Message to the Congress Transmitting Proposed Education Assistance Legislation

To the Congress of the United States:

I am herewith transmitting to the Congress three bills to improve equity and quality in American education: "The Student Assistance Improvement Amendments", "The Education Savings Account Act" and "The Equal Educational Opportunity Act".

All Americans, and especially today's parents, are deeply concerned about our system of education—and rightly so. For generations we have been justly proud of the quality and openness of our education system from kindergarten to postgraduate levels, both public and private. It has served the nation well, but now it is in need of significant changes in key areas.

The programs and budget requests I recommended to the Congress this year address a wide range of education issues. They reflect my strong conviction that education decisions should be made by parents, students, States and local officials. The national government also has an important, but limited, role to play in the education system. Thus, while I have worked to brake the runaway growth in education spending, my budget calls for over $13 billion for the coming fiscal year. Within this total is over $4 billion for supplemental educational services for the educationally disadvantaged and for the handicapped. I have also included over $5.6 billion for post-secondary student aid.

Despite these huge investments and its own basic strengths, our education system has not been immune to the stresses and strains of a changing society. Its problems are complex and varied. They call for a broad range of creative approaches by concerned parents, by educators, by the private sector, and by government.

Two of these critical problems are the reasons for the bills I am proposing today. These problems are:

—Meeting Higher Education Costs. The cost of higher education rose 30% in just three years, from 1978 to 1981, making it more difficult for qualified students from lower and middle-income families to meet the cost of attending many institutions despite very rapidly rising Federal student aid. At the same time, many more affluent families who could contribute more have been paying a smaller share of these costs, relying instead on increasingly generous Federal aid.

—Parental Choice. At the elementary and secondary level, parents too often feel excluded from the education of their own children by education bureaucracies. Parents who turn to private schools are burdened with a double payment—they must pay private school tuition in addition to taxes for the public schools. As a practical matter the ability to choose and the opportunity to obtain a private education are made difficult if not impossible for many Americans—particularly those from low and middle-income families.

Administration Proposals

The three bills I am transmitting to Congress today take on squarely these two important issues.

Meeting Higher Education Costs

The "Student Assistance Improvement Amendments" I am transmitting will:

• Redirect the present student aid system from one in which some students can get Federal grants without contributing any of their own money, to a system which begins with self-help, with parents and students shouldering their fair share of the cost of education before Federal grants are made;

• Increase by almost 60% the funds available for work-study to help students help themselves meet their obligations;

• Increase by two-thirds the maximum Pell grant students can receive under current law; and

• Require all applicants for guaranteed student loans to prove need before receiving the generous interest subsidy.

With these changes, Federal student aid dollars will help more low-income persons meet the burden of education costs and will help restore confidence in the fairness of our system of education.

In addition, I am asking the Congress to enact my Education Savings Account proposal. This bill speaks to another aspect of the education cost problem I have described: the difficulty parents have in saving for college costs.

Everyone has trouble saving for the future, especially when today's demands on our resources are so great. Nevertheless, the importance of saving for higher education has never been so critical. We need a strong, diverse higher education system to which all Americans have access. Moreover, many of the nation's better job opportunities will be limited to those who have a higher education. So I have today proposed an additional special incentive for parents to begin, as early as possible, to set aside money for their children's college education.

Under my proposal many parents will be able to put aside up to $1,000 per year in special accounts whose interest income will be tax free. The full benefit will be available to all those with incomes below $40,000 per year; reduced benefits are included for families with incomes up to $60,000.

Over time, this tax incentive will greatly enhance parents' ability to contribute to the cost of the higher education they want for their children. It cannot, of course, substitute for the student's own work and savings, nor for Federal aid. It will, however, help to restore a better balance in the system and make meeting the family's share of education costs a less burdensome task in future years.

Parental Choice

At the elementary and secondary level, we face different problems. The public education system, as it has evolved over the decades, is the backbone of American education and one of the great strengths of our democracy. However, many parents want to use alternative approaches to meet the educational needs of their children. This option should be theirs in our free society. But there can be meaningful choice only if our system also makes access to alternatives a reality.

Several weeks ago I sent to Congress a bill to make tuition tax credits available to all parents, within eligible income limits, who choose to send their children to nondiscriminatory private schools. Today, I am proposing a bill, the "Equal Educational Opportunity Act," to permit States and localities to offer another kind of choice to parents whose children are selected for participation in our $3 billion compensatory education program, Chapter 1 of the Education Consolidation and Improvement Act.

Chapter 1 helps meet the costs of supplemental educational services, like remedial reading, for millions of educationally disadvantaged children each year. In some cases, we believe that the parents of those children would prefer a greater range of educational choice in their selection of a school. Under this bill, in States or school districts which choose to provide the option, parents would be able to participate in a voucher program to exercise that choice at whatever school they felt provided the greatest educational opportunity for their children.

I firmly believe that in districts where the voucher option is implemented, education will be strengthened for all. The potential for competition for enrollments and resources will raise the quality of both public and private education. Parents will gain a greater measure of control. Children will receive a better education.

Conclusion

These three bills address central issues in American education. They will bring greater order and balance to Federal, family and student efforts to meet the rising cost of higher education. They will help bring parental choice and the benefits of competition to elementary and secondary education. They, and all my proposals in the education area, make clear the limited role of the Federal government and wherever possible restore more choice and control to the family. Their ultimate goal is more diverse, higher quality education for all Americans. I ask your support for rapid consideration and passage of these proposals.

RONALD REAGAN

The White House,

March 17, 1983.