Divvying up the school dollar. Federal funds focus on aid to disadvantaged

WHEN dust clears from the current House-Senate conference, the federal education budget will show that Washington is stepping up its commitment to disadvantaged students. Call it election-year politicking or a change in priorities, the Reagan administration for the first time asked Congress for a major increase in education funds - $21.2 billion for fiscal year 1989. Congress will likely increase that amount slightly and shift more funds to aid the disadvantaged. The budget is expected to clear Congress this month.

Mindful of concern over the nation's economic competitiveness, the need for an educated work force, and demographics showing a growing underclass, lawmakers are crafting a fiscal 1989 budget focused on programs that serve at-risk students. The House, for example, appropriated $4.7 billion for Chapter 1 (remedial aid to disadvantaged students, the largest federal program), a $336 million increase over fiscal 1988; the Senate appropriated less, $4.6 billion.

In addition, House appropriations call for funding a host of smaller ($5 million to $25 million) strategic programs for the disadvantaged - for preschool and early elementary grades, migrant and homeless children, and college-bound students. The Department of Education's budget request, submitted last January, was $800 million more than Congress appropriated for fiscal 1988 and $6.1 billion more than its 1988 request. ``The administration finally sent up a budget that we couldn't reject on delivery,'' says Ellin Nolan, minority staff director of the Senate Subcommittee on Education, Arts, and Humanities.

The upward trend in the education budget will continue through the new administration, according to Gov. Michael Dukakis and Vice-President George Bush. Both candidates have vowed, despite deficits, to boost the education budget.

Governor Dukakis proposes a $250 million National Teaching Excellence Fund to attract and retain the best teachers through scholarships, loan forgiveness, and creation of a national teacher corps. He also proposed a $25 million adult literacy corps and self-supporting college tuition prepayment and repayment plans. Funding the teacher corps is a first-year priority for Mr. Dukakis, says Thomas D. Herman, deputy national issues director for the campaign.

Vice-President Bush proposes a $500 million-a-year National Merit School Program for significant improvement in schools serving primarily disadvantaged students. He would also give the states $50 million for experiments in school reform. The merit program is a first-year priority, a senior aide to Mr. Bush says.

By making education a high-profile campaign issue, the candidates ``are very much in accord with public sentiment,'' says William A. Galston of the Roosevelt Center, a nonpartisan public-policy think tank in Washington. ``There is a very broad public consensus that education is increasingly important to the nation's economic future and to job opportunities for young people,'' he says.

``Education certainly will be one of the most talked-about issues'' in the new administration, says John Jennings, counsel to the Education and Labor Committee of the House. But he and other key congressional staff members say they doubt education will receive more funding, considering the $2.5 trillion budget deficit. ``Even the best-intentioned programs won't get funded with that legacy,'' Mr. Jennings says.

Any new programs funded by Congress, insiders say, would probably focus on early childhood education, especially for disadvantaged children. Research showing the benefits of preschool programs for at-risk youth is ``creating real pressure'' for funding from Congress, says Ms. Nolan.

The new administration can request budget changes for fiscal 1989 and '90, but insiders say the '89 budget will likely remain intact. They say new administration programs may not be funded until fiscal 1991, given Congress's slow budget process.

According to a recent report by the Congressional Research Service, federal spending for education increased 40 percent from 1980 to 1988, but decreased 8 percent when adjusted for inflation. Since 1980, the federal share of the nation's $310 billion education budget has decreased from 9 percent to 6 percent.

The federal education budget has grown rapidly since the Great Society era of President Lyndon Johnson. It has more than quadrupled since 1967, when Washington spent $4.5 billion on education. The most significant change has been the acceptance of federal aid, especially for programs serving the disabled and the disadvantaged.