This seventh hearing in a series related to the reauthorization of the Higher Education Act focused on the management structure of the Office of Postsecondary Education and the financial aid delivery system. In the opening statement, Chairman James M. Jeffords reported that the current system is outdated and inefficient and indicated that the committee was considering proposals for change that ranged from a performance-based system to privatizing student aid delivery. Testimony was given by David A. Longanecker and Betsy Hicks of the Department of Education who noted progress made in managing student financial aid programs and addressed changes still to come. Other witnesses included Brian Fitzgerald of the Advisory Committee on Student Financial Assistance (Washington, D.C.); Cornelia M. Blanchette of the U.S. General Accounting Office; Judith Flink, University of Illinois; Barmak Nassirian, American Association of State Colleges and Universities (Washington, D.C.); and Barbara Tornow, Boston University (Massachusetts) who all testified on the inadequacy of the present financial aid delivery system and its management structure. The document also contains transcripts of oral discussions and prepared statements by Senators John Warner (Virginia) and Christopher Dodd (Connecticut). (CH)