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Reports of Waste Fuel Lawmakers' Interest in Ed. Dept. Cuts

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House Republicans appeared to take little comfort last week in assurances that the Clinton Administration had been working to reduce waste in federal education programs, and they reiterated their interest in abolishing the Education Department or merging it with the Labor Department.

"Based on this testimony, program consolidations and increased efficiency may not be enough," said Rep. Christopher Shays, D-Conn., the chairman of the House Subcommittee on Human Resources and Intergovernmental Relations.

"We need to look seriously at merging the federal education and job-training efforts into a single department that will focus on the national interest in a literate, technically proficient citizenry capable of productive work in the global economy," Mr. Shays said.

The hearing was the subcommittee's second focusing on proposals to downsize the Education Department. Last month, panel members sparred with Secretary of Education Richard W. Riley on the topic. (See Education Week, 3/22/95.)

Rep. Mark Edward Souder, R-Ind., blamed perceptions of federal intrusiveness in local education matters for the defeat of local tax levies in his state.

Democrats on the panel, however, argued that many of the government's current expenditures in education may actually result in savings later on. They cited the start-up costs of initiatives designed to make the government more efficient.

And Dianne Van Riper, the Education Department's assistant inspector general for investigation services, said the agency has engaged in a sustained effort to curb fraud and abuse.

"For the first time, what I see is a unified and focused effort to address problems--and what it is we what want to be doing--in the Department of Education," she said.

'Gold Mine' of Cuts?

But the testimony of Ms. Van Riper and Cornelia M. Blanchette, an analyst at the General Accounting Office, painted a picture of continued fraud and waste in federal education programs.

"You have made me realize there is a gold mine of opportunity here," Mr. Shays remarked.

The Education Department accounts for just $33 billion of the $70 billion the federal government spends on education initiatives, and many of the programs operated by different agencies may overlap in their goals or target populations, said Ms. Blanchette, the G.A.O.'s associate director for education and employment issues.

"This means that some of the largest and most significant federal education-related programs operate outside the Department of Education," Representative Shays said.

"It's another example of how fractionated and uncoordinated our federal education policy has become over the years," Mr. Shays said.

Ms. Van Riper also discussed familiar problems in the federal guaranteed-student-loan program, now known as the Federal Family Education Loan program. She said the program lost $4.7 billion to defaults in fiscal 1993 alone, and she estimated the government's future default liabilities at between $11 billion and $13 billion.

She also acknowledged that, during the 1993-94 school year, the government gave $70 million in Pell Grants and $45 million in guaranteed loans to ineligible recipients, some of whom were not U.S. citizens.

The federal officials also testified that large sums of federal grant money have gone to students in for-profit job-training schools that were preparing people for fields with few openings.

For example, roughly 40 percent of those who recently used federal money to study cosmetology--a field experiencing a glut of workers--defaulted on their loans, Ms. Van Riper said.

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