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Bill Diverts Funds To Fulfill Promise Of School-Integration Aid for Chicago

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Washington--The Congress this month approved a measure that would allow the Education Department to divert $20 million in unspent Guaranteed Student Loan (gsl) funds to help cover the cost of Chicago's school-desegregation plan.

The bill, approved by voice votes in both the House and Senate on Aug. 1, had not yet been acted on by President Reagan as of late last week. A spokesman for the bill's sponsor, Representative Sidney R. Yates, Democrat of Illinois, said that officials in the Office of Management and Budget and the Education Department have raised no objections to the diversion of the funds.

Representative Yates introduced the bill in response to a federal district judge's order on June 30 requiring the government to provide the school district with at least $14.6 million in desegregation assistance in the upcoming school year and perhaps as much as $250 million over the next five years. (See Education Week, July 25, 1983)

U.S. District Judge Milton I. Shadur issued that ruling after deciding that the Justice Department had failed to live up to its obligation, contained in a 1980 consent decree, to "make every good-faith effort" to help finance the school system's desegregation plan. He also ordered the Education Department to freeze the spending of $47.5 million in fiscal 1983 funds currently earmarked for the Secretary of Education's discretionary fund, Title IV desegregation-assistance centers, the Follow Through program, women's educational equity programs, and special assistance for the Virgin Islands.

Late last month the Justice Department appealed Judge Shadur's decision to the U.S. Court of Appeals for the Seventh Circuit and asked that court to stay his order. The appeals panel is scheduled to hear arguments in the case on Aug. 26.

According to Mary A. Bain, an assistant to Representative Yates, the $20 million appropriated by the Congress last week was "freed up" from the gsl fund as a result of the nationwide decline in interest rates.

Last year the Congress appropriated $3.1 billion for the loan program, but low interest rates through the first three quarters of the fiscal year have kept the cost of the program below that level.

Last February, the Administration asked the Congress to rescind $900 million from the program, but the Congress refused to act on that request. Any gsl funds left over from the current fiscal year will be carried over to the program's fiscal 1984 budget.

Ms. Bain also said that Representative Yates plans to confer with his colleagues in both the House and Senate later this year about the possibility of enacting additional legislation to provide more school-desegregation funds for Chicago.--tm

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