qualified. 

• $1.05 billion for Reading First State Grants, an increase of $50 million, or 5 percent, for this 

nationwide effort to support comprehensive reading instruction, grounded in scientifically 

based reading research, for children in grades K-3. State grant awards finance professional 

development in reading instruction for teachers and administrators, the adoption and use of 

reading diagnostics to determine where K-3 students need help, and improved reading 

curricula grounded in scientifically based research. 

• $390 million for State Assessment Grants to help States develop and implement the 

expanded annual assessments in grades 3 through 8 that are integral to the strong State 

accountability systems required by the 2002 reauthorization of ESEA programs. 

• $420 million to expand choices for parents and students, including $220 million for Charter 

Schools Grants; $100 million for the Credit Enhancement for Charter School Facilities

program to assist charter schools in acquiring, leasing, and renovating school facilities; 

$75 million for a new Choice Incentive Fund to support efforts to provide parents, particularly 

low-income parents, with expanded opportunities for transferring their children to a higherperforming school; and $25 million for Voluntary Public School Choice grants to enable 

States and school districts to establish or expand public school choice programs across a 

State or across districts. 

• $385 million for the highly flexible State Grants for Innovative Programs to help States and 

school districts implement innovative strategies, including expanded school choice options, 

and other reforms for improving student achievement. For example, Innovative Programs 
-13- 

funds could be used by State and LEAs to pay for supplemental educational services in 

schools identified for improvement, corrective action, or restructuring under Title I. 

• $700.5 million for Educational Technology State Grants to support State and local efforts, 

particularly in high-poverty districts, to improve student achievement through the effective 

integration of technology into classroom instruction. Funds may be used, for example, to 

train teachers to use technology, to develop courses in information technology, and to 

purchase technology-based curricula. 

• $694.3 million for the Safe and Drug-Free Schools and Communities program, including 

$100 million for a new mentoring initiative, to fund a variety of activities that foster a safe 

and drug-free learning environment and support academic achievement. 

Title I Grants to Local Educational Agencies

 2003 2004 

 2002 Request Request

BA in millions................................................ $10,350.0 $11,350.0 $12,350.0 

Title I of the Elementary and Secondary Education Act (ESEA) authorizes supplemental 

programs to enable educationally disadvantaged children, particularly those attending schools in 

high-poverty areas, to meet the same challenging State academic standards as other children. 

For example, Title I supports more individualized instruction, fundamental changes in the school 

to improve teaching and learning, and preschool education. Children of migrant agricultural 

workers and students in State institutions for neglected and delinquent children and youth also 

receive Title I services. 

The 2004 request provides $12.4 billion, a $1 billion increase, for Title I Grants to Local 

Educational Agencies (LEAs). Grants to LEAs is the largest Title I program and will serve an 

estimated 16.6 million students in more than 47,000 schools in 2004. In accordance with the 

authorizing statute, the request would allocate all of the increased funds through the Targeted 

Grants formula, which focuses greater resources on the highest-poverty schools and students. 

If enacted, the request would result in a $3.6 billion increase, or 41 percent, in Title I Grants to 

LEAs funding since the passage of the No Child Left Behind Act of 2001 (NCLB Act). 

The NCLB Act reauthorized the ESEA to incorporate Title I reforms proposed by President 

Bush, particularly in the areas of assessment, accountability, and school improvement. The 

new law ensures that States will develop standards in reading and math, and assessments 

linked to those standards for all students in grades 3-8. LEAs and schools must use Title I 

funds for activities that scientifically based research suggests will be most effective in helping all 

students meet these State standards. 

States also must develop annual adequate yearly progress (AYP) objectives that will result in all 

groups of students achieving proficiency in reading and math within 12 years. These objectives 

must be met by all groups of students, disaggregated by poverty, race and ethnicity, disability, 

and limited English proficiency. Biennial State participation in the State-level version of the 

National Assessment of Educational Progress will provide benchmarks for gauging the rigor of 

State standards and assessments. 
-14- 

Under the NCLB Act, LEAs must permit students in Title I schools that do not meet annual State 

AYP objectives for two consecutive years to transfer to a better public school, with 

transportation provided by the school district. If schools continue not to meet AYP, students will 

be permitted to use Title I funds to obtain educational services from the public- or private-sector 

provider selected by their parents from a State-approved list. 

The new law also ensures that Title I schools identified for improvement (after not making AYP 

for two consecutive years) will develop improvement plans incorporating strategies from 

scientifically based research. Schools that do not improve would be subject to increasingly 

tough corrective actions—such as replacing school staff or significantly decreasing 

management authority at the school level—and could ultimately face restructuring, which 

involves a fundamental change in governance, such as a State takeover or placement under 

private management. To help States, districts, and schools carry out needed improvements, the 

NCLB Act significantly increases the statutory reservation of Part A allocations that States must 

use for school improvement. 

The new law authorizes State Academic Achievement Awards to schools that significantly close 

achievement gaps or exceed AYP standards for two or more consecutive years, as well as 

awards to teachers in such schools. However, States that fail to put in place systems of 

standards, assessments, and accountability may—and in some cases must—have a portion of 

their Federal administrative funds withheld by the Secretary. 

The 2004 budget includes a separate $9.5 million request for Title I Evaluation to support 

studies of State and local efforts to implement the NCLB Act, identify effective educational 

interventions and examine student outcomes in Title I schools, and provide technical assistance 

to States and school districts. 

State Assessment Grants

 2003 2004 

 2002 Request Request

BA in millions................................................ $387.0 $387.0 $390.0 

This program provides formula grants to States to pay the cost of developing both standards 

and assessments required by the NCLB Act and, if a State has put in place such standards and 

assessments, to pay for the administration of those assessments. Funds also may be used to 

develop standards and assessments in subjects other than those required by the NCLB Act and 

to improve the reliability and validity of assessment systems. Other allowable uses include 

paying the costs of working in voluntary partnership with other States to develop standards and 

assessments, professional development aligned with State standards and assessments, and 

support for data reporting and other components of the new State accountability systems. 

Under the NCLB Act, States will select and design their own assessments, so long as they are 

aligned with State academic achievement standards. The new assessments must be in place 

by the 2005-2006 school year. The 2004 request would provide $390 million for Grants for 

State Assessments, the same as the statutory 2004 “trigger amount.” Failure to provide the 

requested amount could result in delay of State efforts to develop and implement the new 

assessments in reading and mathematics for all students in grades 3 through 8—one of the 

Administration’s highest priorities and a linchpin of the stronger accountability for student 

achievement promised by the NCLB Act. 
-15- 

The request does not include additional funding for Grants for Enhanced Assessment 

Instruments. Competitions conducted in fiscal year 2002 and planned for 2003 will result in 

one-time awards that do not entail continuation costs. 

Reading First

(BA in millions) 

 2003 2004 

 2002 Request Request

Reading First State Grants........................... $900.0 $1,000.0 $1,050.0 

Early Reading First....................................... 75.0 75.0 100.0

 Total.................................................. 975.0 1,075.0 1,150.0 

President Bush made the implementation of the Reading First initiative one of his highest 

priorities for education because of compelling evidence that far too many young people are 

struggling through school without having mastered reading, the most essential and basic skill. 

On the 2000 National Assessment of Educational Progress, 60 percent of all fourth graders in 

high-poverty schools scored below the "basic" reading level. Research shows that students 

who fail to read well by fourth grade have a greater likelihood of dropping out and a lifetime of 

diminished success. For these reasons, providing consistent support for reading success from 

the earliest age has critically important benefits. These include helping improve reading gains, 

reducing the number of children who fall behind in reading, providing additional help to children 

who need it, and reducing the number of children referred to special education programs based 

on low reading scores. 

The request includes $1.15 billion for the two components of Reading First. The Reading First 

State Grants program is a comprehensive, nationwide effort to implement the findings of highquality scientifically based reading research on school reading instruction. This high-quality 

instruction will help the Nation’s schools reach the President’s goal of ensuring that every child 

can read at grade level or above by the end of third grade. In his original No Child Left Behind

education blueprint, the President committed to providing $5 billion for Reading First over a 5-

year period. The Administration’s fiscal year 2004 request will keep the Federal Government on 

track toward meeting that goal. 

Funds are used to help school districts and schools provide professional development in 

reading instruction for teachers and administrators, adopt and use reading diagnostic 

assessments for students in kindergarten through third grade to determine where they need 

help, implement reading curricula that are based on recent research, and provide reading 

interventions for young grade-school children to ensure they can read at grade level by the end 

of the third grade. 

Early Reading First complements Reading First State Grants by providing competitive grants to 

school districts and non-profit organizations to support activities in existing pre-school programs 

designed to enhance the verbal skills, phonological awareness, letter knowledge, and prereading skills of children from birth through age 5. Funds will be targeted to communities with 

high numbers of low-income families. 
-16- 

Even Start

 2003 2004 

 2002 Request Request

BA in millions................................................ $250.0 $200.0 $175.0 

Even Start aims to improve educational opportunities of children and their parents in low-income 

areas by integrating early childhood education, adult education, and parenting education into 

“family literacy” programs. The request includes $175 million to continue local projects funded 

in prior fiscal years and for national technical assistance and evaluation activities. 

Even Start’s performance on evaluations supports the decrease in the request level. The 

Department has completed two four-year national evaluations of the Even Start program. 

These evaluations concluded that, although children and adults participating in Even Start 

generally made gains in literacy skills, the gains were not significantly greater than those of nonparticipants. Interim findings from the third national evaluation confirm the conclusions from the 

earlier evaluations. 

Literacy Through School Libraries

 2003 2004 

 2002 Request Request

BA in millions................................................ $12.5 $12.5 $27.5 

This program helps LEAs improve student literacy skills by providing students with increased 

access to up-to-date school library materials and professionally certified school library media 

specialists. The request would expand the number of grants from 75 to 165, in recognition that 

school libraries can play a strategic role in making information available to all students, training 

students and teachers about how to obtain and make use of information, and increasing access 

for low-income students to technology and information. The request also supports the goal of 

helping all children to read well. 

Reading Is Fundamental/Inexpensive Book Distribution

 2003 2004 

 2002 Request Request

BA in millions................................................ $24.0 $24.0 $24.0 

This program is administered through a contract with Reading is Fundamental, Inc. (RIF), a 

nonprofit organization affiliated with the Smithsonian Institution. RIF allocates funds to local 

community associations that select and distribute inexpensive books to children free-of-charge. 

RIF currently reaches about 4.8 million children through 23,000 projects. 
-17- 

Ready-to-Learn Television

 2003 2004 

 2002 Request Request

BA in millions................................................ $22.0 $22.0 $22.0 

The program supports the development and distribution of educational video and related 

materials for preschool children, elementary school children, and their parents in order to 

facilitate student academic achievement. Funding has supported the development of 2 highly 

acclaimed children’s shows, Between the Lions and Dragon Tales, along with a bilingual 

newsletter that provides suggestions for books and learning activities related to PBS children’s 

programs. Activities supported through Ready-to-Learn play an important role in helping to 

ensure that young children are prepared to start school. 

Improving Teacher Quality State Grants

 2003 2004 

 2002 Request Request

BA in millions................................................ $2,850.0 $2,850.0 $2,850.0 

This program gives States and school districts a flexible source of funding with which to meet 

their particular needs in strengthening the skills and knowledge of teachers and administrators, 

so that they can improve student achievement in the core academic subjects. In return for this 

flexibility, States will be held accountable for ensuring that all children are taught by effective 

teachers and for improving student achievement. 

In addition to using funds for professional development and class size reduction, school districts 

may use funds to recruit and retain teachers and principals, merit pay, mentoring, and other 

activities. States may support other activities to improve teacher quality, including changes to 

teacher certification or licensure requirements, alternative certification, tenure reform, meritbased teacher performance systems, and differential and bonus pay for teachers in high-need 

subject areas. 

Early Childhood Educator Professional Development Grants 

 2003 2004 

 2002 Request Request

BA in millions................................................ $15.0 $15.0 $15.0 

These grants support training for preschool and other early childhood educators to help ensure 

that young children enter school ready to learn to read. The program focuses on professional 

development, especially in the area of teaching pre-reading skills to young children, for early 

childhood educators and caregivers working in high-poverty communities. 
-18- 

Mathematics and Science Partnerships

 2003 2004 

 2002 Request Request

BA in millions................................................ $12.5 $12.5 $12.5 

This program is designed to improve academic achievement in mathematics and science by 

promoting strong teaching skills for elementary and secondary school teachers. Grants to 

partnerships of State educational agencies, higher education institutions, and school districts 

support activities to develop rigorous mathematics and science curricula, distance learning 

programs, and incentives to recruit college graduates with degrees in math and science into the 

teaching profession. For 2004, grants will focus on intensive summer institutes for teachers at 

the elementary and middle-school levels. 

Troops-to-Teachers

 2003 2004 

 2002 Request Request

BA in millions................................................ $18.0 $20.0 $25.0 

Funds are used to support the Department of Defense Troops-to-Teachers program that 

provides the preparation and support needed to encourage retiring military personnel to teach in 

high-poverty school districts. A 2001 survey by the General Accounting Office indicated that, 

since the program was established in 1994, almost 4,000 former military personnel had been 

hired as teachers nationwide. Teachers recruited through Troops-to-Teachers are twice as 

likely as traditional public school teachers to teach in such high-need subject areas as 

mathematics, science, and special education. 

Transition to Teaching

 2003 2004 

 2002 Request Request

BA in millions................................................ $35.0 $39.4 $49.4 

This program addresses the national challenge of training and recruiting more than 2 million 

teachers over the next 10 years—due to the retirements of long-time teachers, high attrition 

rates among new teachers, and booming enrollments—by supporting alternatives to traditional 

teacher certification routes and other approaches for recruiting, training, and placing mid-career 

professional and recent colleges graduates. With the increase, the program will be able to fund 

about 134 grants, including 25-30 new projects. 

Teaching of Traditional American History

 2003 2004 

 2002 Request Request

BA in millions................................................ $100.0 $50.0 $100.0 
-19- 

This program makes competitive grants to school districts to promote the teaching of traditional 

American history in elementary and secondary schools as a separate academic subject. The 

increase, which would double the number of grants to 360, recognizes the need to create and 

expand efforts to raise the level of student knowledge in this core academic area in order to 

prepare future generations of students become responsible citizens who vote and who fully 

participate in our democratic traditions. 

Educational Technology State Grants

 2003 2004 

 2002 Request Request

BA in millions................................................ $700.5 $700.5 $700.5 

While upgraded infrastructure now permits most teachers to access technology in their 

classrooms, few teachers have the knowledge, skills, and curricula needed to use technology 

effectively to improve student achievement. The 2004 request for this program supports State, 

district, and school efforts to integrate technology into the classroom. States receive formula 

grants, then allocate half of the funds to districts by formula and the remainder competitively to 

high-need districts, or consortia that include such a district, in partnership with an entity having 

expertise in integrating technology into the curriculum. Districts use their funds for such 

activities as training teachers to integrate technology into the curriculum and serve as 

technology experts in their schools, developing and implementing high-quality information 

technology courses, and purchasing effective technology-based curricula. 

21st Century Community Learning Centers

 2003 2004 

 2002 Request Request

BA in millions................................................ $1,000.0 $1,000.0 $600.0 

This program helps communities establish or expand community learning centers that provide 

extended learning opportunities for students and related services to their families. The 

decrease in the request acknowledges that the program needs some time to address 

disappointing initial findings from a rigorous evaluation of the 21st Century Community Learning 

Centers program. The evaluation indicates that the centers funded in the program’s first three 

years are not providing substantial academic content and do not appear to have a positive 

impact on student behavior. 

 

The entire request will be available for formula grants to States, since the continuation costs for 

projects initiated under the antecedent competitive grant program conclude in 2003. From their 

formula grants, States make competitive awards of at least $50,000 each to school districts, 

community-based organizations, faith-based organizations, and other public or private entities 

for projects that would serve primarily students who attend schools eligible to operate a Title I 

schoolwide program. States give priority to projects serving students who attend schools 

identified for improvement or corrective action under Title I, and projects emphasize activities 

that prepare students to meet State and local student performance standards in core academic 

subjects. The request would enable districts to provide after-school learning opportunities—

particularly for children who attend high-poverty or low-performing schools—to more than 

800,000 students. 
-20- 

State Grants for Innovative Programs

 2003 2004 

 2002 Request Request

BA in millions................................................ $385.0 $385.0 $385.0 

This program provides flexible funding to State and local educational agencies for promising, 

evidence-based education reforms that meet the educational needs of all students. School 

districts may use funds to reduce class size, provide professional development, pay for Title I 

supplemental services, support smaller learning communities, and other activities. 

Charter School Grants

 2003 2004 

 2002 Request Request

BA in millions................................................ $200.0 $200.0 $220.0 

This program increases public school choice options by supporting the planning, development, 

and initial implementation of public charter schools. A total of 38 States and the District of 

Columbia have charter school laws that exempt such schools from most education rules and 

regulations in exchange for greater accountability for improving student performance. The 

number of charter schools nationwide has grown from 250 to more than 2,700 in the past few 

years. 

Of the total request, $200 million would support about 1,820 new and existing charter schools 

and enhanced dissemination activities at schools with a demonstrated history of success. The 

$20 million increase would initiate a new Per-Pupil Facilities Aid program, which will provide 

funds to States to assist charter schools in obtaining facilities. Federal funds will match funds 

for State programs that make payments, on a per-pupil basis, to fund charter schools facilities. 

Credit Enhancement for Charter School Facilities

 2003 2004 

 2002 Request Request

BA in millions................................................ — $100.0 $100.0 

Expanding the number of charter schools is a key Administration strategy for increasing the 

options available to parents seeking the best educational opportunities for their children. A 

major obstacle to the creation of charter schools in many communities is the limited ability to 

obtain suitable academic facilities. The new Credit Enhancement for Charter School Facilities 

program would help overcome this problem by providing $100 million in grants to public and 

nonprofit entities to leverage funds to help charter schools purchase, construct, renovate, or 

lease academic facilities. 
-21- 

Choice Incentive Fund

 2003 2004 

 2002 Request Request

BA in millions................................................ — $50.0 $75.0 

The Administration is requesting additional funding for this proposed initiative to provide the 

parents of students who attend low-performing schools with expanded opportunities for 

transferring their children to a higher-performing public, charter, or private school. The 

Department would make competitive awards to States, local educational agencies, and 

community-based nonprofit organizations with a proven record of securing educational 

opportunities for children. In making awards, priority would be given to applicants that, among 

other things, would provide large numbers of students with expanded choice opportunities. In 

addition, the Department would reserve a portion of program funds for school choice programs 

in the District of Columbia. 

A growing body of evidence shows that providing parents and students with expanded choice 

options can improve the academic performance of the students exercising choice and the 

performance of schools at risk of losing students. For example, the September 2002 General 

Accounting Office report, School Vouchers: Characteristics of Privately Funded Programs, 

found that rigorous evaluations of private school choice programs in New York City, 

Washington, D.C., and Dayton, Ohio “provide some evidence that African American students 

who used vouchers to attend private schools showed greater improvements in math and 

reading than students in the comparison group.” Additional studies have found that regular 

public schools increased their productivity when exposed to competition, even when the 

competitive threats were relatively small. 

Voluntary Public School Choice

 2003 2004 

 2002 Request Request

BA in millions................................................ $25.0 $25.0 $25.0 

This program supports efforts to establish intradistrict and interdistrict public school choice 

programs to provide parents, particularly parents whose children attend low-performing public 

schools, with greater choice for their children’s education. Grant funds support planning and 

implementation costs associated with new programs, tuition transfer payments to public schools 

that students choose to attend, and efforts to expand the capacity of schools to meet the 

demand for choice. 

Magnet Schools Assistance

 2003 2004 

 2002 Request Request

BA in millions................................................ $110.0 $110.0 $110.0 
-22- 

The request would support approximately 50 new awards and 2 continuation grants to local 

educational agencies to operate magnet schools that are part of a court-ordered or federally 

approved desegregation plan to eliminate, reduce, or prevent minority group isolation in 

elementary and secondary schools. Magnet schools address their desegregation goals by 

providing a distinctive educational program that attracts a diverse student population. 

Safe and Drug-Free Schools and Communities

 2003 2004 

 2002 Request Request

State Grants ................................................. $472.0 $472.0 $422.0 

National Programs........................................ 274.7 172.2 272.2

Total.................................................. 746.8 644.3 694.3 

Teaching and learning to the high standards demanded by the NCLB Act requires that our 

schools are safe and our students are drug-free. For 2004, the request includes $694.3 million 

for the Safe and Drug-Free Schools and Communities (SDFSC) program, including $422 million 

for State Grants and $272 million for National Programs. The $50 million decrease proposed for 

SDFSC State Grants recognizes weaknesses in the SDFSC State Grant program that need to 

be addressed, such as the lack of specific, measurable objectives for the program and the 

means to determine whether they are being achieved. In the coming year, the Department will 

develop a new strategy for measuring the performance of SDFSC State Grants that will help 

assess the effects of the overall program and make better use of performance data to improve 

State and local programming decisions. 

For SDFSC National Programs the request proposes a $100 million increase to fund the 

Administration’s new mentoring initiative in conjunction with the USA Freedom Corps. This 

initiative would support the development, expansion, and strengthening of exemplary schoolbased mentoring programs that meet the needs of at-risk middle school students, while using 

citizen service to further engage Americans in public education. Funds requested under 

SDFSC National Programs also would support a variety of Federal Activities to improve school 

safety and security and to prevent the illegal use of drugs by students; provide continued 

resources for Project SERV (School Emergency Response to Violence) to ensure that funds are 

available for the Department to provide crisis response services to local educational agencies if 

called upon to do so; and fully fund the final year of continuation costs for drug prevention and 

school safety coordinators under the National Coordinator program, which, by the end of 2004, 

will have completed its mission as a demonstration activity. 

Character Education

 2003 2004 

 2002 Request Request

BA in millions................................................ $25.0 $25.0 $25.0 

This program makes competitive awards to States and school districts for such activities as 

developing character education curricula, implementing model character education programs 

that involve parents and community members, including private and nonprofit organizations, and 

training teachers to incorporate character-building lessons and activities into the classroom. 
-23- 

Programs must be integrated into classroom instruction, consistent with State academic content 

standards, and coordinated with other State education reforms. Elements of character include 

such items as caring, civic virtue and citizenship, justice, respect, responsibility, trustworthiness, 

and giving. 

Civic Education Programs

(BA in millions) 

 2003 2004 

 2002 Request Request

We the People.............................................. $15.5 — $15.5 

Cooperative Education Exchange................ 11.5 — 11.5

Total.................................................. 27.0 — 27.0 

These programs support activities to help students to understand, care about, and act on core 

ethical and citizenship values, while also helping to create safe and inclusive learning 

environments that foster student academic achievement along with increased social 

responsibility and tolerance for others. 

We the People awards a noncompetitive grant to the nonprofit Center for Civic Education in 

Calabasas, California. The program promotes civic competence and responsibility through 

teacher training and curriculum materials for upper elementary, middle, and high school 

students. 

 

Cooperative Education Exchange supports education exchange activities in civics and 

economics between the United States and eligible countries in Central and Eastern Europe, any 

country that was formerly a republic of the Soviet Union, the Republic of Ireland, the province of 

Northern Ireland in the United Kingdom, and any democratic developing country. Award 

recipients provide educators from eligible countries with exemplary curriculum and teacher 

training programs in civics and economic education. 

Physical Education Initiative

 2003 2004 

 2002 Request Request

BA in millions................................................ — — $10.0 

This new initiative, funded under the authority of the Fund for the Improvement of Education, 

would help build capacity nationally for long-term improvements in physical education. Grants 

to school districts would support the demonstration of high-quality, research-based approaches 

for incorporating regular physical activity into students’ everyday lives and promoting lifelong 

personal fitness activities and healthy habits tied to State standards in physical education. 

Each grant would include a rigorous evaluation component designed to assess outcomes, 

including student success in increasing knowledge of, and forming positive attitudes about, 

physical fitness, as well as attaining increased levels of fitness. Results of this demonstration 

activity would be widely disseminated to State and local educational agencies and communitybased organizations that work with youth. 
-24- 

Fund for the Improvement of Education

 2003 2004 

 2002 Request Request

BA in millions................................................ $384.0 $35.0 $35.0 

The Fund for the Improvement of Education (FIE) provides authority for the Secretary to support 

nationally significant programs to improve the quality of elementary and secondary education at 

the State and local levels and help all students meet challenging State academic content 

standards and student achievement standards. The request would support national recognition 

activities, dissemination efforts such as ED Pubs, and a small number of nationally significant 

programs that show promise for improving American education, including projects such as the

Reach Out and Read program. The 2002 total included $269.9 million for one-time projects and 

$75 million for Comprehensive School Reform. 

Advanced Placement

 2003 2004 

 2002 Request Request

BA in millions................................................ $22.0 $22.0 $22.0 

 

The request level-funds Advanced Placement (AP) programs, which the NCLB Act transferred 

from the Higher Education Act to Title I of the ESEA. The program makes grants to State 

educational agencies to pay test fees for low-income students taking approximately 100,000 AP 

tests. The program also supports State and local efforts to make pre-advanced placement and 

advanced placement courses more widely available to low-income students. These courses 

proved greater opportunity to low-income students to achieve to high standards in English, 

mathematics, science, and other core subjects. Participation in middle-school pre-advanced 

placement classes prepares students for advanced placement classes at the high school level. 

English Language Acquisition

(BA in millions) 

 2003 2004 

 2002 Request Request

Language Acquisition State grants................. $411.6 $466.4 $538.1 

National Activities........................................... 43.8 43.2 43.2 

Competitive Grant Continuations ................... 209.6 155.4 83.7

 Total.................................................... 665.0 665.0 665.0 

Title III of the Elementary and Secondary Education Act (ESEA) authorizes formula grants to 

States based on each State’s share of the Nation’s limited English proficient (LEP) and recent 

immigrant student population. Grants enable States to design and implement a statewide 

response to the needs of their LEP students. The statute also provides a .5 percent set-aside 

for the Outlying Areas and a $5 million set-aside for elementary, secondary, and postsecondary 

schools operated predominantly for Native American children. 
-25- 

States must use at least 95 percent of formula funds for subgrants to school districts, based 

primarily on each district’s share of the State’s LEP students. In addition, States must use up to 

15 percent of the 95 percent to increase the size of grants to districts that have experienced a 

significant increase in the percentage or number of recent immigrant students over the 

preceding two years. 

States must develop annual measurable achievement objectives for LEP students that measure 

their success in achieving English language proficiency and meeting challenging State 

academic content and achievement standards. If a school district does not make progress 

toward meeting these objectives for 2 consecutive years, the State must require the district to 

develop and implement an improvement plan. If the district fails to meet the State’s annual 

achievement objectives after 4 consecutive years, the State must require the district to take 

corrective action to include approaches more likely to bring about meaningful change in a 

school. These approaches may include comprehensive implementation of a new curriculum 

and method of instruction or replacing educational personnel responsible for the LEA’s failure to 

meet the objectives. The State may also terminate assistance to the district. 

Title III requires the Department to set aside 6.5 percent of the appropriation for National 

Activities, including the National Professional Development Project, a National Clearinghouse 

for English Language Acquisition and Language Instructional Programs, and evaluation. Under 

the National Professional Development Project, the Department makes 5-year competitive 

grants to institutions of higher education that have entered into consortium arrangements with 

State or local educational agencies. The purpose of these grants is to increase the pool of 

teachers prepared to serve limited English proficient students and increase the skills of teachers 

already serving them. The purpose of the National Clearinghouse contract is to collect, analyze, 

synthesize, and disseminate information about instructional programs for LEP students. 

Under the reauthorized statute, the Department must fund continuation grants to certain projects 

that were originally funded under the antecedent statute. Instructional services grantees funded 

under Subpart 1 of Title VII as it existed prior to enactment of the No Child Left Behind Act and 

professional development grantees under subpart 3 receive continuation awards consistent with 

their original grant terms. In 2004, funds for continuations would decline by more than 

$71 million as compared to 2003. 

Title I State Agency Programs

(BA in millions) 

 2003 2004 

 2002 Request Request

Migrant Education ........................................ $396.0 $396.0 $396.0 

Neglected and Delinquent............................ 48.0 48.0 48.0

 Total ................................................... 444.0 444.0 444.0 

 

The budget provides $396 million for Migrant Education to help nearly 750,000 children of 

migrant agricultural workers meet State academic standards. Migrant grants help States 

identify migrant children, pay the higher costs often associated with serving those children, and 

employ methods such as distance-learning to reach migrant farmworker communities. The 

request also includes $48 million for the Title I Neglected and Delinquent Neglected and 
-26- 

Delinquent (N&D) program to provide educational services to children and youth in Stateoperated institutions. 

High School Equivalency Program and College Assistance Migrant Program

(BA in millions) 

 2003 2004 

 2002 Request Request

High School Equivalency Program............... $23.0 $23.0 $13.0 

College Assistance Migrant Program........... 15.0 15.0 15.0

 Total............................................ 38.0 38.0 28.0 

The High School Equivalency Program (HEP) funds projects to help low-income migrant and 

seasonal farm workers gain high school diplomas or equivalency certificates. The College 

Assistance Migrant Program (CAMP) provides stipends and special services such as tutoring 

and counseling to migrant students who are in their first year of college. The 2004 request 

provides sufficient funding for approximately 67 HEP and CAMP continuation grants. In 

addition, about 10 new CAMP projects will be initiated with funds released by projects that 

conclude in 2003. The low quality of HEP applications over the past few years supports the 

request to continue existing HEP projects only. 

Education for Homeless Children and Youth

 2003 2004 

 2002 Request Request

BA in millions................................................ $50.0 $50.0 $50.0 

This program provides formula grants to States to facilitate the enrollment of homeless students 

in school and give them access to services available to other children. States subgrant most 

funds to local educational agencies for tutoring, transportation, and other services that help 

homeless children to enroll in, attend, and succeed in school. Besides academic instruction, 

services include preschool programs, special education, and gifted and talented programs. 

Since this program began in 1988, nearly all States have revised their laws, regulations, and 

policies to improve educational access for homeless students. States have typically eased 

residency requirements and improved transportation and immunization policies to ensure 

greater access for homeless students. Nevertheless, homeless children and youth continue to 

be at significant risk of educational failure and the $50 million request would maintain support 

for State and local activities designed to reduce that risk. 
-27- 

Indian Education

(BA in millions) 

 2003 2004 

 2002 Request Request

Grants to LEAs............................................. $97.1 $97.1 $97.1 

Special Programs for Indian Children........... 20.0 20.0 20.0 

National Activities......................................... 3.2 5.2 5.2

Total.................................................. 120.3 122.3 122.3 

Indian Education programs supplement the efforts of State and local educational agencies, and 

Indian tribes, to improve educational opportunities for Indian children. The programs link these 

efforts to broader educational reforms underway in States and localities to ensure that Indian 

students benefit from those reforms and achieve to the same challenging academic standards 

as other students. 

Grants to Local Educational Agencies provide funds to public and BIA-supported schools for 

activities to improve the educational achievement of Indian students. Special Programs for 

Indian Children includes $9 million to continue the American Indian Teacher Corps, which will 

support training for 1,000 Indian teachers over a five-year period to take positions in schools 

that serve concentrations of Indian children. Also, the program includes $11 million for 

demonstration grants to improve educational opportunities for Indian children in areas such as 

early childhood education, dropout prevention, and school-to-work programs. 

Finally, the request provides $5.2 million to implement a comprehensive research agenda that 

responds to the national need for better research, evaluation, and data collection on the 

educational status of Indians. This agenda focuses on filling gaps in national information on the 

educational status and needs of Indians, and on identifying educational practices that are 

effective with Indian students. 

Education for Native Hawaiians

(BA in millions) 

 2003 2004 

 2002 Request Request

Family-Based Education Centers................. $12.1 $5.7 $3.7 

Curriculum Development, Teacher 

Training, and Recruitment ...................... 7.1 2.4 1.0 

Gifted and Talented...................................... 1.1 — — 

Higher Education.......................................... 3.5 3.5 3.5

Special Education......................................... 3.1 3.1 3.1 

Community-Based Centers .......................... 2.1 0.4 0.4 

College Preparation...................................... 1.0 1.2 1.2 

Native Hawaiian Education Councils............ 0.5 0.5 0.5 

Other Activities ............................................. — 1.5 4.9 

 Total.................................................. 30.5 18.3 18.3 
-28- 

The Education for Native Hawaiians program provides supplemental education services and 

activities for Native Hawaiians. The request includes sufficient funding to continue program 

grants and services to the Hawaiian Natives, many of whom perform below national norms on 

achievement tests of basic skills in reading, science, math, and social science. Other 

Department elementary and secondary education programs, particularly the State formula grant 

programs, also support improved achievement for Native Hawaiians. 

Alaska Native Education Equity

(BA in millions) 

 2003 2004 

 2002 Request Request

Mandated awards......................................... $7.0 $7.0 $7.0 

New Activities............................................... 8.3 — — 

Continuation awards..................................... 8.7 7.2 7.2

Total.................................................. 24.0 14.2 14.2 

The Alaska Native Education Equity program provides educational services to meet the special 

needs of Native Alaskan children. Program grants focus on meeting the special needs of 

Alaska Native students in order to enhance their academic performance. Other Department 

elementary and secondary education programs, particularly the State formula grant programs, 

also support improved achievement for Alaska Native students. 

Training and Advisory Services (Title IV of the Civil Rights Act)

 2003 2004 

 2002 Request Request

BA in millions................................................ $7.3 $7.3 $7.3 

This program supports 10 regional Equity Assistance Centers that provide services to school 

districts on issues related to discrimination based on race, gender, and national origin. Typical 

activities include disseminating information on successful practices and legal requirements 

related to nondiscrimination, providing training to educators to develop their skills in specific 

areas, such as identification of bias in instructional materials, and technical assistance on 

selection of instructional materials. 
-29- 

Impact Aid

(BA in millions) 

 2003 2004 

 2002 Request Request

Payments for Federally Connected Children: 

 Basic Support Payments........................... $982.5 $982.5 $867.5 

 Payments for Children with 

 Disabilities .............................................. 50.0 50.0 40.0 

Facilities Maintenance.................................. 8.0 8.0 8.0 

Construction ................................................. 48.0 45.0 45.0 

Payments for Federal Property .................... 55.0 55.0 55.0

Total.................................................. 1,143.5 1,140.5 1,015.5 

The Impact Aid program provides financial support to school districts affected by Federal 

activities. The property on which certain children live is exempt from local property taxes, 

denying districts access to the primary source of revenue used by most communities to finance 

education. Impact Aid helps to replace the lost local revenue that would otherwise be available 

to districts to pay for the education of these children. 

The 2004 budget request would place priority on children for whom the Federal government has 

primary responsibility, namely children living on Indian lands and children who live on Federal 

property and who have a parent on active duty in the uniformed services. For Basic Support 

Payments, the request of $867.5 million would provide payments on behalf of those categories 

of children. The average per-child payments for these categories of children (the so-called “a” 

children) would increase 3.5 percent. No payments would be made for the so-called “b” children 

(who live on or have a parent working on Federal property, but not both). 

Payments for Children with Disabilities provides additional support for certain federally 

connected children who are eligible for services under the Individuals with Disabilities Education 

Act. The $40 million request is $10 million less than the 2002 amount but would increase the 

average per-child payment by 2.4 percent because the Department would make payments only 

on behalf of children living on Indian lands and those who both live on Federal property and 

have a parent on active military duty. 

 

The Department of Education owns and maintains 41 school facilities that serve large numbers 

of military dependents. The $8 million requested for Facilities Maintenance will fund essential 

repair and maintenance of these facilities and allow the Department to continue to transfer these 

schools to local school districts. 

School districts also generally pay for most of their school construction costs using their own 

resources and rely on property taxes to finance these costs. The $45 million proposed for 

Construction would provide both formula and competitive grants to school districts. Formula 

grants assist districts with large proportions of military dependent students and students residing 

on Indian lands. Competitive grants focus on helping LEAs make emergency renovations and 

modernization changes. 

 

The $55 million request for Payments for Federal Property would provide payments to districts 

that generally have lost 10 percent or more of their taxable property to the Federal Government. 
-30- 

B. SPECIAL EDUCATION AND REHABILITATIVE SERVICES 

Overview 

The Administration is committed to working to ensure that all Americans have the opportunity to 

learn and develop skills, engage in productive work, choose where to live, and participate in 

community life. The 2004 budget supports the President’s New Freedom Initiative to help 

people with disabilities lead independent lives. Funds are requested for programs that can 

improve educational, employment, and independent living outcomes for people with disabilities. 

The $10.7 billion request for Special Education programs includes support for programs to 

improve educational and early intervention outcomes for children with disabilities. For the 

Grants to States program, the President is requesting his third consecutive $1 billion increase, 

for a total of $9.5 billion. This level of funding would provide an estimated average of $1,426 

per student for almost 6.6 million children ages 3 through 21. This is the highest level of 

Federal support ever provided for children with disabilities. The budget also includes an 

increase of $10 million for the Grants for Infants and Families program, from $437 million to 

$447 million, to improve services for children from birth through age 2. Funding for the 

Preschool Grants program, which supplements Grants to States funding for children ages 3 

through 5, would be maintained at the $390 million level requested for 2003. 

The $324.6 million request for National Activities would support a variety of research, 

demonstration, technical assistance, dissemination, training, and other activities that assist 

States, local educational agencies, parents, and others in improving results for children with 

disabilities. The budget proposes level funding for each of these activities, with the exception 

of the State Improvement program, which would be reduced from $51.7 million to $44 million. 

For Rehabilitation Services and Disability Research, the budget provides $3.0 billion to support 

comprehensive and coordinated programs of vocational rehabilitation and independent living for 

individuals with disabilities through research, training, demonstration, technical assistance, 

evaluation, and direct service programs. The request includes $2.7 billion for Vocational 

Rehabilitation State Grants to help 243,000 individuals with disabilities obtain, retain, or 

maintain employment. The 2004 request assumes enactment of the 2003 proposal to 

consolidate overlapping employment and training programs in this account within the Vocational 

Rehabilitation State Grants program, and would maintain funding for most other discretionary 

programs at the 2003 request level. One exception is a $7 million increase for the 

Demonstration and Training program to support Transition Mentoring Grants, which would use 

peer mentors with disabilities who have succeeded educationally or professionally to improve 

transition services to students with disabilities served by the VR State Grant program. 

The request would not provide additional funding for programs authorized under the Assistive 

Technology (AT) Act. Funding for the Title I AT State grant program and its accompanying 

technical assistance program would be eliminated, $2.7 million for Title I protection and 

advocacy activities would be shifted to the Protection and Advocacy for Individual Rights 

program, and additional requests for the Title III Alternative Financing program and its technical 

assistance program would be postponed until current multi-year funds are spent and future 

funding needs are determined. 
-31- 

Special Education State Grants 

Grants to States

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $7,528.5 $8,528.5 $9,528.5 

Children ages 3 through 21 

Number served (thousands)......................... 6,483 6,580 6,672 

The Grants to States program makes formula grants that help States pay the excess costs of 

providing special education and related services to children with disabilities aged 3 through 

21 years. The request would provide an average of $1,426 for nearly 6.6 million children with 

disabilities. At this level of funding, the Federal contribution would equal about 19 percent of the 

national average per pupil expenditure for all children. The budget also would provide 

$16 million for studies to assess progress in implementing the Individuals with Disabilities 

Education Act. 

Preschool Grants

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $390.0 $390.0 $390.0 

This program provides formula grants to help States make a free appropriate public education 

available to all children with disabilities ages 3 through 5. The Preschool Grants program 

supplements funds provided under the Grants to States program and helps to ensure that young 

children with disabilities are ready to learn when they enter school. The request would provide 

approximately $602 per child for approximately 648,200 children. 

Grants for Infants and Families

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $417.0 $437.0 $447.0 

This program makes formula grants to help States implement statewide systems of early 

intervention services for all eligible children with disabilities from birth through age 2 and their 

families. The proposed $10 million increase would assist States in meeting the rising costs of 

administering their systems and serving larger numbers of infants and toddlers with disabilities. 

These systems help States and local agencies identify and serve children with disabilities early 

in life when interventions can be most effective in improving educational outcomes. The budget 

provides support to 57 State agencies serving approximately 272,800 infants and toddlers with 

disabilities and their families. 
-32- 

Special Education National Activities 

Special Education National Activities programs support State efforts to improve early 

intervention services and educational results for children with disabilities. The total request for 

National Activities is $324.6 million. 

State Improvement

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $51.7 $51.7 $44.0 

This program provides competitive grants to help State educational agencies reform and 

improve their systems for providing educational, early intervention, and transitional services to 

improve results for children with disabilities. This includes State systems for professional 

development, technical assistance, and dissemination. 

At least 75 percent of the funds provided to each State are reserved for professional 

development. The remaining funds are used to carry out State strategies for improving 

educational results, including efforts to hold school districts and schools accountable for the 

educational progress of children with disabilities, providing high-quality technical assistance to 

school districts and schools, and changing State policies and procedures to address systemic 

barriers to improving results for students with disabilities. The $44 million request would support 

approximately 42 continuation awards. 

Research and Innovation

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $78.4 $78.4 $78.4 

Research and Innovation activities develop new knowledge through research, apply knowledge 

to create useful practices through demonstrations, and make knowledge available through 

outreach and other dissemination activities. The request includes about $17.3 million for new 

projects and $60.2 million for continuations. 

Technical Assistance and Dissemination

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $53.5 $53.5 $53.5 

This program provides technical assistance and disseminates materials based on knowledge 

gained through research and practice. The request includes continued support for a $7.0 million 

initiative to provide grants to help States address their technical assistance needs. About 

$7.7 million would be available for new projects and $45.8 million for continuation awards. 
-33- 

Personnel Preparation

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $90.0 $90.0 $90.0 

This program helps ensure that there are adequate numbers of personnel with the skills and 

knowledge necessary to help children with disabilities succeed educationally. Program activities 

focus on both meeting the demand for personnel to serve children with disabilities and 

improving the quality of these personnel, with particular emphasis on incorporating knowledge 

gained from research and practice into training programs. Funds are used to prepare personnel 

to serve children with low- and high-incidence disabilities, train leadership personnel, and 

support projects of national significance, such as developing models for teacher preparation. 

The request would provide $13.8 million for new awards and $75.3 million for continuation 

awards. 

Parent Information Centers

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $26.0 $26.0 $26.0 

Parent Information Centers provide parents with the training and information they need to work 

with professionals in meeting the early intervention and special education needs of their children 

with disabilities. The request would support new and continuation awards for about 99 centers 

as well as technical assistance to the centers. 

Technology and Media Services

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $37.7 $32.7 $32.7 

This program supports research, development, and other activities to advance the application of 

new and emerging technologies in providing special education and early intervention services. 

Funds are also used for media-related activities such as captioning films and television for 

individuals with hearing impairments and video description and activities related to providing 

accessibility to textbooks for individuals with visual impairments. 
-34- 

Rehabilitation Services and Disability Research 

Vocational Rehabilitation (VR) State Grants

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $2,481.4 $2,616.3 $2.668.7 

Vocational Rehabilitation State Grants provide funds to State vocational rehabilitation agencies 

to help individuals with disabilities become gainfully employed. Funds are distributed on the 

basis of a formula that takes into account population and per capita income. 

A wide range of services is provided each year to about 1.2 million individuals with disabilities, 

including vocational evaluation, counseling and guidance, work adjustment, diagnosis and 

treatment of physical and mental impairments, education and vocational training, job placement, 

and post-employment services. If States are unable to serve all eligible individuals with 

disabilities who apply, they must give priority to individuals with the most significant disabilities. 

Services are provided according to an individualized plan for employment. In 2001, the VR 

program helped over 233,000 individuals with disabilities achieve employment outcomes, with 

over 87.6 percent entering the competitive labor market or becoming self-employed. 

Approximately 87 percent of the individuals who achieved employment have significant 

disabilities. 

The $2.7 billion request, an increase of $52.3 million or 2.0 percent, would help State VR 

agencies increase the participation of individuals with disabilities in the labor force. With the 

fiscal year 2003 budget, the Administration launched a wide-ranging reform of the Federal 

government 's overlapping training and employment programs. The multi-year reform effort 

targets resources to programs with documented effectiveness, and eliminates funding for 

ineffective, duplicative, and overlapping programs. Consistent with this crosscutting reform, the 

2003 President’s budget request consolidated funding funding for three secondary vocational 

rehabilitation programs in this account (Supported Employment State Grants, Projects with 

Industry (PWI), and the Migrant and Seasonal Farmworkers program) within the Vocational 

Rehabilitation State Grants program. The 2004 request assumes enactment of the proposed 

consolidation. The total also includes $27.6 million for grants to Indian tribes. 

Vocational Rehabilitation Incentive Grants

 

 2003 2004 

 2002 Request Request

BA in millions................................................ — $30.0 — 

The 2003 President’s request proposed $30 million for a new Vocational Rehabilitation Incentive 

Grants program to improve State performance under the Vocational Rehabilitation State Grants 

program. The Administration is not requesting additional funds for VR Incentive Grants in fiscal 

year 2004. The funds requested in fiscal year 2003 for this new program would be available for 

grants to States through September 30, 2004. This level of funding is sufficient for the start-up 

of this new program and will provide the Department with the flexibility to obligate funds over the 

two-year period in response to State interest. 
-35- 

Client Assistance State Grants

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $11.9 $11.9 $11.9 

This program makes formula grants to States for activities to inform and advise clients of 

benefits available to them under the Rehabilitation Act and to assist them in their relationships 

with service providers, including remedies to ensure the protection of their rights under the Act. 

The request will provide advocacy services to approximately 56,800 individuals with disabilities. 

Training

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $39.6 $42.6 $42.6 

This program makes grants to State and public or other nonprofit agencies and organizations, 

including institutions of higher education, to help ensure that personnel with adequate skills are 

available to provide rehabilitation services to persons with disabilities. The request would 

provide $34.6 million to continue activities that began in previous fiscal years and $7.1 million 

for new awards. 

Demonstration and Training Programs

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $21.2 $17.5 $24.5 

Demonstration and Training programs support projects that expand and improve the provision 

of rehabilitation and other services authorized under the Rehabilitation Act, or that further the 

purposes and policies of the Act. The program also supports activities that increase the 

provision, extent, availability, scope, and quality of rehabilitation services under the Act, 

including related research and evaluation activities. The request includes $7 million in new 

funding for transition mentoring projects that would enhance the capacity of State VR agencies 

to support transitioning students in pursuing careers that offer quality employment consistent 

with their abilities, interests, and informed choice. 

Protection and Advocacy of Individual Rights 

 

 2003 2004 

 2002 Request Request

BA in millions................................................ $15.2 $15.2 $17.9 

This program supports systems in each State to protect and advocate for the legal and human 

rights of individuals with disabilities. These systems pursue legal and administrative remedies 
-36- 

to ensure the protection of the rights of individuals with disabilities under Federal law and 

provide information on and referrals to programs and services for individuals with disabilities. 

The $2.7 million increase for 2004 would help offset the elimination of funding for the Protection 

and Advocacy for Assistive Technology program previously funded under Title I of the Assistive 

Technology Act (AT Act), since similar services may be provided under the PAIR program. 

Independent Living

(BA in millions) 

 2003 2004 

 2002 Request Request

Independent Living State Grants.................. $22.3 $22.3 $22.3 

Centers for Independent Living .................... 62.5 69.5 69.5 

Services for Older Blind Individuals.............. 25.0 25.0 25.0

Total.................................................. 109.8 116.8 116.8 

These programs provide services to individuals with disabilities to maximize their independence 

and productivity and to help integrate them into the mainstream of American society. The State 

Grants program awards formula grants to States to expand and improve independent living 

services and to support the operation of centers for independent living. The Centers for 

Independent Living program makes competitive grants to support a network of consumercontrolled, nonresidential, community-based centers that provide a broad range of independent 

living services. Services for Older Blind Individuals assists individuals aged 55 or older whose 

severe visual impairment makes competitive employment difficult to obtain, but for whom 

independent living goals are feasible. At the requested level, program funds would support 

services to clients directly through 349 Centers for Independent Living and support State efforts 

through grants to 81 designated state units under the State Grants program and 56 grantees 

under the Services for Older Blind Individuals program. 

Program Improvement

 2003 2004 

 2002 Request Request

BA in millions................................................ $0.9 $0.9 $0.9 

These funds support activities that increase program effectiveness, improve accountability, and 

enhance the Department’s ability to address critical areas of national significance in achieving 

the purposes of the Rehabilitation Act. The request would continue support for the National 

Vocational Rehabilitation Technical Assistance Center as well as on-going performance 

measurement and dissemination activities. 

Evaluation

 2003 2004 

 2002 Request Request

BA in millions................................................ $1.0 $1.0 $1.0 
-37- 

These funds are used to evaluate the impact and effectiveness of programs authorized by the 

Rehabilitation Act of 1973. The request would enable the Department to continue support for 

two studies initiated in previous years, provide technical support for enhancing the VR program 

standards and indicators, and begin one new study. 

Helen Keller National Center for Deaf-Blind Youths and Adults

 2003 2004 

 2002 Request Request

BA in millions................................................ $8.7 $8.7 $8.7 

This program serves individuals who are deaf-blind, their families, and service providers through 

a national headquarters Center with a residential training and rehabilitation facility; a network of 

10 regional field offices that provide referral, counseling, and technical assistance; and an 

incentive grant program for public and private agencies that serve individuals with 

deaf-blindness. At the request level, the Center would provide direct services for approximately 

90 adult clients and 12 high school students at its residential training and rehabilitation program; 

serve 1,400 individuals, 450 families, and 1,000 agencies through its regional field offices; and 

award 1 new incentive grant. 

National Institute on Disability and Rehabilitation Research (NIDRR)

 2003 2004 

 2002 Request Request

BA in millions................................................ $110.0 $110.0 $110.0 

NIDRR helps improve the lives of persons of all ages with disabilities through a comprehensive 

and coordinated program of research, demonstration projects, and related activities, including 

training of persons who provide rehabilitation services or who conduct rehabilitation research. 

NIDRR awards discretionary grants that support rehabilitation research and training centers, 

rehabilitation engineering research centers, and disability and rehabilitation research projects 

that address diverse issues in rehabilitation, including the causes and consequences of 

disability and ways to improve educational, employment, and independent living opportunities 

for persons with disabilities. Grants or contracts are also awarded for utilization and 

dissemination of research results and for training. 

The request provides sufficient funds to allow NIDRR to continue to support programs that were 

part of the President’s New Freedom Initiative, including the Rehabilitation Engineering 

Research Centers (RERC) program, the Assistive Technology Development Fund, and the 

Interagency Committee on Disability Research. In recent years, the RERCs have sponsored 

some of the Nation’s most innovative assistive technology research—including work in 

augmentative and alternative communication, telerehabilitation, and universal design—that has 

allowed individuals with disabilities to achieve greater independence in all facets of life. 

Similarly, the Assistive Technology Development Fund helps stimulate technological innovation 

in the private sector and strengthen the role of small businesses in developing new assistive 

technologies and bringing them to market. Finally, continued funding for the Interagency 

Committee on Disability Research would promote greater cooperation across various 

government agencies in the development and execution of disability and rehabilitation research 

activities. 
-38- 

Assistive Technology

(BA in millions) 

 2003 2004 

 2002 Request Request

Title I .......................................................... $24.3 $15.7 — 

Title III .......................................................... 36.6 15.2 — 

 

 Total.................................................. 60.9 30.9 — 

The Assistive Technology Act (AT Act) supports grants to States to increase access to and 

funding for assistive technology devices and services for individuals with disabilities of all ages. 

Title I of the AT Act authorizes the Assistive Technology State Grant program, protection and 

advocacy (P&A) services related to assistive technology, and technical assistance activities. 

Title III of the AT Act authorizes the Alternative Financing Program (AFP). The Administration’s 

request would eliminate funding for Title I because the program has achieved its primary 

purpose. The 2003 request for the AT State Grant program will have funded all States for at 

least 10 years and 31 States for at least 13 years. P&A services for assistive technology are 

authorized and can be provided by the P&A systems funded through the Protection and 

Advocacy of Individual Rights program. 

The 2004 request does not include additional funding for the Title III AFP program, but the 

Administration will consider future funding needs, possibly in 2005, when available funds have 

been expended and many more States are operating AFPs. 

Access to Telework Fund

 2003 2004 

 2002 Request Request

BA in millions................................................ $20.0 — — 

This New Freedom Initiative program seeks to increase employment opportunities for 

individuals with disabilities by providing greater access to computers and other equipment 

individuals need to work from home if they choose. To accomplish this goal, the Fund will 

provide Federal matching funds through discretionary grants to States that will finance loans for 

individuals with disabilities to purchase computers and other equipment so that they can 

telework from home. Additional funds are not requested in fiscal year 2004 because the 

$20 million appropriated in fiscal year 2002, and available through fiscal year 2003, has not yet 

been expended. 
-39- 

Special Institutions for Persons with Disabilities

(BA in millions) 

 2003 2004 

 2002 Request Request

American Printing House 

for the Blind (APH) ................................. $14.0 $14.0 $14.0 

National Technical Institute 

for the Deaf (NTID)................................. 55.4 52.0 50.8 

Gallaudet University ..................................... 96.9 94.4 94.4

Total.................................................. 166.3 160.5 159.2 

The American Printing House for the Blind provides special education materials for students 

who are visually impaired, offers advisory services for consumers, and conducts applied 

research. At the request level, APH would provide free educational materials to approximately 

58,500 persons with visual impairments at an average per student allotment of $185.13, 

implement a number of initiatives to improve its technical assistance and outreach services, and 

conduct a wide variety of continuing and new research projects. 

The National Technical Institute for the Deaf provides postsecondary technical education and 

training for students who are deaf and graduate education and interpreter training for persons 

who are deaf or hearing. NTID also conducts research and provides training related to the 

education and employment of individuals who are deaf. The request would provide 

$49.4 million for operations, $367,000 for construction projects to upgrade academic and 

dormitory facilities, and $1 million for the Endowment Grant program. In 2004, NTID would 

provide education and training to approximately 1,080 undergraduate and technical students, 75 

graduate students, and 100 interpreters for persons who are deaf. 

Gallaudet University offers undergraduate and continuing education programs for persons who 

are deaf and graduate programs for persons who are deaf or hearing. The request includes 

$93.4 million for operations and $1 million for the Endowment Grant program. Gallaudet also 

maintains and operates the Kendall Demonstration Elementary School and Model Secondary 

School for the Deaf. In 2004, the University would serve approximately 1,320 undergraduate 

and professional studies students, 700 graduate students, and 365 elementary and secondary 

education students. 
-40- 

C. VOCATIONAL AND ADULT EDUCATION 

Overview 

Programs in the Vocational and Adult Education account, as they are currently configured, 

provide formula grants to States to further State and community efforts to improve vocational 

education programs and adult education and literacy systems. With the exception of two 

literacy programs for incarcerated youth and adults, all programs in this account are subject to 

reauthorization in 2004. 

The fiscal year 2004 budget request of $1.591 billion for this account supports the 

Administration’s reauthorization strategy to reshape the Federal investment in education for the 

workforce and intensify the focus on adult literacy skills. A proposed new Secondary and 

Technical Education program would shift from providing traditional vocational education to an 

entirely new focus on supporting academic achievement at the high school level and on 

providing high-quality technical education at the community college level that is coordinated with 

local high schools. It would also promote stronger accountability for results by linking grantee 

funding to success in achieving student outcomes. Funding in this account would provide 

States, local educational agencies, community colleges, and schools with the resources to 

strengthen academic and technical education at the secondary and postsecondary levels. Also, 

proposed amendments to the adult education programs would strengthen local accountability 

for improved instruction in reading, mathematics, and English literacy. 

Vocational Education (Secondary and Technical Education)

(BA in millions) 

 2003 2004 

 2002 Request Request

Secondary and Technical Education 

 State Grants ........................................... — — $1,000.0 

Vocational Education State Grants .............. $1,180.0 $1,180.0 — 

Tech-Prep Education State Grants .............. 108.0 108.0 — 

Tech-Prep Demonstration ............................ 5.0 — — 

National Programs........................................ 12.0 12.0 — 

Occupational and Employment Information . 9.5 — —

 Total.................................................. 1,314.5 1,300.0 1,000.0 

The Administration’s reauthorization strategy would create a coordinated high school and 

technical education improvement program, Secondary and Technical Education State Grants, to 

replace of the current Vocational Education State Grants. The $1 billion request for this new 

program would support and extend the achievement and accountability goals of Title I of the 

Elementary and Secondary Education Act (ESEA) by requiring States and school districts to 

focus more intensively on improving student outcomes, such as academic achievement, and 

ensuring that students are being taught the necessary skills to make successful transitions from 

high school to college and college to the workforce. States would use formula allocations to 

make competitive grants to local educational agencies and community and technical colleges 

and to carry out State-level activities. In addition, to help facilitate coordination with ESEA Title I 

and enhance flexibility in how Federal funds are used to achieve positive student outcomes, 

States would have the option to transfer funds to support education-related activities under the 

Title I Grants to Local Educational Agencies program. 
-41- 

No funds are requested for most current vocational education programs, including National 

Programs, Occupational and Employment Information, Tech-Prep State Grants, and the TechPrep Demonstration. Although currently authorized under the Perkins Act, the Department is 

requesting funds for the Tribally Controlled Postsecondary Vocational and Technical Institutions

program in the Higher Education account. 

Adult Education (Adult Basic and Literacy Education)

(BA in millions) 

 2003 2004 

 2002 Request Request

Adult Basic and Literacy Education 

 State Grants ........................................... — — $584.3 

Adult Education State Grants....................... $575.0 $575.0 — 

National Institute for Literacy........................ 6.6 6.6 6.7 

National Leadership Activities ...................... 9.5 9.5 —

 Total.................................................. 591.1 591.1 591.0 

The Administration plans to propose amendments for the reauthorization of the Adult Education 

and Family Literacy Act to increase the focus on building stronger skills in basic reading, math, 

and English acquisition for adults who need to strengthen weak literacy skills or want to earn 

their high school diploma or its recognized equivalent (the GED). Among other things, proposed 

amendments would revise current accountability provisions, add a new State requirement for 

developing and implementing educational standards for adult literacy activities leading to high 

school-level proficiency, require that teachers be trained in the use of research-validated 

instructional practices in reading, math and English fluency, and strengthen provisions for 

employer partnerships and for the participation of community- and faith-based organizations in 

the program. 

The request includes $6.7 million for the National Institute for Literacy, with the expectation that 

new authorizing legislation would continue support for its communication, capacity-building, and 

policy analysis activities. No funds are requested under the current, separate National 

Leadership Activities authority. The reauthorization strategy will address national activities, 

including technical assistance and evaluation, as part of the proposed State Grants program. 
-42- 

D. STUDENT FINANCIAL ASSISTANCE

 

Overview 

The 2004 budget reflects President Bush’s commitment to equal access to a quality 

postsecondary education for all Americans. The request would increase funding for the Pell 

Grant program, the foundation of Federal need-based student financial assistance, by nearly 

$1.9 billion, and more than triple loan forgiveness benefits for highly qualified math, science, 

and special education teachers in schools serving low-income populations.

Following are the highlights of the Administration’s 2004 budget: 

• A $1.9 billion increase for the Pell Grant program, for an all-time high total of $12.7 billion, to 

retire a shortfall related to the 2002-2003 award year while maintaining a $4,000 maximum 

award for over 4.8 million students. 

• The request assumes that the significant surge in the Pell Grant applicant growth rate over 

the past few years will begin to level off in 2003-04 and return to levels consistently seen 

prior to 2001-02. However, if applicant growth rates remain at unusually high levels, 

projected Pell Grant program costs would significantly increase above the budget estimates. 

• The budget assumes Internal Revenue Service matching of student aid application income 

data with applicant tax data would reduce Pell Grant overawards and save an estimated 

$638 million in 2003 and 2004. These savings would significantly reduce existing funding 

shortfalls in the Pell Grant program. 

• Student financial aid available would expand to $62.3 billion, excluding the consolidation of 

existing student loans, an increase of $3.1 billion or 5 percent over the level supported in the 

2003 President’s Budget. The number of recipients of grant, loan, and work-study 

assistance would grow by 386,000 to 9.2 million students and parents. 

• Loan forgiveness for highly qualified math, science, and special education teachers serving 

low-income communities would be expanded from $5,000 to a maximum of $17,500. 

Schools in these communities often are forced to hire uncertified teachers or assign 

teachers who are teaching “out-of-field.” This proposal would help these schools recruit and 

retain highly qualified math, science, and special education teachers. 

• To improve accountability and ensure the efficient, cost-effective delivery of over $80 billion 

in Federal student aid, the Administration is proposing to consolidate nearly $950 million in 

administrative funding, currently split among 3 separate accounts, into a new discretionary 

Student Aid Administration account. Most of these funds support payments to private-sector 

contractors or guaranty agencies that help administer the student loan programs. 
-43- 

Student Aid Summary Tables 

 2003 2004 

Budget Authority ($ in millions) 2002 Request Request

Pell Grants1 ................................................... $11,314.0 $10,863.0 $12,715.0

Supplemental Grants.................................... 725.0 725.0 725.0

Work-Study.................................................... 1,011.0 1,011.0 1,011.0 

Perkins Loans................................................ 167.5 167.5 67.5 

Leveraging Educational Assistance 

 Partnerships 2

 ......................................... 67.0 — —

Loan Forgiveness for Child Care Providers .. 1.0 1.0 — 

Federal Family Education Loans3

.................. 4,311.7 3,421.8 6,272.1

Federal Direct Loans4

.................................... -721.9 4,102.8 -865.9

 Total................................................... 16,863.3 20,292.1 19,924.7

 1 Amount for 2002 includes proposed supplemental appropriation of $1.0 billion. 2 Includes $37 million in 2002 for Special LEAP. 3 Budget authority requested for FFEL does not include the liquidating account. 

4 For Direct Loans, the value of estimated future repayments and collections on defaults will exceed 

estimated default costs and in-school interest subsidies. Therefore, no new BA is required. The 2003 figure is 

positive because of a $4.6 billion upward re-estimate largely attributable to revised interest rate estimates for prior 

cohorts. 

Aid Available to Students ($ in millions)1 

 2003 2004 

 2002 Request Request

Pell Grants.................................................... $11,600 $11,460 $11,385

Campus-based Programs: 

Supplemental Grants.............................. 918 918 918 

Work-Study............................................. 1,218 1,218 1,218 

Perkins Loans......................................... 1,265 1,265 1,137

Subtotal, Campus-based programs.............. 3,401 3,401 3,273 

Leveraging Educational Assistance 

 Partnerships2 .......................................... 171 — — 

Loan Forgiveness for Child Care Providers... 1 1 —

Federal Family Education Loans.................. 28,606 31,536 33,945 

Federal Direct Loans.................................... 11,689 12,763 13,636 

Consolidation Loans3 ................................... 31,538 24,411 19,097

Total.................................................. 87,006 83,572 81,336

 

 1 Shows total aid generated by Department programs, including Federal Family Education Loan capital, 

Perkins Loan capital from institutional revolving funds, and institutional and State matching funds.

2 Reflects only the LEAP program's statutory State matching requirements. State maintenance-of-effort and 

discretionary contributions above the required match significantly increase the number of grant recipients, the amount 

of available aid, and the average award. 

3

 New FFEL and Direct Loans issued to consolidate existing loans. 
-44- 

Number of Student Aid Awards

(in thousands) 

 2003 2004 

 2002 Request Request

Pell Grants..................................................... 4,812 4,866 4,873 

Campus-based programs: 

Supplemental Grants............................... 1,189 1,189 1,189 

Work-Study.............................................. 1,073 1,073 1,073 

Perkins Loans.......................................... 707 707 635

Subtotal, Campus-based programs............... 2,969 2,969 2,897 

Leveraging Educational Assistance 

 Partnerships1 ........................................... 171 — — 

Loan Forgiveness for Day Care Providers2

... — — — 

Federal Family Education Loans................... 7,274 7,919 8,415 

Federal Direct Loans..................................... 2,908 3,086 3,259 

Consolidation Loans...................................... 1,090 911 713

Total awards............................................ 19,224 19,751 20,157

 

 1

 Reflects only the LEAP program's statutory State matching requirements. State maintenance-of-effort and 

discretionary contributions above the required match significantly increase the number of grant recipients, the amount 

of available aid, and the average award.

 2 Due to the limited funding level available for this demonstration program in 2002 and 2003, recipients are 

projected to total fewer than 100. No funding is requested in 2004. 

Number of Postsecondary Students Aided by Department Programs

 Unduplicated Count (in thousands) .. 8,385 8,855 9,241 

Tax Benefits for Postsecondary Students and Their Families 

In addition to Department of Education grant, loan, and work-study programs, significant support 

for postsecondary students and their families is available through tax credits and deductions for 

higher education expenses, including tuition and fees. For example, in 2004 students and 

families will save an estimated $2.9 billion under the HOPE tax credit, which allows a credit of 

up to $1,500 for tuition and fees during the first 2 years of postsecondary education; $3.0 billion 

under the Lifetime Learning tax credit, which allows a credit of up to $2,000 for undergraduate 

and graduate tuition and fees; $2.9 billion under a new above-the-line deduction of up to $4,000 

annually in higher education expenses; and $660 million in above-the-line deductions for 

interest paid on postsecondary student loans. 
-45- 

Pell Grants

 2003 2004 

 2002 Request Request

BA in millions................................................. $11,314.01 $10,863.0 $12,715.0 

Program costs ($ in millions)......................... 11,624.0 11,484.0 11,410.0 

Aid available ($ in millions)............................ 11,600.3 11,459.6 11,385.3 

Recipients (in thousands).............................. 4,812 4,866 4,873 

Maximum grant.............................................. $4,000 $4,000 $4,000 

Average grant................................................ $2,411 $2,355 $2,336 

1 Includes supplemental appropriation of $1.0 billion. 

The Pell Grant program helps ensure financial access to postsecondary education by providing 

grant aid to low- and middle-income undergraduate students. The program is the most needfocused of the Department's student aid programs, with individual awards varying according to 

the financial circumstances of students and their families. 

The Administration requests $12.7 billion to support Pell Grants in 2004. In recent years, the 

number of Pell Grant applicants and recipients has grown much faster than historical trends 

would predict (as has college enrollment overall). Specifically, from 2000 to 2002, the number 

of Pell recipients increased by nearly 25 percent, compared with 5 percent growth from 1997 to 

1999. After never growing by more than 2.6 percent for any award year from 1995-96 to 2000-

01, the number of valid Pell Grant applicants grew by 8.6 percent in 2001-02 and a projected 

10.2 percent in 2002-03 (see table). These increases primarily result from an influx of 

independent students (generally, independent students are older and do not depend on parents 

or guardians to pay for college). 

Federal Pell Grant Applicant Growth

 

Award Year Valid Applicants Difference % Change

1995-96 7,935,336 158,167 2.0% 

1996-97 8,064,889 129,553 1.6% 

1997-98 8,216,685 151,796 1.9% 

1998-99 8,309,645 92,960 1.1% 

1999-00 8,527,162 217,517 2.6% 

2000-01 8,716,124 188,962 2.2% 

2001-02 9,467,997 751,873 8.6% 

2002-03 10,434,106 966,109 10.2% 

2003-04 10,643,080 208,974 2.0% 

2004-05 10,802,309 159,229 1.5% 

 

Sources: Award Year 1999-00 Pell Grant End-of-Year Report and Final Management/Operations-02 Reports. 

Notes: Award Year 2002-03 is an estimate based on current trends as of 12/1/02, with an estimated 

90 percent of total applicants processed). Award Years 2003-04 and 2004-05 are estimates. 
-46- 

As a result of this unexpected growth, as well as a $700 increase in the maximum grant from 

2000 to 2002, Pell Grant appropriations for the past few years have been insufficient to fully 

cover annual program costs. Funding for 2004 is requested to retire the shortfall related to the 

2002-2003 award year while maintaining a $4,000 maximum award for the growing numbers of 

students eligible for Pell Grants for undergraduate education and job training. (This request 

assumes a small portion of 2004-2005 program costs would be funded from the 2005 

appropriation.) 

The Budget assumes that the significant surge in the applicant growth rate that began with the 

2001-02 award year will begin to level off in 2003-04 and return to levels consistently seen prior 

to 2001-02. It is important to note, however, that if applicant growth rates continue at their 

unusually high levels, projected Pell Grant program costs would significantly increase above the 

budget estimates. As shown in the following table, if applicant growth stayed at 10 percent over 

award years 2003-04 and 2004-05, programs cost would increase by more than $1.4 billion. 

Estimated Cost Alternatives of Pell Grant Applicant Growth Rates

 

Pell Grant Valid Applicant Growth Rates 

AY 2003-04 0.00% 3.50% 5.00% 7.00% 10.00% 

AY 2004-05 0.00% 3.50% 5.00% 7.00% 10.00% 

 

Est. Cost Effect 

AY 2003-04: -$75M +$325M +$450M +$645M +$925M 

 

Est. Cost Effect 

AY 2004-05: -$175M +$165M +$225M +$335M + $565M 

 

Est. Two-Year 

Cost Effect: -$250M +$490M +$675M +$980M +$1,490M 

 

Note: Cost effects are based on current law policies. The cost effect for award year 2003-04 is compared to 

the current estimated program cost of $11.6 billion for award year 2002-03.

Campus-Based Programs 

The Supplemental Educational Opportunity Grant, Work-Study, and Perkins Loan programs are 

collectively referred to as the “campus-based” programs; grants in these programs are made 

directly to participating institutions, which have considerable flexibility to package awards to best 

meet the needs of their students. 

Supplemental Educational Opportunity Grants

 2003 2004 

 2002 Request Request

BA in millions................................................ $725.0 $725.0 $725.0 

Aid available (in millions)............................... 918 918 918 

Recipients (in thousands).............................. 1,189 1,189 1,189 

Average award .............................................. $772 $772 $772 
-47- 

The Supplemental Educational Opportunity Grant (SEOG) program provides grant assistance of 

up to $4,000 per academic year to undergraduate students with demonstrated financial need. 

The $725 million request would leverage $193 million in institutional matching funds to make 

available a total of approximately $918 million in grants to an estimated 1.2 million recipients. 

SEOG funds are allocated to institutions according to a statutory formula. The program also 

requires a 25 percent institutional match. Awards are determined at the discretion of 

institutional financial aid administrators, although schools are required to give priority to Pell 

Grant recipients and students with the lowest expected family contributions. 

Work-Study

 2003 2004 

 2002 Request Request

BA in millions................................................. $1,011.0 $1,011.0 $1,011.0 

Aid available ($ in millions)............................ 1,218 1,218 1,218 

Recipients (in thousands).............................. 1,073 1,073 1,073 

Average award .............................................. $1,135 $1,135 $1,135 

The Work-Study program provides grants to participating institutions to pay up to 75 percent of 

the wages of needy undergraduate and graduate students working part-time to help pay their 

college costs. The school or other eligible employer provides the remaining 25 percent of the 

student’s wages. Funds are allocated to institutions according to a statutory formula, and 

individual award amounts to students are determined at the discretion of institutional financial 

aid administrators. At the request level, over 1 million students would receive more than 

$1 billion in award year 2004-05. 

The program encourages institutions to use Work-Study funds to promote community service 

activities. Institutions must use at least 7 percent of their Work-Study allocations to support 

students working in community service jobs, and such activities must include at least one 

reading tutor or family literacy project. In addition, the Department waives the 25 percent 

employer-matching requirement for students who work as reading or math tutors. 

Perkins Loans

(BA in millions) 

 2003 2004 

 2002 Request Request

Federal Capital Contributions........................ $100.0 $100.0 — 

Loan Cancellation Payments......................... 67.5 67.5 67.5 

Loan volume ($ in millions)............................ 1,265 1,265 1,137 

Number of borrowers (in thousands)............. 707 707 635 

Average loan ................................................. $1,790 $1,790 $1,790 

The Perkins Loan program provides long-term, low-interest loans to undergraduate and 

graduate students with demonstrated financial need at 2,000 institutions. Total assets of over 
-48- 

$7 billion represent nearly 40 years of Federal capital contributions, institutional matching funds, 

repayments on previous loans, and reimbursements for cancellations. 

The request includes no funding for new Perkins Loan Federal Capital Contributions. These 

funds are no longer necessary, as repayments of existing Perkins Loans into Federal revolving 

funds held at institutions will continue to support more than $1 billion in new Perkins Loans each 

year. In addition, given the existence of the Federal Family Education Loan and Ford Direct 

Student Loan programs, as well as the current interest rate environment, additional Federal 

capital contributions are not needed to assure the availability of affordable loan aid. 

Perkins Loan borrowers pay no interest during in-school, grace, and deferment periods, and are 

charged 5 percent interest during the principal repayment period. Annual borrowing limits are 

$4,000 for undergraduate students and $6,000 for graduate and professional students. 

Perkins Loan Cancellations reimburse institutional revolving funds for borrowers whose loan 

repayments are canceled in exchange for undertaking certain public service employment, such 

as teaching in Head Start programs, full-time law enforcement, or nursing. Cancellations have 

increased significantly in recent years due to expansions of eligibility by the Higher Education 

Amendments of 1992 and 1998. 

Federal Family Education Loans and Direct Loans

 2003 2004 

 2002 Request Request

Federal Family Education Loans 

New Loan Subsidies (BA) ...................... $4,311.7 $6,401.6 $6,272.1 

Re-estimate of Prior Loans 1................... — 2,979.9 —

Total, FFEL Program BA .................. 4,311.7 3,421.8 6,272.1

Direct Loans 

New Loan Subsidy (BA)2 ........................ -721.9 -488.1 -865.9 

Re-estimate of Prior Loans1 ................... — 4,590.9 —

Total, New Budget Authority............. -721.9 4,102.8 -865.9

Total, Student Loans (BA) ......... 3,589.8 7,524.6 5,406.2 

 1 Under Credit Reform, the subsidy amounts needed for active loan cohorts are re-estimated annually in 

both Direct Loans and FFEL to account for changes in long-term projections. In 2003, the Direct Loans re-estimate 

primarily reflects lower interest rate projections leading to lower repayment estimates, while the FFEL re-estimate is 

largely attributable to revised default collection estimates in prior cohorts reflecting actual trends in default recoveries 

that exceed earlier experience. 

 2 No new budget authority is required for Direct Loans because the value of future repayments will exceed 

default costs and in-school interest subsidies.
-49- 

New loan volume (in millions)

 2003 2004 

 2002 Request Request

Federal Family Education Loans 

 New loans................................... $28,606 $31,536 $33,945 

 Consolidation loans ................... 22,693 16,986 12,999

 Subtotal, FFEL...................... 51,299 48,522 46,944 

Direct Loans 

 New loans................................... 11,689 12,763 13,636 

 Consolidation loans .................... 8,845 7,425 6,098

 Subtotal, Direct Loans .......... 20,534 20,188 19,734 

 Total...................................... 71,833 68,710 66,678

Number of loans (in thousands)

Federal Family Education Loans 

 New loans................................... 7,274 7,919 8,415 

 Consolidation loans ................... 726 572 436

 Subtotal, FFEL...................... 8,000 8,491 8,851

Direct Loans 

 New loans.................................... 2,908 3,086 3,259 

 Consolidation Loans.................... 364 339 277

 Subtotal, Direct Loans .......... 3,272 3,425 3,536 

 Total...................................... 11,272 11,916 12,387 

The Department of Education operates two major student loan programs: the Federal Family 

Education Loan (FFEL) program and the William D. Ford Federal Direct Loan (Direct Loan) 

program. These two programs meet an important Department goal by helping ensure student 

access to and completion of high-quality postsecondary education. Competition between the 

two programs and among FFEL lenders has led to a greater emphasis on borrower satisfaction 

and resulted in better customer service to students and institutions. 

The FFEL program makes loan capital available to students and their families through some 

3,500 private lenders. There are 36 active State and private nonprofit guaranty agencies which 

administer the Federal guarantee protecting FFEL lenders against losses related to borrower 

default. These agencies also collect on defaulted loans and provide other services to lenders. 

The FFEL program accounts for about 70 percent of student loan volume. 

The Direct Loan program was created by the Student Loan Reform Act of 1993. Under this 

program, the Federal Government uses Treasury funds to provide loan capital directly to 

schools, which then disburse loan funds to students. The Direct Loan program began operation 

in academic year 1994-95 and now accounts for about 30 percent of new student loan volume. 

Basic Loan Program Components

Both FFEL and Direct Loans feature four types of loans with similar fees and maximum 

borrowing amounts: 
-50- 

• Stafford Loans are subsidized, low-interest loans based on financial need. The Federal 

Government pays the interest while the student is in school and during certain grace and 

deferment periods. The interest rate varies annually and is capped at 8.25 percent. For 

July 1, 2002 through June 30, 2003, the rate for borrowers in repayment has been set at 

4.06 percent. 

• Unsubsidized Stafford Loans are offered at the same low rates as subsidized Stafford 

Loans, but the Federal Government does not pay interest for the student during 

in-school, grace, and deferment periods. 

• PLUS Loans are available to parents of dependent undergraduate students at slightly 

higher rates than Stafford or Unsubsidized Stafford Loans, and the Federal Government 

does not pay interest during in-school, grace, and deferment periods. The interest rate 

varies annually and is capped at 9 percent. The 2002-2003 rate is 4.86 percent. 

• Consolidation Loans allow borrowers with multiple student loans who meet certain 

criteria to combine their obligations and extend their repayment schedules. The rate for 

both FFEL and Direct Consolidation Loans is based on the weighted average of loans 

consolidated rounded up to the nearest 1/8th of a percent. 

In recent years, a combination of historically low interest rates and aggressive marketing have 

resulted in dramatic increases in Consolidation loan volume, which grew from $12 billion in 

fiscal year 2000 to $32 billion in fiscal year 2002. Higher interest rates and a diminished pool of 

potential consolidators in future years are expected to reduce Consolidation loan volume to 

$19 billion in 2004. 

The 2004 Request 

For 2004, the Administration is proposing to expand loan forgiveness for mathematics, science, 

and special education teachers. Currently, teachers in qualified low-income schools who were 

new borrowers as of October 1998 and teach for five consecutive years are eligible for up to 

$5,000 in loan forgiveness. The Administration proposes to substantially increase the amount of 

forgiveness up to $17,500 for math, science, or special education teachers who meet the 

definition of highly qualified included in the No Child Left Behind Act and serve in high-need 

schools. This proposal is estimated to cost $52 million in additional subsidy for new loans made 

in fiscal year 2004, plus $147 million for existing loans. Over the next 10 years, the policy will 

cost an estimated $696 million. 

Student Aid Program Management 

The Administration proposes to centralize its request for $947.0 million to administer the Federal 

student aid programs within a unified new discretionary Student Aid Administration account. 

The current student aid administration budget structure—split among multiple mandatory, 

discretionary, and subsidy accounts—hinders the increased accountability for reducing costs 

and improving financial controls that are at the foundation of the Secretary’s Blueprint for 

Management Excellence. 
-51- 

The 2004 request represents a $15.0 million, or 1.6 percent, increase over the amount 

supporting student aid administrative activities in 2003. The largest portions of this increase are 

$6.8 million for growth in central support costs such as enhanced security and the relocation of 

a number of regional offices; $4 million to support increases in personnel compensation 

associated with the 2.0 percent cost-of-living adjustment scheduled for January 2004; and 

$3.0 million for improvements to the Department’s financial management system. 

Primary responsibility for administering the student aid programs lies with the Office of 

Postsecondary Education and the performance-based Federal Student Aid (FSA). FSA was 

created by Congress in 1998 with a mandate to modernize student aid delivery and 

management systems, improve service to students and other student aid program participants, 

reduce the cost of student aid administration, and improve accountability and program integrity. 

Most student aid administrative funding supports payments to guaranty agencies and to private 

contractors that service Direct Loans, process student loan applications, and disburse and 

account for student aid awards to students, parents, and schools. 

The Administration is in the process of developing an activity-based budget formulation process 

for the unified Student Aid Administration account. Such a process would allocate the 

Department’s student aid management expenses to specific business processes to more 

accurately determine the cost of individual activities or programs, budget administrative funds to 

each business process, set cost reduction targets, and easily compare actual performance to 

budget targets. 
-52- 

E. HIGHER EDUCATION PROGRAMS 

Overview 

New data from the National Center for Education Statistics predict that college enrollments will 

continue increasing to record highs during the first decade of this century. The current 

enrollment is expected to increase 13 percent by the year 2012, to a total of 17.7 million 

students. To meet this growing need, our fiscal year 2004 budget requests $2.2 billion to 

strengthen support for a range of programs that complement the efforts of the No Child Left 

Behind Act by supporting institutional development, providing opportunities for students to gain 

international expertise and training as language and area specialists, strengthening student 

services, and designing innovations to improve the quality and availability of postsecondary 

education. 

The majority of Higher Education programs serve to enhance the quality of and access to 

postsecondary education, contributing to Goal 5 of the Department’s Strategic Plan. These 

programs strengthen the quality of institutions of higher education; provide financial aid to 

increase access to college; and strengthen the programs and services that prepare students for 

and support them during college. As the reauthorization of the Higher Education Act nears and 

the Nation’s attention turns towards ensuring that every child develops the knowledge and skills 

to be successful in the 21st century, it is critical for the Administration to demonstrate a strong 

commitment toward educating the future workers of America. 

Therefore, the 2004 request provides an increase of 5 percent for programs to strengthen 

institutions of higher education that serve high proportions of minority and disadvantaged 

students, including Historically Black Colleges and Universities, Historically Black Graduate 

Institutions, Hispanic-serving Institutions, and Tribally Controlled Colleges and Universities. 

The request also provides $102.5 million for the International Education and Foreign Language 

Studies (IEFLS) programs to continue support for programs designed to meet the Nation's 

security and economic needs through the development of national capacity in foreign languages 

and area and international studies. The increased complexity of the post-Cold War world and 

the events of the September 11, 2001 terrorist attacks on the United States underscore the 

importance of maintaining and expanding American international expertise in world areas, 

economies, and foreign languages. 

The request includes $802.5 million for the Federal TRIO Programs and $285 million for Gaining 

Early Awareness and Readiness for Undergraduate Programs (GEAR UP) to provide 

educational outreach and support services that will help more than 2.2 million disadvantaged 

students to enter and complete college. The budget also would provide $82 million for meritand need-based scholarships and fellowships to postsecondary students under the Byrd Honors 

Scholarships, Javits Fellowships, and Graduate Assistance in Areas of National Need (GAANN) 

programs. 

Finally, a $39.1 million request for the Fund for the Improvement of Postsecondary Education 

(FIPSE) would support a wide-range of projects to reform and improve postsecondary 

education, while $90 million for Teacher Quality Enhancement would continue support for 

projects to reform and improve teacher preparation programs and certification requirements. 
-53- 

Title III: Aid for Institutional Development

(BA in millions) 

 2003 2004 

 2002 Request Request

Strengthening Institutions (Part A) ............... $73.6 $76.3 $76.3 

Strengthening Tribally Controlled Colleges 

 and Universities (Part A) ........................ 17.5 18.1 19.0 

Strengthening Alaska Native and Native 

 Hawaiian-serving Institutions (Part A) .... 6.5 6.7 4.0 

Strengthening Historically Black Colleges 

 and Universities (Part B) ........................ 206.0 213.4 224.1 

Strengthening Historically Black 

 Graduate Institutions (Part B)................. 49.0 50.8 53.3 

Minority Science and Engineering 

 Improvement (Part E) ............................. 8.5 8.5 8.5

 Total.................................................. 361.1 373.8 385.2 

The 2004 request for Title III demonstrates the Administration’s strong commitment to ensuring 

access to high quality postsecondary education for the Nation’s minority and disadvantaged 

students. Title III funding would help provide equal educational opportunity and strong 

academic programs for such students and help achieve greater financial stability for the 

institutions that serve these students. 

 

Developing Hispanic-serving Institutions

 2003 2004 

 2002 Request Request

BA in millions................................................ $86.0 $89.1 $93.6 

The 2004 request would expand and enhance the academic quality, institutional management, 

fiscal stability, and self-sufficiency of the colleges and universities that enroll large percentages 

of Hispanic students. Hispanic Americans are the largest ethnic group in the United States, yet 

continue to lag behind their non-Hispanic peers in overall educational achievement. This 

request demonstrates the Administration’s commitment to ensuring that Hispanic students have 

access to high quality postsecondary education and to closing the gaps between Hispanic and 

majority students in academic achievement, high school graduation, postsecondary enrollment, 

and life-long learning. 
-54- 

International Education and Foreign Language Studies

(BA in millions) 

 2003 2004 

 2002 Request Request

Domestic programs ...................................... $85.2 $88.0 $88.0 

Overseas programs...................................... 11.8 13.0 13.0 

Institute for International Public Policy ......... 1.5 1.5 1.5

 Total.................................................. 98.5 102.5 102.5 

The 14 International Education and Foreign Language Studies programs strengthen the 

American education system in the area of foreign languages and international studies. These 

programs support comprehensive language and area study centers within the United States, 

research and curriculum development, opportunities for American scholars to study abroad, and 

activities to increase the number of underrepresented minorities in international service. In 

addition to promoting general understanding of the peoples of other countries, the Department’s 

international programs also serve important economic, diplomatic, defense, and other security 

interests of the United States. 

Fund for the Improvement of Postsecondary Education (FIPSE)

 2003 2004 

 2002 Request Request

BA in millions................................................ $180.9 $39.1 $39.1 

FIPSE supports exemplary, locally developed projects that are models for innovative reform and 

improvement in postsecondary education. The 2004 request would fund 163 new and 

continuing projects under the Comprehensive Program in a variety of priority areas. 

Additionally, the request would continue support for the international consortia programs and 27 

projects previously funded under the Demonstration Projects to Ensure Quality Higher 

Education for Students with Disabilities program. The 2002 total included $149.7 million for 

one-time projects. 

Tribally Controlled Postsecondary Vocational and Technical Institutions

 2003 2004 

 2002 Request Request

BA in millions................................................ $6.5 $6.5 $6.5 

This program supports competitive grants to institutions that provide postsecondary vocational 

and technical education to Native American students. 
-55- 

Federal TRIO Programs

(BA in millions) 

 2003 2004 

 2002 Request Request

Student Support Services............................. $262.81

 $259.0 $259.0 

Upward Bound.............................................. 264.2 268.4 268.4 

Upward Bound Math/Science....................... 31.8 31.8 31.8 

Talent Search............................................... 143.51

 142.3 142.3 

Educational Opportunity Centers ................. 48.01

 47.4 47.4 

McNair Postbaccalaureate Achievement ..... 38.41

 36.8 36.8 

Staff Training................................................ 6.8 6.8 6.8 

Dissemination Partnership Projects ............. 3.4 5.5 5.5 

Evaluation..................................................... 0.8 1.7 1.5 

Administration/Peer Review ......................... 2.8 2.8 3.0

 

 Total.................................................. 802.5 802.5 802.5 

1 Includes funding for technology supplements.

The Federal TRIO Programs fund postsecondary education outreach and student support 

services for disadvantaged individuals to help them enter and complete postsecondary 

education programs. The 2004 request would support a new competition in the Staff Training 

program and maintain current service levels in the other programs. Over the last few years, 

significant investments have been made to increase the intensity of services and the number of 

projects in the Talent Search, Educational Opportunity Centers, Student Support Services, 

Upward Bound, and Upward Bound Math/Science programs. The request would maintain these 

and other investments to improve program effectiveness, including targeting higher-risk 

students and providing work-study opportunities through Upward Bound and providing grant aid 

to the most needy Student Support Services participants. The combined TRIO programs would 

serve a total of 872,000 disadvantaged students. 

Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP)

(BA in millions) 

 2003 2004 

 2002 Request Request

State Grants ................................................. $91.0 $91.4 $91.4 

Partnership Grants ....................................... 192.3 192.4 192.4 

21st Century Scholar Certificates................. 0.1 0.2 0.2 

Evaluation..................................................... 1.6 1.0 1.0 

 

 Total.................................................. 285.0 285.0 285.0 

GEAR UP provides mentoring, tutoring, academic and career counseling, and college 

scholarships to low-income elementary and secondary school students to give them the skills 

and encouragement they need to successfully pursue postsecondary education. The 

2004 request would maintain support for all continuing projects including a 6th and final year for 

projects first funded in 1999. GEAR UP’s unique cohort approach, partnerships, and matching 

requirements complement the Federal TRIO programs and merit a continued investment until 
-56- 

information on program effectiveness is available. GEAR UP projects would serve a total of 

1.4 million low-income students at the 2004 request level. 

Scholarships and Fellowships

(BA in millions) 

 2003 2004 

 2002 Request Request

Byrd Honors Scholarships............................ $41.0 $41.0 $41.0 

Javits Fellowships ....................................... 10.0 10.0 10.0 

Graduate Assistance in Areas 

 of National Need (GAANN) .................... 31.0 31.0 31.0 

Byrd Honors Scholarships provide merit-based support in the amount of $1,500, through 

formula grants to States, to undergraduate students who demonstrate outstanding academic 

achievement. The 2004 request would provide awards for 27,334 scholars, including 6,548 new 

scholars. 

Javits Fellowships provide up to 4 years of support to students of superior ability and high 

financial need who are pursuing doctoral degrees, or the highest terminal degree, in the arts, 

humanities, and social sciences. The 2004 request would support 271 fellowships in academic 

year 2005-2006, including 60 new fellows. 

 

GAANN provides fellowships, through grants to postsecondary institutions, to graduate students 

with superior ability and financial need studying in areas of national need. Participating 

graduate schools must provide assurances that they will seek talented students from 

traditionally underrepresented backgrounds. The 2004 request would support 845 fellowships, 

including 336 new fellowships. 

Child Care Access Means Parents in School

 2003 2004 

 2002 Request Request

BA in millions................................................ $22.0 $15.0 $15.0 

This program supports the participation of low-income parents in the postsecondary education 

system by providing campus-based childcare services. Grants made to institutions of higher 

education must be used to supplement childcare services or start a new program, not to 

supplant funds for current childcare services. The program gives priority to institutions that 

leverage local or institutional resources and employ a sliding fee scale. Funds would be used 

for the continuation of grants first funded in fiscal years 2001 and 2002. No funds are requested 

for new awards.
-57- 

Teacher Quality Enhancement

 (BA in millions) 

 2003 2004 

 2002 Request Request

State Grants ................................................. $40.5 $32.6 $31.8 

Partnership Grants ....................................... 40.5 48.9 49.8 

Recruitment Grants ...................................... 8.9 8.4 8.3 

Peer Review................................................. 0.1 0.1 0.1

 

 Total.................................................. 90.0 90.0 90.0 

The Teacher Quality Enhancement program helps improve the recruitment, preparation, 

licensing, and support of new teachers. State Grants may be used to reform teacher licensing 

and certification requirements, hold institutions of higher education accountable for high-quality 

teacher preparation, expand alternative pathways to teaching, and increase support for new 

teachers. Partnership Grants support a wide range of reforms and improvements in teacher 

preparation programs. Recruitment Grants help reduce shortages of qualified teachers in highneed school districts through scholarships, support services, and recruitment efforts. The 2004 

request would allow the Department to maintain support for 53 existing State, Partnership, and 

Recruitment projects and would fund 24 new Partnership Grants. 

 

GPRA Data/HEA Program Evaluation

 2003 2004 

 2002 Request Request

BA in millions................................................ $1.0 $1.0 $1.0 

The 2004 request would allow the Department to continue program evaluations and data 

collections for measuring program performance. In particular, funds would continue support for 

the evaluation of the Teacher Quality Enhancement program and collecting data for the State 

teacher quality accountability reports required by Title II of the Higher Education Act. 

Academic Facilities

(BA in millions) 

 2003 2004 

 2002 Request Request

Interest Subsidy Grants................................ $5.0 $3.0 $2.0 

CHAFL Federal Administration..................... 0.8 0.8 0.8 

HBCU Capital Financing Federal 

 Administration........................................ 0.2 0.2 0.2 

These programs support the construction, reconstruction, and renovation of academic facilities 

at institutions of higher education. Funding for Interest Subsidy Grants and CHAFL Federal 

Administration is used solely to manage and service existing portfolios of facilities loans and 

grants made in prior years. The request for HBCU Capital Financing Federal Administration 

would support management and servicing of both previously issued and new loans. 
-58- 

Howard University

(BA in millions) 

 2003 2004 

 2002 Request Request

Howard University Hospital .......................... $30.4 $30.4 $30.4 

General Support........................................... 207.1 207.1 207.1

 Total.................................................. 237.5 237.5 237.5 

The 2004 request would maintain support for Howard University’s academic programs, research 

programs, endowment program, construction activities, and the Howard University Hospital. 

The request reflects continued support for maintaining and improving the quality and financial 

strength of an institution that has played a continuing role in providing access to postsecondary 

educational opportunities for African Americans. 

National Security Education Trust Fund

 2003 2004 

 2002 Request Request

BA in millions................................................ — — $8.0 

The 2004 request proposes to transfer the National Security Education Trust Fund from the 

Department of Defense to the Department of Education. The National Security Education Act of 

1991 established the National Security Education Program (NSEP) for undergraduate 

scholarships, graduate fellowships, and grants to educational institutions in critical area studies, 

foreign languages, and other international fields. This program enhances the quality of U.S. 

educational programs in these fields by making it possible for more American students to study 

abroad, and will develop a larger pool of potential U.S. Government employees with knowledge 

of particular cultures, languages, and governments. All expenditures for the NSEP are derived 

from the National Security Education Trust Fund created by a one-time appropriation in 1991. 
-59- 

F. INSTITUTE OF EDUCATION SCIENCES

Overview 

The Education Sciences Reform Act of 2002 reauthorized the Department’s educational 

research, statistics, and assessment activities and placed them in the newly created Institute of 

Education Sciences (IES). The Administration firmly believes that in order to improve student 

achievement, the government must invest in research that can identify effective instructional 

and program practices, as well as in data collection needed to track student achievement and 

measure educational reform. The new structural and management reforms underway at the 

Institute ensure that the Federal investment in education research is well-managed and relevant 

to the needs of educators and policymakers. 

For 2004, the Administration is seeking $375.9 million for Education Research, Statistics, and 

Assessment. This request would support new programs of research, development, and 

dissemination in areas where our knowledge of learning and instruction is inadequate. The 

request also would maintain the Administration’s commitment to supporting high quality 

statistics and assessment programs. 

Research, Development, and Dissemination

 2003 2004 

 2002 Request Request

BA in millions................................................ $121.8 $175.0 $185.0 

 

The budget would provide $185 million for education research, development, and dissemination 

sponsored by the Institute, including research designed to address gaps in our scientific 

knowledge on how to increase teacher quality, how schools can reduce behavior problems and 

help children develop character, and how to teach reading and mathematics more effectively. 

Research in these areas is critical to the successful implementation of the No Child Left Behind 

Act. Other important research programs will help educators identify the most effective 

preschool curricula for getting children ready for school, and for helping children whose first 

language is not English develop English-language skills. 

The Institute is also funding research to bridge the gap between scientific research on the brain 

and teaching and learning in classroom settings. Other research projects will identify conditions 

that foster the use of research findings by teachers, school administrators, and policymakers 

and an interagency initiative to fund large-scale implementations of promising educational 

practices and technologies. The request also continues support for the national research and 

development centers, field-initiated research, and Small Business Innovation Research grants. 

Our request for dissemination includes funds to expand the What Works Clearinghouse, which 

provides evidence-based information for policymakers, researchers, and educators on 

promising approaches and interventions. The request also continues support for the National 

Library of Education and the ERIC clearinghouses. 
-60- 

Statistics

 2003 2004 

 2002 Request Request

BA in millions................................................ $85.0 $95.0 $95.0 

The request includes $95 million for Statistics to support the collection, analysis, and 

dissemination of education-related statistics in response both to legislative requirements and to 

the particular needs of data providers, data users, and educational researchers. The 

Department’s statistics programs—administered by the Institute through the National Center for 

Education Statistics (NCES)—provide general statistics about trends in education, collect data 

to monitor reform and measure educational progress, and inform the Institute’s research 

agenda. The request also supports NCES efforts to meet the statistical needs of the future 

through new technologies, training, data development and analysis, and methodological studies 

that will enable more efficient data collection and produce information that is more useful for 

parents, teachers, administrators, and policymakers. 

Assessment

 2003 2004 

 2002 Request Request

BA in millions................................................. $111.6 $95.4 $95.9 

The request would fund the on-going National Assessment of Educational Progress (NAEP) and 

the National Assessment Governing Board. NAEP is the only nationally representative and 

continuing assessment of what American students know and can do, and has become a key 

measure of our Nation’s educational performance. NAEP measures and reports on the status 

and trends in student learning over time, on a subject-by-subject basis, and makes objective 

information on student performance available to policymakers, educators, parents, and others. 
-61- 

III. PROGRAMS PROPOSED FOR ELIMINATION 

The 2004 request continues the practice of the Bush Administration—also consistent with 

previous administrations over the past two decades—of proposing to eliminate or consolidate 

funding for programs that are have achieved their original purpose, that duplicate other 

programs, that may be carried out with flexible State formula grant funds, or that involve 

activities that are better or more appropriately supported through State, local, or private 

resources. In addition, the government-wide Program Assessment Rating Tool, or PART, helps 

target funding to Department of Education programs that generate positive results for students 

and that meet strong accountability standards. For 2004, PART findings were used to redirect 

funds from ineffective programs to more effective activities, as well as to identify reforms to help 

address program weaknesses. 

The following table shows the combined total of programs proposed for elimination in the 

President’s 2003 and 2004 budget requests. Termination of these 45 programs frees up more 

than $1.5 billion—based on amounts appropriated for fiscal year 2002—for reallocation to more 

effective, higher priority activities. Following the table is a brief summary of each program and 

the rationale for its elimination. 

Program Terminations 

Program (BA in millions) 2002

Adult Education National Leadership Activities........................................... $9.5 

Advanced Credentialing .............................................................................. 10.0 

Alcohol Abuse Reduction ............................................................................ 25.0 

Arts in Education ......................................................................................... 30.0 

B.J. Stupak Olympic Scholarships .............................................................. 1.0 

Close Up Fellowships.................................................................................. 1.5 

Community Technology Centers................................................................. 32.5 

Comprehensive Regional Assistance Centers............................................ 28.0 

Comprehensive School Reform .................................................................. 235.0 

Demonstration Projects to Ensure Quality Higher Education 

 for Students with Disabilities ................................................................. 7.0 

Dropout Prevention Programs..................................................................... 10.0 

Eisenhower National Clearinghouse for Math and Science Education ....... 5.0 

Eisenhower Regional Math and Science Education Consortia ................... 15.0 

Elementary and Secondary School Counseling.......................................... 32.5 

Exchanges with Historic Whaling and Trading Partners ............................. 5.0 

Federal Perkins Loans: Capital Contributions............................................ 100.0 

Foreign Language Assistance..................................................................... 14.0 

Javits Gifted and Talented Education.......................................................... 11.3 

Leveraging Educational Assistance Partnerships ....................................... 67.0 

Literacy Programs for Prisoners.................................................................. 5.0 

Loan Forgiveness for Child Care Providers ................................................ 1.0 

Migrant and Seasonal Farmworkers ........................................................... 2.4 

National Writing Project............................................................................... 14.0 

Occupational and Employment Information ................................................ 9.5 

Parental Assistance Information Centers.................................................... 40.0 

Physical Education Program ....................................................................... 50.0 
-62- 

Program Terminations, continued (2002 BA in millions): 

Preparing Tomorrow’s Teachers to Use Technology .................................. $62.5 

Projects With Industry ................................................................................. 22.1 

Ready to Teach........................................................................................... 12.0 

Recreational Programs................................................................................ 2.6 

Regional Educational Laboratories ............................................................. 67.5 

Regional Technology in Education Consortia ............................................. 10.0 

Rural Education........................................................................................... 162.5 

School Leadership....................................................................................... 10.0 

Smaller Learning Communities ................................................................... 142.2 

Star Schools................................................................................................ 27.5 

State Grants for Community Service for Expelled or Suspended Students 50.0 

State Grants for Incarcerated Youth Offenders........................................... 17.0 

Supported Employment State Grants.......................................................... 38.2 

Tech-Prep Demonstration ........................................................................... 5.0 

Tech-Prep Education State Grants ............................................................. 108.0 

Thurgood Marshall Legal Educational Opportunity Program ...................... 4.0 

Underground Railroad Program .................................................................. 2.0 

Vocational Education National Programs.................................................... 12.0 

Women’s Educational Equity....................................................................... 3.0

 Total................................................................................................. $1,519.0 

Program Descriptions 

(figures reflect 2002 BA in millions) 

Adult Education National Leadership Activities........................................... $9.5 

These activities, including evaluation, dissemination and technical assistance, will be addressed as part of the 

Administration’s reauthorization strategy for adult basic and literacy education. 

Advanced Credentialing .............................................................................. $10.0 

Supports teachers seeking advanced certification or advanced credentialing, activities that receive ample funding 

through larger, more flexible programs such as Improving Teacher Quality State Grants. 

Alcohol Abuse Reduction ............................................................................ $25.0 

Supports innovative and effective programs to reduce alcohol abuse in secondary schools that may be funded 

through flexible Safe and Drug-Free Schools State Grants and State Grants for Innovative Programs. 

Arts in Education ......................................................................................... $30.0 

Makes non-competitive awards to Very Special Arts and the John F. Kennedy Center for the Performing Arts as well 

as competitive awards for national demonstrations and Federal leadership activities to encourage the integration of 

the arts into the school curriculum. Consistent with Administration policy of terminating small categorical programs 

with limited impact in order to fund higher priorities. 
-63- 

Program Eliminations, continued (2002 BA in millions): 

B.J. Stupak Olympic Scholarships .............................................................. $1.0 

Provides financial assistance to athletes who are training at the United States Olympic Education Center or one of the 

United States Olympic Training centers and who are pursuing a postsecondary education. Athletes can receive 

grant, work-study, and loan assistance through the Department’s postsecondary student aid programs. 

Close Up Fellowships.................................................................................. $1.5 

Non-competitive award to Close Up Foundation supports fellowships to low-income students and teachers 

participating in Close Up visits to Washington, DC and other activities. Peer organizations provide scholarships to 

some of their participants without Federal assistance 

Community Technology Centers................................................................. $32.5 

Supports centers that offer disadvantaged residents of economically distressed areas access to computers and 

training. Program has limited impact and funding for similar activities is available through other Federal agencies. 

Comprehensive Regional Assistance Centers............................................ $28.0 

Supports 15 university-based or nonprofit centers that offer technical assistance to States, school districts, and 

schools. The NCLB Act provides flexible funding to pay for such assistance. 

Comprehensive School Reform .................................................................. $235.0 

This program largely duplicates activities that are readily carried out under the Title I Grants to LEAs program. For 

example, the NCLB Act lowered the poverty threshold for Title I schoolwide projects to 40 percent, thus permitting 

some 5,000 additional schools to use Title I funds to carry out the types of whole-school reforms supported by the 

CSR program. More than 26,000 Title I schools already operate schoolwide projects and thus enjoy the opportunity 

to conduct comprehensive reform efforts. In addition, comprehensive reform is encouraged as part of school 

improvement efforts undertaken by Title I schools not making adequate yearly progress toward State standards for at 

least 2 consecutive years. 

Demonstration Projects to Ensure Quality Higher Education 

 for Students with Disabilities ................................................................. $7.0 

Funds technical assistance and professional development activities for faculty and administrators in institutions of 

higher education in order to improve the quality of education for students with disabilities. Such activities can be 

funded under FIPSE and the Research and Innovation program in the Special Education account. 

Dropout Prevention Programs..................................................................... $10.0 

Significantly higher funding for dropout prevention and re-entry programs available through Title I Grants to LEAs, 

Title I Migrant State Grants, and State Grants for Innovative Programs Competitive makes this program unnecessary. 

Eisenhower National Clearinghouse for Math and Science Education ....... $5.0 

Clearinghouse of K-12 mathematics and science resources is no longer needed now that the What Works 

Clearinghouse will provide such information for all grades and subject areas. 

Eisenhower Regional Math and Science Education Consortia ................... $15.0 

Disseminates exemplary mathematics and science education instructional materials and provides technical 

assistance in the use of improved teaching methods and assessment for use in grades K-12. The NCLB Act provides 

flexible funding to States, districts, and schools to pay for such assistance. 
-64- 

Program Eliminations, continued (2002 BA in millions): 

Elementary and Secondary School Counseling.......................................... $32.5 

Program of grants to support elementary school and secondary school counseling programs has limited impact and 

may be funded through other larger and more flexible Federal programs, such as ESEA Title V-A State Grants for 

Innovative Programs. 

Exchanges with Historic Whaling and Trading Partners ............................. $5.0 

Supports culturally based educational activities, internships, apprenticeship programs and exchanges for Alaska 

Natives, Native Hawaiians, and children and families of Massachusetts. Consistent with Administration policy of 

terminating small categorical programs with limited impact in order to fund higher priorities.

Federal Perkins Loans: Capital Contributions............................................ $100.0 

Institutional revolving funds totaling $7 billion will continue to support more than $1 billion in new Perkins Loans each 

year without additional capital contributions. In addition, affordable postsecondary student loan assistance is readily 

available through the Federal Family Education Loan and Ford Direct Student Loan programs. 

Foreign Language Assistance..................................................................... $14.0 

Activities to promote improvement and expansion of foreign language instruction may be supported by larger, more 

flexible ESEA programs, such as Improving Teacher Quality State Grants and State Grants for Innovative Programs.

Javits Gifted and Talented Education.......................................................... $11.3 

Activities to help schools to meet the special educational needs of gifted and talented students may be supported 

through other larger and more flexible Federal programs, such as Title V-A State Grants for Innovative Programs. 

Leveraging Educational Assistance Partnerships ....................................... $67.0 

Program has accomplished its objective of stimulating all States to establish need-based postsecondary student grant 

programs, and Federal incentives for such aid are no longer required. State grant levels have expanded greatly over 

the years, and most States significantly exceed the statutory matching requirements. State matching funds in 

academic year 1999-2000, for example, totaled nearly $1 billion or more than $950 million over the level generated 

by a dollar-for-dollar match. 

Literacy Programs for Prisoners.................................................................. $5.0 

Competitive grants to State and local correctional agencies and correctional education agencies support programs 

that reduce recidivism through the improvement of "life skills." Request is consistent with the Administration’s effort 

to eliminate small programs that have only indirect or limited effect on improving student outcomes. 

Loan Forgiveness for Child Care Providers ................................................ $1.0 

This demonstration program encourages qualified child care providers to work in low-income communities by 

forgiving a portion of their FFEL or Direct Loan obligation. The program is too small to have a significant impact and 

is administratively burdensome. 

 

Migrant and Seasonal Farmworkers ........................................................... $2.4 

Supports rehabilitation services to migratory workers with disabilities, but such activities may be funded through the 

VR State Grants program. 
-65- 

Program Eliminations, continued (2002 BA in millions): 

National Writing Project............................................................................... $14.0 

Supports a nationwide nonprofit educational organization that promotes K-16 teacher training programs in the 

effective teaching of writing. States may support such activities through flexible programs like Improving Teacher 

Quality State Grants. 

Occupational and Employment Information ................................................ $9.5 

Support for State career guidance and academic counseling programs for youth and adults will be addressed as part 

of the Administration’s reauthorization strategy for career and technical education. 

Parental Assistance Information Centers.................................................... $40.0 

Parent education and family involvement programs are required and funded under other ESEA programs, such as 

Title I Grants to Local Educational Agencies, and are a specifically authorized use of funds under ESEA Title V-A 

State Grants for Innovative Programs. 

Physical Education Program ....................................................................... $50.0 

Grants are used primarily to purchase equipment for physical education programs—an activity more appropriately 

funded through State, local, or private resources. 

 

Preparing Tomorrow’s Teachers to Use Technology .................................. $62.5 

State and local entities may use Educational Technology State Grants and Improving Teacher Quality State Grants to 

carry out activities supported under this program, which prepares prospective teachers to use technology to improve 

student achievement and instructional programs. 

Projects With Industry ................................................................................. $22.1 

PWI projects help individuals with disabilities obtain employment and advance their careers in the competitive labor 

market. VR State Grants serves the same target populations and may be used to support PWI projects. 

Ready to Teach........................................................................................... $12.0 

This program supports competitive grants to nonprofit telecommunications entities to carry out programs to improve 

teaching in core curriculum areas, and to develop, produce, and distribute innovative educational and instructional 

video programming. Educational Technology State grants and Improving Teacher Quality State grants provide ample 

resources for the types of activities supported by this program. 

Recreational Programs................................................................................ $2.6 

Supports projects that provide recreation and related activities for individuals with disabilities to aid in their 

employment, mobility, independence, socialization, and community integration. The program has limited impact, and 

such activities are more appropriately financed by State and local agencies and the private sector. 

Regional Educational Laboratories ............................................................. $67.5 

Recent reauthorization did not make needed improvement in structure and function of the Regional Educational 

Laboratories, which have not consistently provided high quality research and development products or evidencebased training and technical assistance. 

 
-66- 

Program Eliminations, continued (2002 BA in millions): 

Regional Technology in Education Consortia ............................................. $10.0 

Supports technical assistance and professional development in the effective use of educational technology; States, 

districts, and schools can purchase such technical assistance through flexible funding sources authorized by the 

NCLB Act, such as the ESEA Title I Grants to LEAs program. 

Rural Education........................................................................................... $162.5 

Larger State formula grant programs provide ample resources for a wide range of activities designed to improve 

student achievement in rural areas. In addition, rural school districts may take advantage of new ESEA flexibility 

provisions to combine funding received from various State formula grant programs and use the consolidated funds for 

virtually any ESEA-authorized purpose. 

School Leadership....................................................................................... $10.0 

Program supports recruiting, training, and retaining principals and assistant principals—activities that are specifically 

authorized under other, much larger programs such as Improving Teacher Quality State Grants and State Grants for 

Innovative Programs. 

Smaller Learning Communities ................................................................... $142.2 

The creation or expansion of smaller learning communities in large high schools may be supported by Title I Grants 

to LEAs and State Grants for Innovative Programs—the latter of which specifically authorizes the creation of smaller 

learning communities. 

Star Schools................................................................................................ $27.5 

Programs like Educational Technology State grants and Improving Teacher Quality State grants provide ample 

resources for the distance education projects supported by Star Schools. 

State Grants for Community Service for Expelled or Suspended Students $50.0 

Community service programs for expelled or suspended from school may be supported through other, larger ESEA 

programs such as Safe and Drug-Free Schools State Grants and State Grants for Innovative Programs. 

State Grants for Incarcerated Youth Offenders........................................... $17.0 

Formula grants to State correctional agencies assist and encourage incarcerated youth to acquire functional literacy 

skills and life and job skills. Request is consistent with the Administration’s effort to eliminate small programs that 

have only indirect or limited effect on improving student outcomes. 

Supported Employment State Grants.......................................................... $38.2 

Program has accomplished its goal of developing collaborative programs with appropriate public and private nonprofit 

organizations to provide supported employment services for individuals with the most significant disabilities. Similar 

activities may be supported with VR State Grants. 

Tech-Prep Demonstration ........................................................................... $5.0 

A demonstration program to support consortia that establish secondary technical education program on community 

college campuses would no longer be necessary under the Administration’s reauthorization strategy for career and 

technical education. 
-67- 

Program Eliminations, continued (2002 BA in millions): 

Tech-Prep Education State Grants ............................................................. $108.0 

A State grant program to support State efforts to develop structural links between secondary and postsecondary 

institutions that integrate academic and vocational education would no longer be necessary under the 

Administration’s reauthorization strategy for career and technical education. 

Thurgood Marshall Legal Educational Opportunity Program ...................... $4.0 

This program, which provides minority, low-income, or disadvantaged college students with the information, 

preparation, and financial assistance needed to gain access to and complete law school, largely duplicates 

assistance available through the Department's postsecondary student financial aid programs. 

Underground Railroad Program .................................................................. $2.0 

Provides grants to non-profit educational organizations to establish facilities that house, display, and interpret artifacts 

relating to the history of the Underground Railroad, as well as to make the interpretive efforts available to institutions 

of higher education. The program has largely achieved its original purpose. 

Vocational Education National Programs.................................................... $12.0 

These activities, including assessment, evaluation, dissemination, and technical assistances, will be addressed as 

part of the Administration’s reauthorization strategy for career and technical education. 

Women’s Educational Equity....................................................................... $3.0 

Activities promoting educational equity for girls and women may be supported through larger, more flexible programs 

like ESEA Title V-A State Grants for Innovative Programs. 
-68- 

IV. DEPARTMENTAL MANAGEMENT 

 2003 2004 

 2002 Request Request

Discretionary funds

(BA in millions) 

Program Administration ................................. $365.51

 $411.8 $434.5 

Office for Civil Rights....................................... 79.7 86.3 91.3 

Office of the Inspector General ....................... 38.6 41.0 48.1 

Student Aid Administration............................... 105.8 2 737.03

 752.0 3 

Other4 .............................................................. 14.0 13.1 16.1

 Total, Discretionary S&E................... 603.6 1,289.2 1,342.0 

Mandatory funds

(BA in millions) 

Student Loan Administration: 

HEA Section 4585 ............................................ 600.05

 — —

 

Total Federal Administration ............................ 1,203.6 1,289.2 1,342.0 

Full-time equivalent employment (FTE) 6 

Program Administration................................... 2,3427 2,462 2,462 

Office for Civil Rights....................................... 698 714 714 

Office of the Inspector General ....................... 276 285 285 

Student Aid Administration............................... 1,188 8

 1,115 1,115 

Other4 ....................................................... 37 44 49

 Total .............................................. 4,541 4,620 4,625 

1 Adjusted for comparability. Excludes $57.001 million in 2002 used to administer student aid programs, 

which are consolidated with FFEL and FDSL Federal administration costs and requested in fiscal years 2003 and 

2004 under the proposed Student Aid Administration account. 

2 Adjusted for comparability. Includes funds from the Program Administration and FFEL accounts used to 

administer student aid programs, which are consolidated with the FDSL Federal Administration costs and requested 

in fiscal years 2003 and 2004 under the proposed Student Aid Administration account. 

3 Excludes $195 million for payments to guaranty agencies. 

4 Includes small Federal Credit accounts and S&E activities in program accounts. Excludes Occupational 

and Employment Information grants and National Education Security Trust Funds grants, scholarships, and 

fellowships. 

5

 Excludes $180 million in 2002 for payments to guaranty agencies. 

6 Actual FTE usage in 2002; maximum target for 2002 and 2003.

7 Adjusted for comparability. Excludes FTE to administer student aid programs, which are consolidated with 

FFEL and FDSL Federal administration FTE requested in fiscal year 2003 and 2004 under the proposed Student Aid 

Administration account. 

8 Adjusted for comparability. Includes FTE to administer student aid programs, which are consolidated with 

FFEL and FDSL Federal administration and Program Administration FTE requested in fiscal year 2003 under the 

proposed Student Aid Administration account.
-69- 

Departm ent of Education 

FY 2004 Salaries and Expenses Costs by Category

Personnel Costs

34%

Other

Non-Personnel

9%

Contracts

49%

Overhead 

(Rent & M ail)

8%

Overview 

The 2004 budget request for Salaries and Expenses (S&E) will pay the costs of the staff, 

overhead, contracts, and other activities needed to administer and monitor the Department’s 

educational assistance programs and provide over $80 billion in grants and loans each year to 

more than 8 million postsecondary students. 

The Department is requesting $1.34 billion for its discretionary S&E budget in 2004, an increase 

of $53 million over the 2003 President’s request. Included in the request is $459 million for 

salaries and benefits, which reflects the 2 percent proposed government-wide pay raise and 261 

paid days in 2004, and historically based increases for employee benefits. 

The non-personnel costs for the administrative accounts cover such items as travel, rent, mail, 

telephones, utilities, printing, information technology (IT), contractual services, equipment, 

supplies, and other Departmental services. The total request for non-personnel activities in 

2004 is $883 million. 

Department administrative costs continue to constitute a small fraction of the total education 

budget. For example, even with the increase requested for 2004, the discretionary 

administrative budget would be approximately 2 percent of the Department’s total discretionary 

budget. 

The 2004 budget request for salaries and expenses supports Department initiatives designed to 

improve government performance through the goals outlined in the President’s Management 

Agenda and the implementation of the No Child Left Behind Act signed into law in January 

2002. 

To carry out the President’s Management Agenda, the Department has developed and is 

currently implementing its Blueprint for Management Excellence (Blueprint), which establishes a 
-70- 

roadmap for management improvements related to accountability and performance that will 

make the Department an example of excellence for other government organizations. The 2004 

S&E budget request places a heavy emphasis on the following five high priority items included 

in the Blueprint: 

• Developing and maintaining financial integrity and management and internal controls; 

• Modernizing the student financial assistance programs and reducing their high-risk status; 

• Expanding strategies for using human capital; 

 

• Building a culture of accountability within the Department, including performance-based 

budgeting; and 

• Managing Information technology systems to improve business and communications 

processes. 

Department Employment 

 

D EPAR T M EN T O F ED U C AT IO N

FTE Usage/Ceiling

4 ,8 7 7

4 ,5 9 6

4 ,8 1 6

4 ,5 9 3 4 ,5 4 1 4 ,6 2 0 4 ,6 2 5 4 ,5 6 6

7 ,5 2 8

0

1000

2000

3000

4000

5000

6000

7000

8000

1980

1985

1990

1995

2000

2001

2002

2003

2004

F is c a l Ye a r

Full-T ime

 E quiv ale nt

 (FT E)

The 2004 staffing request of 4,625 FTE is nearly 40 percent below the level of 7,528 FTE when 

the Department was created in 1980. The staffing request represents no significant change 

from the planned 2003 level, although internal staff reorganizations have been implemented to 

improve the management of the Department and to carry out the President’s education reform 

agenda. 

The budget request reflects the creation of two new offices in 2003. The Office of Innovation 

and Improvement will provide information on the development of promising educational 

interventions, including reforms that expand parental choice and information. It will oversee 

competitive grant programs that support the trial of innovations in the education system and will 

broadly disseminate the lessons learned from these trials. The Office of Safe and Drug-Free 
-71- 

Schools is responsible for programs and policies relating to security and prevention of violence, 

alcohol and drug abuse, and for administering citizenship and civics education programs. It will 

administer a variety of grant programs dealing with these issues. 

The Department has maintained operations in spite of reduced staffing levels in part by relying 

heavily on automation and private contractors to handle such functions as awarding grants, 

processing student aid applications, and providing grants and loans to more than 8 million 

college students. Already the smallest of the Cabinet agencies, the Department minimizes 

administrative tasks and privatizes functions that can be handled more efficiently by outside 

contractors. A prime illustration is the use of contracts to operate the Direct Student Loan 

program. 

As shown in the following chart, staff is divided among the Washington, D.C. headquarters, 10 

regional offices, and 11 field offices. Approximately 72 percent of the employees are assigned 

to headquarters, and 28 percent are assigned to the regional and field offices. Most regional 

and field office employees are in the Federal Student Aid office, the Office of the Inspector 

General, and the Office for Civil Rights. Activities include review of lenders, institutions, and 

guaranty agencies participating in the student financial aid programs, as well as collections on 

defaulted student loans; audits and investigations of Department programs and operations; and 

civil rights complaint investigations and compliance reviews. 

 

Boston

New York City

Philadelphia

Washington, D.C.

Regional Offices

Field Offices

Location of the Department of Education 

Regional and Field Offices

Seattle

San

Francisco Denver Kansas

City

Chicago

Atlanta

Dallas

Cleveland

NOTE: Approximately 28 percent of the Department's staff are located in the regions.

Sacramento

Long Beach

Austin

Puerto Rico Plantation

Nashville

Pittsburgh

St. Paul
-72- 

Program Administration 

The 2004 request includes $434.5 million, an increase of $22.7 million from the 2003 

President’s request, for the Program Administration account, which funds administrative support 

for most programs and offices in the Department. The request includes $252.3 million for the 

2,462 FTE requested, and $182.2 million for non-pay costs. The non-pay request includes 

$13.6 million to relocate approximately 1,300 people and the Department’s Data Center located 

in Washington, D.C. between office buildings and $10 million to continue implementation of the 

Performance Based Data Management Initiative, which will collect timely data on student 

achievement and educational outcomes. Other non-pay costs include rent, travel, data 

collection, evaluations, computer hardware and software support for the staff, and other 

administrative activities. 

Student Aid Administration 

In fiscal year 2004 the Department of Education will provide over $80 billion in Federal student 

aid grants and loans to over 8 million students and parents. In awarding this aid, the 

Department and its contractors will interact on a daily basis with over 6,000 schools; 3,500 

lenders; 36 guaranty agencies; and dozens of accrediting agencies, participants in the 

secondary market for student loans, and other organizations. Ensuring the smooth operation of 

the complex array of financial transactions involving these numerous participants in the student 

financial aid programs—and safeguarding the interests of both students and Federal 

taxpayers—is perennially the Department's greatest management challenge and its highest 

administrative priority. Primary responsibility for administering the Federal student financial 

assistance programs rests with the Office of Federal Student Aid and the Office of 

Postsecondary Education. 

Funding for student aid management has been provided in previous years through 3 separate 

accounts: the discretionary Program Administration and Federal Family Education Loan 

Program (FFEL) accounts and the mandatory Federal Direct Student Loan Program (HEA 

Section 458). For 2004, the Administration is proposing a continuation of the policy first 

proposed in 2003 to consolidate these separate funding streams into a new discretionary 

Student Aid Administration account that would represent more than 55 percent of the 

Department’s total administrative budget. The request would provide $752 million to administer 

student aid programs in 2004, an increase of $15 million over the 2003 President’s request. 

Management Improvement and Government Reform 

To carry out the President’s Management Agenda, the Department has developed and is 

currently implementing its Blueprint for Management Excellence, which establishes a roadmap 

for management improvements and mechanisms related to accountability and performance that 

will make the Department an example of excellence for other government organizations. The 

Salaries and Expenses (S&E) budget request places a heavy emphasis on the following five 

high priority items included in the Blueprint. 
-73- 

• Minimize defaults and improve 

collections. 

• Integrate student financial aid 

information systems. 

• Reduce vulnerability to fraud, 

waste, error, and mismanagement.

• Clean audit opinion. 

• Provide program managers with 

financial data needed to manage 

effectively. 

• Earn Certificate of Excellence for 

Accountability Reporting. 

• Substantially reduce external and internal 

accountability risks. 

• Assess the performance of programs and 

determine the actions to take to improve 

performance where indicated.

• Meet or exceed OMB goals for competitive 

outsourcing. 

• Give managers tools and flexibility to hire 

top-notch talent. 

• Ensure that employees have the skills to do 

their jobs. 

Improving Financial Integrity/Management and Internal Controls 

Financial integrity 

Financial integrity requires accurate and relevant 

financial reporting systems and processes in order to 

provide policy makers and managers with timely and 

accurate financial information. In addition, revenues 

and expenditures must be properly accounted for and 

reported on so that that reports and data produced by 

financial management systems will provide reliable 

information to managers making program and assetrelated decisions. 

Management and internal controls 

Management and internal controls will be adopted and enhanced to reduce the risk of errors 

and permit effective monitoring of programs 

and processes. Management controls will 

ensure that programs achieve their intended 

results and are protected from waste, 

fraud, and mismanagement. Internal 

controls will help ensure effective and 

efficient Department operations as well 

as reliable financial reporting. 

Modernizing and Reducing the High-Risk Status of Student Aid Programs 

The Department will improve its financial and 

management information systems to support the 

effective management of the student aid programs, 

following specific criteria provided by the General 

Accounting Office for reducing student aid risk and 

removing the programs from the high-risk list. 

These improvements will ensure that relevant, timely 

information is available to manage day-to-day 

operations and provide accountability. 

Expanding Strategies for Using Human Capital 

The Department’s human capital strategy will 

achieve the goals of the President’s 

Management Agenda by streamlining 

operations in order to bring work closer to its 

customers: taxpayers, States, school 

districts, and schools. This will be 

accomplished by increasing competitive 

sourcing and improving decision-making. 
-74- 

• Maximize online conduct of business 

with customers. 

• Perform procurement and program data 

reporting online. 

• ED programs and services will focus on 

results and meet Administration goals. 

• ED will set the standard for performance 

accountability among Federal agencies. 

• ED will be the national benchmark for 

management excellence. 

Managing Information Technology to Meet the Needs of ED Customers 

In order to meet the President’s Management 

Agenda goals of an expanded electronic 

government, the Department will improve the 

management of its IT investments, protect the 

integrity and confidentiality of data, improve 

data management, and increase the use of 

technology in serving customers. 

Achieving an “Accountability for Results” Culture 

The Department will place a heavy emphasis on monitoring results and measuring progress as 

it performs its mission. The recipients of Department funds, Department employees, and 

Department contractors will be held responsible for their performance in relation to achieving the 

goals and objectives of the Department. The Department will work with grantees and 

contractors to develop performance 

standards that will yield results called for 

in the long-range strategic plan. 

Internally, measurement of employee 

performance will be linked to how well 

goals are being met. 

The Performance Based Data 

Management Initiative is designed to 

develop a system for measuring student 

achievement by: 1) providing an 

integrated, Web-based collection of timely data on student achievement and educational 

outcomes; 2) eliminating existing reporting burdens that divert State and local school resources 

from their educational mission; and 3) assisting in analysis of data on educational results to 

identify performance trends and inform management, budget and policy decisions. 

Implementation of the system will help lay the groundwork for shifting the Department’s 

emphasis from focusing on compliance with procedural requirements to a focus on actual 

student achievement. In 2004, $10 million is requested for continuing the development of this 

project. 

Office for Civil Rights 

The Department’s Office for Civil Rights (OCR) investigates discrimination complaints, conducts 

compliance reviews, monitors corrective action plans, and provides technical assistance on civil 

rights issues. The 2004 request for OCR is $91.3 million, an increase of $5 million over the 

2003 President’s request. About $64.6 million of the OCR budget is for staff pay and benefits 

for its 714 FTE; the remaining $26.7 million covers overhead costs as well as computer 

equipment, data analysis and reporting activities, travel, staff training, and other contractual 

services. The request includes $1 million to increase enforcement of Title IX of the Education 

Amendments of 1972, and to provide education and technical assistance to help schools 

comply with Title IX. Title IX protects people from discrimination based on sex in education 

programs or activities that receive Federal financial assistance. 
-75- 

The requested funds will ensure essential program support to resolve complaints of 

discrimination filed by the public and to ensure that institutions receiving Federal financial 

assistance are in compliance with the civil rights laws enforced by OCR. The request also will 

provide resources for collaboration with educational experts so that the results of scientifically 

based research in the areas of education and civil rights are incorporated into OCR’s 

enforcement activities, and for technical assistance to recipients, parents and students to 

informally address civil rights concerns and to prevent problems from arising in the future. OCR 

provides extensive information on its Internet site, including self-assessment materials for 

recipients, data on school characteristics, brochures, and other information for the public. 

Office of the Inspector General 

The Office of the Inspector General (OIG) conducts audits and investigations of the 

Department’s programs and activities to help ensure accountability for taxpayer-provided funds 

and to identify management improvements. The 2004 request for the OIG is $48.1 million, an 

increase of $7.1 million over the 2003 President’s request. Approximately 61 percent of this 

amount, or $29.2 million, is for personnel compensation and benefits to support a staffing level 

of 285 FTE. 

The request includes $4.25 million to assess the quality of single audits government-wide, and 

to provide a baseline for monitoring single audit quality. The Department, and many other 

agencies, rely on these independent audits of grantees produced under the Single Audit Act. 

The study would statistically measure audit quality to determine whether Federal agencies can 

rely on single audits to support Federal program expenditures and identify erroneous payments. 

These are critical issues for the President’s Management Agenda. Results will be shared with 

the President’s Council on Integrity and Efficiency, which is composed of agency Inspectors 

General. Because the Department is one of the leading users of single audits, funds for this 

government-wide project are being requested in ED. 

Almost half of the remaining $18.9 million in non-personnel costs is for OIG’s administrative and 

overhead services, such as rent, postage/fees, telecommunications, payroll processing, and 

information technology services contracts. Two other non-personnel costs are travel and 

contracts. The OIG relies on contract support for review of information technology and to obtain 

an independent audit of the Department’s financial statements. 

The requested budgetary resources will allow the OIG to engage in the types of activities that 

will enable the Office to reach these goals and at the same time provide support to the 

Department in its mission to ensure equal access to education and promote educational 

excellence throughout the Nation. The office continues to focus the majority of its efforts and 

resources on Federal Student Aid. 
-76- 

APPENDICES 

Tables: 

• Total Expenditures for Education in the United States 

• Detailed Budget Table by Program 
 Total Expenditures for Education in U.S. 1 

 (dollars in billions) 

 2001-2002 2002-2003 2

 

Dollars Percent Dollars Percent

Source of Funds by Level 

 Elementary and Secondary 

 Federal 3

................................... $37.5 8.3% $39.7 8.4% 

 State......................................... 206.9 45.6 214.3 45.5 

 Local......................................... 168.0 37.0 175.0 37.2 

 All Other................................... 41.3 9.1 41.8 8.9 

 Subtotal, Elementary and 

 Secondary........................... 453.7 100.0 470.8 100.0 

 Postsecondary 

 Federal 3

................................... 35.1 12.1 36.1 12.1 

 State......................................... 66.8 22.9 67.8 22.7 

 Local......................................... 7.8 2.7 7.9 2.7 

 All Other 4

................................ 181.5 62.3 186.9 62.6 

 Subtotal, Postsecondary....... 291.1 100.0 298.7 100.0 

 All Levels 

 Federal 3

................................... 72.6 9.8 75.8 9.9 

 State......................................... 273.7 36.7 282.1 36.7 

 Local......................................... 175.7 23.6 182.9 23.8 

 All Other 4

................................. 222.8 29.9 228.7 29.7 

 Total, All Levels.................. 744.8 100.0 769.5 100.0 

 

Source: U.S. Department of Education, National Center for Education Statistics, "Common Core of Data" 

and "Financial Statistics of Institutions of Higher Education," surveys and unpublished data. (This table 

was prepared January 2003.) 

1

 Data revised from previously published figures. 

2

 Projected. 

3

 Includes expenditures of all Federal agencies. 

4

 Federally supported student aid that goes to higher education institutions through students' tuition 

payments is shown under "All Other" rather than "Federal." Such payments would add substantial 

amounts and several percentage points to the Federal share. 

NOTES: Data above may vary from data reported in other surveys of education funding. Differences can 

be accounted for primarily by differences among the reports in any of the following: measures of funding 

used, e.g., budget authority vs. expenditures; the definition of education used; agencies and institutions 

reporting the data; and basis of dollars reported, e.g., current vs. constant dollars. 

Because of rounding, detail does not add to totals.
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF ELEMENTARY AND SECONDARY EDUCATION (OESE)

Education for the Disadvantaged

1. Grants to local educational agencies (ESEA I-A):

(a) LEA grants formulas:

(1) Basic grants (section 1124)

Annual appropriation D 3,161,699 4,161,699 1 5,161,699 1 1,000,000 24.0%

Advance for succeeding fiscal year D 4,011,272 3,011,272 2,011,272 (1,000,000) -33.2%

Subtotal 7,172,971 7,172,971 7,172,971 0 0.0%

(2) Concentration grants (section 1124A)

Annual appropriation D 0 0 0 0 ---

Advance for succeeding fiscal year D 1,365,031 1,365,031 1,365,031 0 0.0%

Subtotal 1,365,031 1,365,031 1,365,031 0 0.0%

(3) Targeted grants (section 1125)

Annual appropriation D 0 0 0 0 ---

Advance for succeeding fiscal year D 1,018,499 2,018,499 3,018,499 1,000,000 49.5%

Subtotal 1,018,499 2,018,499 3,018,499 1,000,000 49.5%

(b) Education finance incentive grants formula (1125A)

Annual appropriation D 0 0 0 0 ---

Advance for succeeding fiscal year D 793,499 793,499 793,499 0 0.0%

Subtotal 793,499 793,499 793,499 0 0.0%

Subtotal, Grants to LEAs 10,350,000 11,350,000 12,350,000 1,000,000 8.8%

Annual appropriation D 3,161,699 4,161,699 5,161,699 1,000,000 24.0%

Advance for succeeding fiscal year D 7,188,301 7,188,301 7,188,301 0 0.0%

2. Reading first:

(a) Reading first State grants (ESEA I-B-1)

Annual appropriation D 705,000 805,000 855,000 50,000 6.2%

Advance for succeeding fiscal year D 195,000 195,000 195,000 0 0.0%

Subtotal 900,000 1,000,000 1,050,000 50,000 5.0%

(b) Early reading first (ESEA I-B-2) D 75,000 75,000 100,000 25,000 33.3%

Subtotal, Reading first 975,000 1,075,000 1,150,000 75,000 7.0%

1 Excludes $2,930 thousand requested for increased pension and annuitant health benefits costs for Bureau of Indian Affairs (BIA) employees who work in BIA schools

receiving ESEA Title I funds.

NOTE: Category Codes are as follows: D = discretionary program; M = mandatory program.

1
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Education for the Disadvantaged (continued)

3. Even start (ESEA I-B-3) D 250,000 200,000 175,000 (25,000) -12.5%

4. Literacy through school libraries (ESEA I-B-4) D 12,500 12,500 27,500 15,000 120.0%

5. State agency programs:

(a) Migrant (ESEA I-C) D 396,000 396,000 396,000 0 0.0%

(b) Neglected and delinquent (ESEA I-D) D 48,000 48,000 48,000 0 0.0%

Subtotal 444,000 444,000 444,000 0 0.0%

6. Comprehensive school reform (ESEA I-F) D 235,000 235,000 0 (235,000) -100.0%

7. Evaluation (ESEA sections 1501 and 1503) D 8,900 8,900 9,500 600 6.7%

8. Close Up fellowships (ESEA section 1504) D 1,500 0 0 0 ---

9. Dropout prevention program (ESEA I-H) D 10,000 0 0 0 ---

10. Migrant education (HEA IV-A-5):

(a) High school equivalency program D 23,000 23,000 13,000 (10,000) -43.5%

(b) College assistance migrant program D 15,000 15,000 15,000 0 0.0%

Subtotal 38,000 38,000 28,000 (10,000) -26.3%

Total, Appropriation D 12,324,900 1 13,363,400 1 14,184,000 820,600 6.1%

Total, Budget authority D 11,894,899 13,363,400 14,184,000 820,600 6.1%

Current 4,941,599 2 5,980,099 2 6,800,699 2 820,600 13.7%

Prior year's advance 6,953,300 7,383,301 7,383,301 0 0.0%

Outlays, Total D 9,247,725 11,905,635 13,201,615 1,295,980 10.9%

1 Adjusted for comparability. Excludes $22,000 thousand for Advanced Placement, which is requested in fiscal year 2004 under the proposed Innovation and Improvement account.

2 Excludes an advance appropriation of $7,383,301 thousand that becomes available on October 1 of the succeeding fiscal year.

2
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Impact Aid (ESEA VIII)

1. Payments for federally connected children (section 8003):

(a) Basic support payments (section 8003(b)) D 982,500 982,500 867,500 (115,000) -11.7%

(b) Payments for children with disabilities (section 8003(d)) D 50,000 50,000 40,000 (10,000) -20.0%

Subtotal 1,032,500 1,032,500 907,500 (125,000) -12.1%

2. Facilities maintenance (section 8008) D 8,000 8,000 8,000 0 0.0%

3. Construction (section 8007) D 48,000 45,000 45,000 0 0.0%

4. Payments for Federal property (section 8002) D 55,000 55,000 55,000 0 0.0%

Total D 1,143,500 1,140,500 1,015,500 (125,000) -11.0%

Outlays D 1,125,056 1,190,209 1,035,622 (154,587) -13.0%

3
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

School Improvement Programs

1. Improving teacher quality (ESEA II):

(a) Improving teacher quality State grants (Part A)

Annual appropriation D 1,700,000 1,700,000 1,700,000 0 0.0%

Advance for succeeding fiscal year D 1,150,000 1,150,000 1,150,000 0 0.0%

Subtotal 2,850,000 2,850,000 2,850,000 0 0.0%

(b) National activities (Part A, subpart 5):

(1) School leadership (section 2151(b)) D 10,000 0 0 0 ---

(2) Advanced credentialing (section 2151(c)) D 10,000 0 0 0 ---

(3) Early childhood educator professional development (section 2151(e)) D 15,000 15,000 15,000 0 0.0%

Subtotal 35,000 15,000 15,000 0 0.0%

(c) Mathematics and science partnerships (Part B) D 12,500 12,500 12,500 0 0.0%

(d) National writing project (Part C-2) D 14,000 0 0 0 ---

2. Educational technology State grants (ESEA II-D-1 and 2) D 700,500 700,500 700,500 0 0.0%

3. Preparing tomorrow's teachers to use technology (HEA II-B) D 62,500 0 0 0 ---

4. 21st Century community learning centers (ESEA IV-B) D 1,000,000 1,000,000 600,000 (400,000) -40.0%

5. State grants for innovative programs (ESEA V Part A)

Annual appropriation D 100,000 100,000 100,000 0 0.0%

Advance for succeeding fiscal year D 285,000 285,000 285,000 0 0.0%

Subtotal 385,000 385,000 385,000 0 0.0%

6. Elementary and secondary school counseling (ESEA V-D, subpart 2) D 32,500 0 0 0 ---

7. Smaller learning communities (ESEA V-D, subpart 4) D 142,189 0 0 0 ---

8. Javits gifted and talented education (ESEA V-D, subpart 6) D 11,250 0 0 0 ---

9. Star schools (ESEA V-D, subpart 7) D 27,520 0 0 0 ---

10. Ready to teach (ESEA V-D, subpart 8) D 12,000 0 0 0 ---

11. Foreign language assistance (ESEA V-D, subpart 9) D 14,000 0 0 0 ---

12. Physical education program (ESEA V-D, subpart 10) D 50,000 0 0 0 ---

13. Community technology centers (ESEA V-D, subpart 11) D 32,475 0 0 0 ---

14. Exchanges with historic whaling and trading partners (ESEA V-D, subpart 12) D 5,000 0 0 0 ---

15. Arts in education (ESEA V-D, subpart 15) D 30,000 0 0 0 ---

16. Parental assistance information centers (ESEA V-D, subpart 16) D 40,000 0 0 0 ---

17. Women's educational equity (ESEA V-D, subpart 21) D 3,000 0 0 0 ---

18. State grants for community service for expelled or suspended students

(ESEA IV-A-2, section 4126) D 50,000 0 0 0 ---

19. Alcohol abuse reduction (ESEA IV-A-2, section 4129) D 25,000 0 0 0 ---

4
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

School Improvement Programs (continued)

20. State assessments (ESEA VI-A-1) D 387,000 387,000 390,000 3,000 0.8%

21. Education for homeless children and youth (MVHAA Title VII-B) D 50,000 50,000 50,000 0 0.0%

22. Education for Native Hawaiians (ESEA VII-B) D 30,500 18,300 18,300 0 0.0%

23. Alaska Native education equity (ESEA VII-C) D 24,000 14,200 14,200 0 0.0%

24. Training and advisory services (CRA IV) D 7,334 7,334 7,334 0 0.0%

25. Rural education (ESEA VI-B) D 162,500 0 0 0 ---

Total, Appropriation D 6,195,768 1 5,439,834 1 5,042,834 (397,000) -7.3%

Total, Budget authority D 6,195,768 5,439,834 5,042,834 (397,000) -7.3%

Current 4,760,768 2 4,004,834 2 3,607,834 2(397,000) -9.9%

Prior year's advance 1,435,000 3 1,435,000 3 1,435,000 0 0.0%

Outlays, Total D 3,609,303 7,710,832 7,054,519 (656,313) -8.5%

1 Adjusted for comparability. Excludes $1,641,705 thousand in fiscal year 2002 and $1,344,650 thousand in fiscal year 2003 for programs requested in fiscal year 2004

under other accounts: $917,955 thousand in fiscal year 2002 and $675,400 thousand in fiscal year 2003 for programs requested under the proposed Innovation and

Improvement account; $723,750 thousand in fiscal year 2002 and $669,250 thousand in fiscal year 2003 for programs requested under the proposed Safe Schools

and Citizenship Education account.

2 Excludes an advance appropriation of $1,435,000 thousand that becomes available on October 1 of the succeeding fiscal year.

3 Adjusted for comparability. Excludes an advance appropriation of $330,000 thousand for Safe and Drug-Free Schools and Communities, which is

requested in fiscal year 2004 under the proposed Innovation and Improvement account.

5
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Indian Education (ESEA VII)

1. Grants to local educational agencies (Part A-1) D 97,133 97,133 97,133 0 0.0%

2. Special programs for Indian children (Part A-2) D 20,000 20,000 20,000 0 0.0%

3. National activities (Part A-3) D 3,235 5,235 5,235 0 0.0%

Total D 120,368 122,368 122,368 0 0.0%

 Outlays D 103,935 123,975 122,201 (1,774) -1.4%

Education Reform Outlays D 1,767,597 701,452 80,024 (621,428) -88.6%

Reading Excellence Outlays D 200,075 309,905 105,538 (204,367) -65.9%

Chicago Litigation Settlement 0utlays D 575 1,930 0 (1,930) -100.0%

TOTAL APPROPRIATION, OESE 19,784,536 20,066,102 20,364,702 298,600 1.5%

TOTAL BUDGET AUTHORITY, OESE 19,354,535 1 20,066,102 1 20,364,702 1 298,600 1.5%

1 Excludes advance appropriations totalling $8,818,301 thousand that become available on October 1 of the succeeding fiscal year.

6
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF INNOVATION AND IMPROVEMENT

Innovation and Improvement

1. Innovation for teacher quality (ESEA II Part C):

(a) Troops-to-teachers (subpart 1-A) D 18,000 1 20,000 1 25,000 5,000 25.0%

(b) Transition to teaching (subpart 1-B) D 35,000 1 39,400 1 49,400 10,000 25.4%

(c) Teaching of traditional American history (subpart 4) D 100,000 1 50,000 1 100,000 50,000 100.0%

2. School choice and flexibility (ESEA Title V):

(a) Charter schools grants (Part B-1) D 200,000 1 200,000 1 220,000 20,000 10.0%

(b) Credit enhancement for charter school facilities (Part B-2) D 0 100,000 1 100,000 0 0.0%

(c) Voluntary public school choice (Part B-3) D 25,000 1 25,000 1 25,000 0 0.0%

(d) Magnet schools assistance (Part C) D 110,000 1 110,000 1 110,000 0 0.0%

(e) Choice incentive fund (Part D-1) D 0 50,000 1 75,000 25,000 50.0%

3. FIE programs of national significance (ESEA V-D, subpart 1) D 383,955 1 35,000 1 35,000 0 0.0%

4. Reading is fundamental/Inexpensive book distribution (ESEA V-D, subpart 5) D 24,000 1 24,000 1 24,000 0 0.0%

5. Ready-to-learn television (ESEA II-D-3) D 22,000 1 22,000 1 22,000 0 0.0%

6. Advanced placement (ESEA I-G) D 22,000 2 22,000 2 22,000 0 0.0%

Total D 939,955 3 697,400 3 807,400 110,000 15.8%

 Outlays D 0 0 40,370 40,370 ---

1 Adjusted for comparability. Funds were provided under the School Improvement Programs account.

2 Adjusted for comparability. Funds were provided under the Education for the Disadvantaged account.

3 Adjusted for comparability. Funds were provided in other accounts: $22,000 thousand in fiscal years 2002 and 2003 from the Education for the Disadvantaged account;

and $917,955 thousand in fiscal year 2002 and $675,400 thousand in fiscal year 2003 for programs under the School Improvement Programs account.

7
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF SAFE AND DRUG-FREE SCHOOLS

Safe Schools and Citizenship Education

1. Safe and drug-free schools and communities (ESEA IV-A):

(a) State grants (Subpart 1)

Annual appropriation D 142,017 142,017 92,017 (50,000) -35.2%

Advance for succeeding fiscal year D 330,000 330,000 330,000 0 0.0%

Subtotal, State grants 472,017 1 472,017 1 422,017 (50,000) -10.6%

(b) National programs (Subpart 2)

(1) Federal activities and evaluation (sections 4121 and 4122) D 134,733 1 145,000 1 154,123 9,123 6.3%

(2) Project SERV (section 4121) D 0 10,000 1 10,000 0 0.0%

(3) Project SERV emergency supplemental (section 4121) D 10,000 1 0 0 0 ---

(4) National coordinator program (section 4125) D 37,500 1 17,233 1 8,110 (9,123) -52.9%

(5) Mentoring program (section 4130) D 17,500 1 0 100,000 100,000 ---

Subtotal, National programs 199,733 172,233 272,233 100,000 58.1%

Subtotal 671,750 644,250 694,250 50,000 0

2. Character education (ESEA V-D, subpart 3) D 25,000 1 25,000 1 25,000 0 0.0%

3. Civic education (ESEA II, Part C-3):

(1) We the People (section 2344) D 15,500 1 0 15,500 15,500 ---

(2) Cooperative education exchange (section 2345) D 11,500 1 0 11,500 11,500 ---

Subtotal 27,000 0 27,000 27,000 ---

4. Physical education initiative (ESEA V-D, subpart 1) D 0 0 10,000 10,000 ---

Total, Appropriation D 723,750 1 669,250 1 756,250 87,000 13.0%

Total, Budget authority D 723,750 669,250 756,250 87,000 13.0%

Current 393,750 2 339,250 2 426,250 2 87,000 25.6%

Prior year's advance 330,000 3 330,000 3 330,000 3 0 0.0%

Outlays, Total D 0 0 37,813 37,813 ---

1 Adjusted for comparability. Funds were provided under the School Improvement Programs account.

2 Excludes an advance appropriation of $330,000 thousand that becomes available on October 1 of the following fiscal year.

3 Adjusted for comparability. The prior year's advance appropriation was provided in the School Improvement Programs account.

8
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF ENGLISH LANGUAGE ACQUISITION

English Language Acquisition (ESEA III)

1. Language acquisition State grants (Part A) D 664,269 1 665,000 665,000 0 0.0%

Outlays D 414,132 507,437 803,072 295,635 58.3%

TOTAL, OELA 664,269 665,000 665,000 0 0.0%

1 Excludes $731 thousand in unobligated funds transferred to the Program Administration account to help offset a $3,731 thousand rescission in

administrative and related expenses pursuant to section 803 of the Fiscal Year 2002 Supplemental Appropriations Act for

Further Recovery from and Response to Terrorist Attacks on the United States. Authority to transfer available funds to offset

the rescission was provided in section 807 of the Act.

9
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

(OSERS)

Special Education (IDEA)

1. State grants:

(a) Grants to States (Part B-611 and Part D-674):

Annual appropriation D 2,456,533 3,456,533 4,456,533 1,000,000 28.9%

Advance for succeeding fiscal year D 5,072,000 5,072,000 5,072,000 0 0.0%

Subtotal 7,528,533 8,528,533 9,528,533 1,000,000 11.7%

(b) Preschool grants (Part B-619) D 390,000 390,000 390,000 0 0.0%

(c) Grants for infants and families (Part C) D 417,000 437,000 447,000 10,000 2.3%

Subtotal, State grants 8,335,533 9,355,533 10,365,533 1,010,000 10.8%

2. National activities (Part D):

(a) State improvement (Subpart 1) D 51,700 51,700 44,000 (7,700) -14.9%

(b) Research and innovation (section 672) D 78,380 78,380 78,380 0 0.0%

(c) Technical assistance and dissemination (section 685) D 53,481 53,481 53,481 0 0.0%

(d) Personnel preparation (section 673) D 90,000 90,000 90,000 0 0.0%

(e) Parent information centers (sections 682-684) D 26,000 26,000 26,000 0 0.0%

(f) Technology and media services (section 687) D 37,710 32,710 32,710 0 0.0%

Subtotal 337,271 332,271 324,571 (7,700) -2.3%

Total, Appropriation D 8,672,804 9,687,804 10,690,104 1,002,300 10.3%

Total, Budget authority D 8,672,804 9,687,804 10,690,104 1,002,300 10.3%

Current 3,600,804 1 4,615,804 1 5,618,104 1 1,002,300 21.7%

Prior year's advance 5,072,000 5,072,000 5,072,000 0 0.0%

Outlays, Total D 7,000,092 7,728,780 9,656,465 1,927,685 24.9%

1 Excludes an advance appropriation of $5,072,000 thousand that becomes available on October 1 of the succeeding fiscal year.

10
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Rehabilitation Services and Disability Research

1. Vocational rehabilitation State grants:

(a) Grants to States (RA I-A and sections 110 and 111) M 2,455,808 2,589,521 2,641,052 51,531 2.0%

(b) Grants for Indians (RA I-C) M 25,575 26,804 27,600 796 3.0%

Subtotal 2,481,383 2,616,325 2,668,652 52,327 2.0%

Discretionary D 0 82,833 0 (82,833) -100.0%

Mandatory baseline M 2,481,383 2,533,492 2,668,652 135,160 5.3%

2. Vocational rehabilitation incentive grants D 0 30,000 0 (30,000) -100.0%

3. Client assistance State grants (RA section 112) D 11,897 11,897 11,897 0 0.0%

4. Training (RA section 302) D 39,629 42,629 42,629 0 0.0%

5. Demonstration and training programs (RA section 303) D 21,238 17,492 24,492 7,000 40.0%

6. Migrant and seasonal farmworkers (RA section 304) D 2,350 0 0 0 ---

7. Recreational programs (RA section 305) D 2,596 0 0 0 ---

8. Protection and advocacy of individual rights (RA section 509) D 15,200 15,200 17,880 2,680 17.6%

9. Projects with industry (RA VI-A) D 22,071 0 0 0 ---

10. Supported employment State grants (RA VI-B) D 38,152 0 0 0 ---

11. Independent living (RA VII):

(a) State grants (Chapter 1, Part B) D 22,296 22,296 22,296 0 0.0%

(b) Centers (Chapter 1, Part C) D 62,500 69,500 69,500 0 0.0%

(c) Services for older blind individuals (Chapter 2) D 25,000 25,000 25,000 0 0.0%

12. Program improvement (RA section 12(a)) D 900 900 850 (50) -5.6%

13. Evaluation (RA section 14) D 1,000 1,000 1,000 0 0.0%

14. Helen Keller National Center for Deaf-Blind Youths and Adults (HKNCA) D 8,717 8,717 8,717 0 0.0%

15. National Institute on Disability and Rehabilitation Research (RA II) D 110,000 110,000 110,000 0 0.0%

16. Assistive technology (ATA) D 60,884 30,884 0 (30,884) -100.0%

17. Access to Telework Fund (RA section 303) D 20,000 0 0 0 ---

Subtotal 464,430 385,515 334,261 (51,254) -13.3%

Total 2,945,813 3,001,840 3,002,913 1,073 0.0%

Discretionary D 464,430 468,348 334,261 (134,087) -28.6%

Mandatory M 2,481,383 2,533,492 2,668,652 135,160 5.3%

Outlays, Total 2,852,170 3,139,163 3,000,912 (138,251) -4.4%

Discretionary D 400,397 765,261 352,007 (413,254) -54.0%

Mandatory M 2,451,773 2,373,902 2,648,905 275,003 11.6%

11
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

American Printing House for the Blind (20 U.S.C. 101 et seq.) D 14,000 14,000 14,000 0 0.0%

Outlays D 12,925 19,613 14,000 (5,613) -28.6%

National Technical Institute for the Deaf (EDA I-B and section 207)

1. Operations D 50,000 49,414 49,414 0 0.0%

2. Construction D 5,376 1,600 367 (1,233) -77.1%

3. Endowment D 0 1,000 1,000 0 0.0%

Total D 55,376 52,014 50,781 (1,233) -2.4%

Outlays D 54,881 48,104 50,883 2,779 5.8%

Gallaudet University (EDA I-A and section 207)

1. Operations D 96,938 93,446 93,446 0 0.0%

2. Endowment D 0 1,000 1,000 0 0.0%

Total D 96,938 94,446 94,446 0 0.0%

Outlays D 96,938 88,839 94,446 5,607 6.3%

Total, Special Institutions for Persons with Disabilities 166,314 160,460 159,227 (1,233) -0.8%

TOTAL APPROPRIATION, OSERS 11,784,931 12,850,104 13,852,244 1,002,140 7.8%

Discretionary D 9,303,548 10,316,612 11,183,592 866,980 8.4%

Mandatory M 2,481,383 2,533,492 2,668,652 135,160 5.3%

TOTAL BUDGET AUTHORITY, OSERS 11,784,931 12,850,104 13,852,244 1,002,140 7.8%

Discretionary D 9,303,548 1 10,316,612 1 11,183,592 1 866,980 8.4%

Mandatory M 2,481,383 2,533,492 2,668,652 135,160 5.3%

1 Excludes an advance appropriation of $5,072,000 thousand that becomes available on October 1 of the succeeding fiscal year.

12
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF VOCATIONAL AND ADULT EDUCATION (OVAE)

Vocational and Adult Education

1. Vocational education (Carl D. Perkins VTEA):

(a) State grants (VTEA Title I and WIA section 503):

Annual appropriation D 389,000 389,000 0 (389,000) -100.0%

Advance for succeeding fiscal year D 791,000 791,000 0 (791,000) -100.0%

Subtotal 1,180,000 1,180,000 0 (1,180,000) -100.0%

(b) National programs (section 114) D 12,000 12,000 0 (12,000) -100.0%

(c) Occupational and employment information (section 118) D 9,500 0 0 0 ---

(d) Tech-prep education State grants (Title II) D 108,000 108,000 0 (108,000) -100.0%

(e) Tech-prep demonstration (section 207) D 5,000 0 0 0 ---

2. Secondary and technical education State grants (proposed legislation):

Annual appropriation D 0 0 209,000 209,000 ---

Advance for succeeding fiscal year D 0 0 791,000 791,000 ---

Subtotal 0 0 1,000,000 1,000,000 ---

Subtotal, Vocational education 1,314,500 1,300,000 1,000,000 (300,000) -23.1%

3. Adult literacy:

(a) Adult basic and literacy education State grants (proposed legislation) D 0 0 584,300 584,300 ---

(b) Adult education State grants (AEFLA and WIA section 503) D 575,000 575,000 0 (575,000) -100.0%

(c) National Institute for Literacy (AEFLA section 242) D 6,560 6,560 1 6,732 1 172 2.6%

(d) National leadership activities (AEFLA section 243) D 9,500 9,500 0 (9,500) -100.0%

Subtotal, Adult literacy 591,060 591,060 591,032 (28) 0.0%

4. State grants for incarcerated youth offenders (HE Amendments of 1998, VIII-D) D 17,000 0 0 0 ---

5. Literacy programs for prisoners (NLA, section 601) D 5,000 0 0 0 ---

Total, Appropriation D 1,927,560 2 1,891,060 2 1,591,032 (300,028) -15.9%

Total, Budget authority D 1,927,560 1,891,060 1,591,032 (300,028) -15.9%

Current 1,136,560 3 1,100,060 3 800,032 3(300,028) -27.3%

Prior year's advance 791,000 791,000 791,000 0 0.0%

TOTAL APPROPRIATION, OVAE 1,927,560 1,891,060 1,591,032 (300,028) -15.9%

TOTAL BUDGET AUTHORITY, OVAE 1,927,560 3 1,891,060 3 1,591,032 3(300,028) -15.9%

Outlays D 1,777,695 1,928,973 1,883,777 (45,196) -2.3%

1 Excludes funds requested for increased agency pension and annuitant health benefits costs: $57 thousand in fiscal year 2003 and $64 thousand in fiscal yer 2004.

2 Adjusted for comparability. Excludes $6,500 thousand in fiscal years 2002 and 2003 for Tribally Controlled Postsecondary Vocational and Technical Institutions,

which is requested in fiscal year 2004 under the Higher Education account.

3 Excludes an advance appropriation of $791,000 thousand that becomes available on October 1 of the succeeding fiscal year.

13
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF FEDERAL STUDENT AID (OFSA)

Student Financial Assistance

1. Federal Pell grants (HEA IV-A-1) D 11,314,000 10,863,000 12,715,000 1,852,000 17.0%

Prior-year funding shortfall (non-add) D (923,000) (1,233,000) (1,854,000) (621,000) 50.4%

Current-year funding shortfall (non-add) D 1,233,000 1,854,000 549,000 (1,305,000) -70.4%

Subtotal, Program costs (non-add) 11,624,000 11,484,000 11,410,000 (74,000) -0.6%

Subtotal, Appropriation 11,314,000 1 10,863,000 12,715,000 1,852,000 17.0%

Maximum award (in whole dollars) $4,000 $4,000 $4,000 0 0.0%

Recipients (in thousands) 4,812 4,866 4,873 7 0.1%

2. Campus-based programs:

(a) Federal supplemental educational opportunity grants (HEA IV-A-3) D 725,000 725,000 725,000 0 0.0%

(b) Federal work-study (HEA IV-C) D 1,011,000 1,011,000 1,011,000 0 0.0%

(c) Federal Perkins loans (HEA IV-E):

(1) Capital contributions D 100,000 100,000 0 (100,000) -100.0%

(2) Loan cancellations D 67,500 67,500 67,500 0 0.0%

Subtotal 167,500 167,500 67,500 (100,000) -59.7%

Subtotal, Campus-based programs 1,903,500 1,903,500 1,803,500 (100,000) -5.3%

3. Leveraging educational assistance partnership (HEA IV-A-4) D 67,000 2 0 0 0 ---

4. Loan forgiveness for child care providers (HEA 428K) D 1,000 1,000 0 (1,000) -100.0%

Total D 13,285,500 12,767,500 14,518,500 1,751,000 13.7%

Outlays D 12,369,330 13,351,929 13,366,200 14,271 0.1%

1 Includes a $1,000,000 thousand fiscal year 2002 supplemental appropriation.

2

Includes $37,000 thousand in fiscal year 2002 for Special LEAP, pursuant to HEA Section 415A(b)(2) which states that when the appropriation for LEAP

exceeds $30,000 thousand, the excess shall be reserved to carry out Special LEAP, authorized under HEA Section 415E.

14
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Student Aid Administration

1. Student aid administration (DEOA and HEA IV-D section 458):

(a) Administrative costs D 0 737,000 752,010 15,010 2.0%

(b) Payments for services to guaranty agencies (HEA IV-D section 458) D 0 195,000 195,000 0 0.0%

(c) Agency increase for full funding of Federal retiree costs (non-add) D 0 4,386 3,999 (387) -8.8%

Subtotal 0 932,000 947,010 15,010 1.6%

2. Prior mandatory Federal administration (HEA IV-D section 458):

(a) Federal administration M 780,000 0 0 0 ---

(b) Payments for services to guaranty agencies (non-add) M 180,000 0 0 0 ---

Subtotal 780,000 1 0 0 0 ---

3. Prior discretionary student aid administration:

(a) FFEL Federal administration (FCRA section 505(e)) D 48,836 2, 3 0 0 0 ---

(b) Program administration costs D 57,001 4, 5 0 0 0 ---

Subtotal 105,837 0 0 0 ---

Total 885,837 932,000 947,010 15,010 1.6%

Discretionary D 105,837 932,000 947,010 15,010 1.6%

Mandatory M 780,000 0 0 0 ---

Outlays D 0 598,689 833,549 234,860 39.2%

Federal Student Loan Reserve Fund (HEA IV-B section 422A)

Outlays M 208,607 97,644 96,054 (1,590) -1.6%

1 Adjusted for comparability. Funds were provided in the Federal Direct Student Loans Program Account.

2 Adjusted for comparability. Funds were provided in the Federal Family Education Loans Program Account.

3 Reflects an $800 thousand reduction pursuant to Section 516 of the Fiscal Year 2002 Labor, HHS, Education Appropriations Act, which requires that

administrative and related expenses for departmental management for the Departments of Labor, HHS, and Education be reduced on a pro rata basis

by a total of $25 million.

4 Adjusted for comparability. Funds were provided in the Program Administration account.

5 Reflects a rescission of $700 thousand pursuant to Section 1403 of the Fiscal Year 2002 Supplemental Appropriations Act for Further Recovery from and

Response to Terrorist Attacks on the United States.

15
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Federal Direct Student Loan Program Account

1. Loan subsidies (HEA IV-B) M (721,929) (488,132) (865,900) (377,768) -77.4%

2. Reestimate of existing loans M 0 4,590,922 0 (4,590,922) -100.0%

Subtotal, loan subsidies (721,929) 4,102,790 (865,900) (4,968,690) -121.1%

3. Federal administration (HEA IV-D section 458):

(a) Mandatory M 0 795,000 1 795,000 1 0 0.0%

(b) Discretionary, modification of mandatory account D 0 (795,000) (795,000) 0 0.0%

Subtotal, Federal administration 0

2 0 0 0 ---

Total (721,929) 2 4,102,790 (865,900) (4,968,690) 121.1%

Discretionary D 0 (795,000) (795,000) 0 0.0%

Mandatory M (721,929) 4,897,790 (70,900) (4,968,690) -101.4%

Outlays, Total M 97,304 4,334,392 (785,498) (5,119,890) 118.1%

Federal administration--mandatory M 819,233 741,529 784,150 42,621 5.7%

Loan subsidies--mandatory M (721,929) 4,102,790 (865,900) (4,968,690) 121.1%

Funds returned to Treasury (non-add) M (721,929) (488,132) (910,067) (421,935) -86.4%

Discretionary, modification of mandatory account D 0 (509,927) (703,748) (193,821) -38.0%

Federal Family Education Loan Program Account (HEA IV-B)

1. Loan subsidies M 4,311,738 6,401,647 6,272,117 (129,530) -2.0%

2. Reestimate of existing loans M 0 (2,979,866) 0 2,979,866 100.0%

Total, FFEL Program Account 4,311,738 3 3,421,781 6,272,117 2,850,336 83.3%

Outlays, Total 3,836,769 2,790,386 5,661,131 2,870,745 102.9%

Discretionary D 46,382 12,410 3,403 (9,007) -72.6%

Mandatory M 3,790,387 2,777,976 5,657,728 2,879,752 103.7%

Federal Family Education Loans Liquidating Account (HEA IV-B)

1. Pre-1992 student loans M (527,874) 4(673,304) 4(548,878) 4 124,426 18.5%

Outlays M (1,493,940) (675,015) (548,878) 126,137 18.7%

Funds returned to Treasury (non-add) M (527,874) 1,705,685 (548,878) (2,254,563) 132.2%

TOTAL, OFSA 17,233,272 20,550,767 20,322,849 (227,918) -1.1%

Total, Discretionary D 13,391,337 12,904,500 14,670,510 1,766,010 13.7%

Total, Mandatory M 3,841,935 7,646,267 5,652,339 (1,993,928) -26.1%

1 Excludes funds requested for increased pension and health benefits costs proposed in the President's budget: $2,256 thousand in fiscal year 2003 and $2,057 thousand in fiscal year 2004.

2 Adjusted for comparability. Excludes mandatory funds of $780,000 thousand in fiscal year 2002 for Federal administration costs, which are

requested in fiscal years 2003 and 2004 as discretionary funds in the proposed Student Aid Administration account.

3 Adjusted for comparability. Excludes discretionary funds of $48,836 thousand in fiscal year 2002 for Federal administration costs, which are

requested in fiscal years 2003 and 2004 in the proposed Student Aid Administration account.

4 Reflects net transfers to Treasury; no new budget authority is required.

NOTE: Mandatory amounts for fiscal year 2003 are the most recent estimates.

16
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

OFFICE OF POSTSECONDARY EDUCATION (OPE)

Higher Education

1. Aid for institutional development (HEA III):

(a) Strengthening institutions (Part A, section 311) D 73,625 76,275 76,275 0 0.0%

(b) Strengthening tribally controlled colleges and universities (Part A, section 316) D 17,500 18,130 19,037 907 5.0%

(c) Strengthening Alaska Native and Native Hawaiian-serving institutions (Part A,

section 317) D 6,500 6,734 4,048 (2,686) -39.9%

(d) Strengthening HBCUs (Part B, section 323) D 206,000 213,415 224,086 10,671 5.0%

(e) Strengthening historically black graduate institutions (Part B, section 326) D 49,000 50,764 53,302 2,538 5.0%

(f) Minority science and engineering improvement (Part E-1) D 8,500 8,500 8,500 0 0.0%

Subtotal 361,125 373,818 385,248 11,430 3.1%

2. Other aid for institutions:

(a) Developing Hispanic-serving institutions (HEA V) D 86,000 89,096 93,551 4,455 5.0%

(b) International education and foreign language studies:

(1) Domestic programs (HEA VI-A and B) D 85,200 88,000 88,000 0 0.0%

(2) Overseas programs (MECEA section 102(b)(6)) D 11,800 13,000 13,000 0 0.0%

(3) Institute for International Public Policy (HEA VI-C) D 1,500 1,500 1,500 0 0.0%

Subtotal 98,500 102,500 102,500 0 0.0%

(c) Fund for the Improvement of Postsecondary Education (HEA VII-B) D 180,922 39,138 39,138 0 0.0%

(d) Demonstration projects to ensure quality higher education for students with

disabilities (HEA VII-D) D 7,000 0 0 0 ---

(e) Interest subsidy grants (HEA section 121) D 5,000 3,000 2,000 (1,000) -33.3%

(f) Tribally controlled postsecondary vocational and technical institutions

(VTEA section 117) D 6,500 1 6,500 1 6,500 0 0.0%

3. Assistance for students:

(a) Federal TRIO programs (HEA IV-A-2, Chapter 1) D 802,500 802,500 802,500 0 0.0%

(b) Gaining early awareness and readiness for undergraduate programs

(GEAR UP) (HEA IV-A-2, Chapter 2) D 285,000 285,000 285,000 0 0.0%

(c) Scholarships and fellowships:

(1) Byrd honors scholarships (HEA IV-A-6) D 41,001 41,001 41,001 0 0.0%

(2) Javits fellowships (HEA VII-A-1) D 10,000 10,000 10,000 0 0.0%

(3) Graduate assistance in areas of national need (HEA VII-A-2) D 31,000 31,000 31,000 0 0.0%

(4) Thurgood Marshall legal educational opportunity program (HEA VII-A-3) D 4,000 0 0 0 ---

(5) B.J. Stupak Olympic scholarships (HE Amendments of 1992, section 1543) D 1,000 0 0 0 ---

(d) Child care access means parents in school (HEA IV-A-7) D 22,000 2 15,000 15,000 0 0.0%

1 Adjusted for comparability. Funds were provided under the Vocational and Adult Education account.

2 Excludes $3,000 thousand in unobligated funds transferred to the Program Administration account to help offset a $3,731 thousand rescission in

administrative and related expenses pursuant to section 803 of the Fiscal Year 2002 Supplemental Appropriations Act for

Further Recovery from and Response to Terrorist Attacks on the United States. Authority to transfer available funds to offset

the rescission was provided in section 807 of the Act.

17
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Higher Education (continued)

4. Teacher quality enhancement (HEA II-A) D 90,000 90,000 90,000 0 0.0%

5. GPRA data/HEA program evaluation (Department of Education Appropriations Act,

2002) D 1,000 1,000 1,000 0 0.0%

6. Underground railroad program (HE Amendments of 1998, VIII-H) D 2,000 0 0 0 ---

Total D 2,034,548 1,889,553 1,904,438 14,885 0.8%

Outlays D 1,687,173 2,099,713 1,905,009 (194,704) -9.3%

National Security Education Trust Fund (NSEA)

1. National security education trust fund (proposed legislation) D 0

1 01 8,000 8,000 ---

Outlays D 0 0 1,715 1,715 ---

1

Fiscal year 2002 and 2003 appropriations of $8,000 thousand for the National Security Education Trust Fund were provided to the Department of Defense.

Administration of the trust fund will be transferred to the Department of Education in fiscal year 2004 upon enactment of proposed legislation.

18
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Howard University

1. Howard University Hospital (20 U.S.C. 128) D 30,374 30,374 30,374 0 0.0%

2. General support (20 U.S.C. 121 et seq.) D 207,100 207,100 207,100 0 0.0%

Total D 237,474 237,474 237,474 0 0.0%

Outlays D 233,869 229,994 237,474 7,480 3.3%

College Housing and Academic Facilities Loans Program Account

(HEA section 121)

1. Federal administration (FCRA section 505(e)) D 762 762 1 774 1 12 1.6%

 Outlays D 955 943 899 (44) -4.7%

College Housing and Academic Facilities Loans Liquidating Account

(HEA section 121)

1. College housing and academic facilities loans M (4,730) (2,087) 1,312 3,399 -162.9%

 Outlays M 1,326 2 2,031 1,312 (719) -35.4%

Historically Black College and University Capital Financing Program

Account (HEA III-D)

1. Federal administration (FCRA section 505(e)) D 208 208 2 210 2 2 1.0%

Outlays D 197 248 233 (15) -6.0%

Higher Education Facilities Loans Liquidating Account 

(HEA section 121)

1. Higher education facilities loans M (1,631) (2,605) (1,318) 1,287 -49.4%

 Outlays M (288) (1,340) (1,318) 22 -1.6%

College Housing Loans Liquidating Account (HEA section 121)

1. College housing loans M (36,941) (31,417) (27,454) 3,963 -12.6%

Outlays M (36,933) (29,609) (27,454) 2,155 -7.3%

TOTAL, OPE 2,229,690 2,091,888 2,123,436 31,548 1.5%

Total, Discretionary D 2,272,992 2,127,997 2,150,896 22,899 1.1%

Total, Mandatory M (43,302) (36,109) (27,460) 8,649 -24.0%

1 Excludes $25 thousand requested for increased agency pension and annuitant health benefits costs, which are currently paid from a central Office of Personnel Management mandatory fund.

2 Excludes $3 thousand requested for increased agency pension and annuitant health benefits costs, which are currently paid from a central Office of Personnel Management mandatory fund.

19
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

INSTITUTE OF EDUCATION SCIENCES (IES)

Institute of Education Sciences

1. Research and statistics:

(a) Research, development, and dissemination (ESRA I-B and D) D 121,817 175,000 185,000 10,000 5.7%

(b) Statistics (ESRA I-C) D 85,000 95,000 95,000 0 0.0%

2. Regional educational laboratories (ESRA I-D) D 67,500 67,500 0 (67,500) -100.0%

3. Assessment (NAEPAA):

(a) National assessment (section 303) D 107,500 90,825 90,825 0 0.0%

(b) National Assessment Governing Board (section 302) D 4,053 4,562 1 5,090 1 528 11.6%

Subtotal 111,553 95,387 95,915 528 0.6%

4. Technical assistance providers (ETAA section 205):

(a) Regional technology in education consortia D 10,000 0 0 0 ---

(b) Comprehensive regional assistance centers D 28,000 0 0 0 ---

(c) Eisenhower regional mathematics and science education consortia D 15,000 0 0 0 ---

Subtotal 53,000 0 0 0 ---

5. Eisenhower National Clearinghouse for Mathematics and Science Education

(ESEA section 2102(a)(2)--expired) D 5,000 0 0 0 ---

Total D 443,870 432,887 375,915 (56,972) -13.2%

Outlays D 625,156 685,351 433,592 (251,759) -36.7%

TOTAL, ES 443,870 432,887 375,915 (56,972) -13.2%

1 Excludes $36 thousand requested for increased agency pension and annuitant health benefits costs, which are currently paid from a central Office of Personnel Management mandatory fund.

NOTE: Activities and legislative citations have been adjusted to reflect the enactment of Public Law 107-279, Education Sciences Reform, which replaced the Educational Research, Development,

Dissemination, and Improvement Act and the National Education Statistics Act.

20
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

DEPARTMENTAL MANAGEMENT

Program Administration (DEOA)

1. Salaries and expenses D 365,528 1, 2 399,000 420,850 21,850 5.5%

2. Building modernization D 0 12,795 13,644 849 6.6%

3. Agency increase for full funding of Federal retiree costs (non-add) D 0 11,496 10,676 (820) -7.1%

Total D 365,528 3 411,795 434,494 22,699 5.5%

Outlays D 414,730 415,401 415,251 (150) 0.0%

Office for Civil Rights (DEOA, section 203)

1. Salaries and expenses D 79,666 4 86,276 91,275 4,999 5.8%

2. Agency increase for full funding of Federal retiree costs (non-add) D 0 3,434 3,434 0 0.0%

Total D 79,666 86,276 91,275 4,999 5.8%

Outlays D 79,308 81,750 89,640 7,890 9.7%

Office of the Inspector General (DEOA, section 212)

1. Salaries and expenses D 38,588 5 41,000 48,137 7,137 17.4%

2. Agency increase for full funding of Federal retiree costs (non-add) D 0 1,361 1,361 0 0.0%

Total D 38,588 41,000 48,137 7,137 17.4%

Outlays D 37,210 39,483 44,219 4,736 12.0%

Departmental Renovation (DEOA) Outlays D 11 2,423 0 (2,423) -100.0%

TOTAL, DEPARTMENTAL MANAGEMENT 483,782 539,071 573,906 34,835 6.5%

1 Reflects a reduction of $803 thousand pursuant to Section 516 of the Fiscal Year 2002 Labor, HHS, Education Appropriations Act.

2 Excludes $880 thousand in administrative and related expenses rescinded pursuant to section 1403 of the Fiscal Year 2002 

Supplemental Appropriations Act for Further Recovery from and Response to Terrorist Attacks on the United States. An

additional rescission of $3,731 thousand pursuant to section 803 of the Act was offset by unobligated funds transferred to the

Program Administration account: $3,000 thousand from the Higher Education account and $731 thousand from the English

Language Acquisition account. Authority to transfer available funds to offset the rescission was provided in section 807 of the Act.

3 Adjusted for comparability. Excludes $57,001 thousand to administer student aid programs, which are consolidated with FFEL and FDSL Federal administration costs

and requested in fiscal years 2003 and 2004 under the proposed Student Aid Administration account.

4 Reflects a rescission of $268 thousand pursuant to Section 1403 of the Fiscal Year 2002 Supplemental Appropriations Act for Further Recovery from and

Response to Terrorist Attacks on the United States.

5 Reflects a rescission of $132 thousand pursuant to Section 1403 of the Fiscal Year 2002 Supplemental Appropriations Act for Further Recovery from and

Response to Terrorist Attacks on the United States.

21
DEPARTMENT OF EDUCATION FISCAL YEAR 2004 PRESIDENT'S BUDGET 1/27/2003

(in thousands of dollars) 2003 2004

Category 2002 President's President's Change from 2003 President's Request

Office, Account, Program and Activity Code Appropriation Request Request Amount Percent

Contributions (DEOA, section 421) M 485 0 0 0 ---

Outlays M 469 85 0 (85) -100.0%

General Fund Receipts:

1. Perkins loan repayments M (39,041) (50,000) (50,000) 0 0.0%

2. CHAFL downward reestimate of loan subsidies M (27) (27) 0 27 -100.0%

Total (39,068) (50,027) (50,000) 27 -0.1%

Outlays, Total (39,068) (50,027) (50,000) 27 -0.1%

APPROPRIATION TOTAL, EDUCATION DEPARTMENT 56,177,032 60,403,502 61,382,734 979,232 1.6%

Discretionary funds D 49,935,599 50,309,879 1 53,139,203 1 2,829,324 5.6%

Mandatory funds M 6,241,433 10,093,623 8,243,531 (1,850,092) -18.3%

BUDGET AUTHORITY TOTAL, EDUCATION DEPARTMENT 55,747,031 60,403,502 61,382,734 979,232 1.6%

Discretionary funds D 49,505,598 2 50,309,879 2 53,139,203 2 2,829,324 5.6%

Mandatory funds M 6,241,433 10,093,623 8,243,531 (1,850,092) -18.3%

OUTLAYS TOTAL, EDUCATION DEPARTMENT 46,285,284 59,379,318 58,854,387 (524,931) -0.9%

Discretionary funds D 41,305,647 50,039,352 51,159,788 1,120,436 2.2%

Mandatory funds M 4,979,637 9,339,966 7,694,599 (1,645,367) -17.6%

1 Excludes funds for increased agency pension and annuitant health benefits costs, which are currently paid from a central Office of Personnel Management fund:

$23,728 thousand in fiscal year 2003 and $22,528 thousand in fiscal year 2004.

2 Excludes a total of $15,011,301 thousand in advance appropriations that becomes available on October 1 of the succeeding fiscal year.

NOTE: Appropriation totals displayed above reflect the total funds provided in the year of appropriation, including advance appropriation amounts that do not become

available until the succeeding fiscal year. The total budget authority reflects funds that become available in the fiscal year shown, which includes new amounts

provided for that fiscal year and amounts advanced from the prior year's appropriation.

22