President Reagan will meet with a Cabinet council on education today amid indications of growing support for Secretary of Education Terrel H. Bell's plan to convert his department into a scaled-down, non-Cabinet Education Foundation.
Reagan promised in the campaign to abolish the department but there have been differences inside the administration over exactly how.
In its current form, according to government sources, the plan favored by Bell would retain nearly $11 billion in education programs in the new foundation, including elementary and secondary school grants for poor students, education block grants, college student aid, as well as data-gathering and research functions.
An additional $1.5 billion in programs now handled by Bell's department would be spun off to other departments or agencies.
These would include aid to handicapped students, which would go to Health and Human Services, civil rights enforcement, which would go to Justice, and college housing, which would go to Housing and Urban Development.
Sources said the alternative favored by Bell appears to be winning a strong "consensus" among senior White House staff, but the final decision will be up to the president. The swing of Reagan aides toward Bell's plan was revealed in a syndicated report by columnists Roland Evans and Robert Novak, who indicted conservative displeasure at it.
Bell's presentation will also describe one other option which is described as "viable" although Bell doesn't favor it: simply abolishing the department and dispersing all its functions to other federal agencies and departments.
This is the concept that many conservatives wanted and expected Reagan to propose, on the basis of his campaign pledges to abolish the department.
During the battle over creation of the department during the Carter administration, conservative groups and members of Congress said creation of an education department would give the federal government a dominant, policy-making role in education at the expense of the local school systems.
Two other options were also considered in the decision memorandum, but termed non-viable.
One was to merge the department back into HHS. The other was to make it into an independent agency without loss of major functions. CAPTION: Picture, Terrel Bell: seeks to set up a foundation to retain nearly $11 billion in programs. AP