The Reagan administration's new budget to be unveiled next week would convert the Department of Education into a new Foundation for Education Assistance and reduce overall aid to education from nearly $13 billion now to less than $10 billion next year, government sources said yesterday.
President Reagan will propose deep cuts in some of the most popular education programs, including so-called Pell grants for needy college students, guaranteed student loans and Title I aid for low-income elementary and secondary students, the sources said.
According to these sources, Reagan will suggest cutting Title I assistance from nearly $3 billion this year to less than $2 billion in 1983. The president will propose cutting Pell grants from $2.3 billion to $1.4 billion, and reducing guaranteed student loan expenditures from about $3 billion this year to $2.4 billion next.
Just a year ago the federal government was spending $15 billion on aid to education. Thus, counting the effects of inflation, the Reagan proposals would amount to a cut of nearly half in just two years.
The education portion of the forthcoming budget became available as a House subcommittee, in the first budget skirmish of the year, approved a $2.3 billion supplemental appropriation the administration had requested for unemployment funds, then added money the White House opposed to help poor people pay their heating bills. Details on Page A7
Education is one of the hardest-hit areas in the budget the president will propose. White House counselor Edwin Meese III said on NBC's "Today" show yesterday that "for the most part" cuts the president will propose in social programs "are not cuts in the program, they're cuts in the increase in those programs . . . . " This is not the case with education spending, however, which Reagan will propose reducing absolutely by more than 25 percent.
For example, Reagan will propose cutting the billion-dollar aid program for education of the handicapped to about $800 million after incorporating it in a new block grant with vocational and adult education aid.
The president will also take aim at a perennial budget-cutters' target, the impact aid program for school districts serving children of federal employes.
Impact aid is significant for Washington-area school districts. Reagan will suggest cutting it from the current level of $440 million to $284 million next year, and then freezing it there indefinitely, according to a draft of portions of the budget obtained by The Washington Post.
The draft budget shows that Reagan will propose wiping out federal aid to libraries, a program that is getting $58 million this year. The president will suggest cutting aid to Indian education from $67 million to $47 million next year, and reducing federal assistance for bilingual education from $118 million now to $89 million in fiscal 1983.
The new foundation the president will propose would reduce the staff of the existing Department of Education from about 5,700 today to 4,800. This would fulfill Reagan's campaign promise to dismantle the Education Department as a Cabinet-level agency.
A spokesman for the Office of Management and Budget said yesterday that the documents obtained by The Post are not entirely up to date. Some figures have been changed in recent days, the spokesman said, including the overall figure the White House hopes to save from the big entitlement programs.
The Post's documents said the administration was aiming for $11.8 billion in entitlement programs next year, and sharply more than that in subsequent years.
The OMB spokesman also said the White House has changed its mind about how many new block grants to propose to consolidate and reduce the cost of existing grant programs to the states. The Post's documents said Reagan would propose eight new block grants, but that number has been changed, the spokesman said. He declined to say how many new block grants would now be suggested.
Here are some other highlights from the budget Reagan will propose next Monday, according to the draft documents obtained by The Post:
* The elimination of all government grants to the poor, schools and hospitals to pay for weatherization and other energy-saving investments. The president will propose cutting those programs from a current level of $64 million to $3 million in fiscal 1983 and nothing thereafter.
"Realistic energy prices have eliminated the need for much government spending on conservation," according to the draft budget documents. In fiscal 1981, the federal government spent $420 million on these programs.
* Sharp reductions in the Environmental Protection Agency's expenditures for "abatement, control and compliance." EPA will spend $230 million this year in grants to the states for these purposes, but Reagan wants to cut that to $184 million in 1983, a cut of 20 percent.
* Elimination of special federal development aid to Appalachia, which the administration has already cut from $292 million to $144 million this year. However, the White House will propose a new program of special aid for Appalachian highways totaling $79 million.