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Federal File: Issue reopened

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The General Accounting Office late last week was expected to release its long-awaited report on race-based scholarships--forcing Secretary of Education Richard W. Riley to face a controversial issue he inherited from his predecessor.

Spokesmen said the Education Department's office for civil rights is preparing policy guidance on the matter that is scheduled to be released soon.

Release of the G.A.O.'s report was delayed from the middle of last week until late in the week as researchers added their final touches.

In December 1990, then Assistant Secretary for Civil Rights Michael L. Williams declared such scholarships illegal under Title VI of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, or ethnic origin.

Secretary of Education Lamar Alexander was later poised to propose rules essentially backing that interpretation, but members of Congress asked him to wait for the G.A.O. study.

The study was to survey the nation's colleges and universities for the prevalence and use of scholarships reserved for students of a certain race.

A critic of direct lending is charging that new appointments to an independent committee that advises Congress on financial-aid issues may cause the committee to be biased in favor of the new federal direct-lending program.

Two Bush Administration appointees to the Advisory Committee on Student Financial Assistance were asked to resign from the committee last November, before their terms ended. Two members whose terms expired were not reappointed, and a student who graduated was replaced with a new student.

John E. Dean, a lawyer who represents the Consumer Bankers Association, said the appointment "of people who are lobbyists and advocates ... is a step away from objectivity and undermines the proper functioning of the advisory committee.''

The committee, however, advises Congress on the implementation of programs but does not determine policy, said the committee's staff director, Brian Fitzgerald.

David K. Malek, one of the Bush appointees who was asked to resign, also said that he does not believe the changes will hurt the committee's objectivity, and noted that he himself had supported direct lending.--MARK PITSCH & MEG SOMMERFELD

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