White House Meeting Acts on Student Loans

Harold Howe II, the U.S. Commissioner of Education, met with top banking and college officials at the White House this week to iron out conflicts over the administration's new student loan program.

The new aid system replaces the old National Defense Education Act loan program under which the government provided loans through individual colleges. Now students will arrange loans through banks, with state authorities or authorized private companies guaranteeing the loans.

In the past few weeks, college officials have voiced concern that the new program will not be ready by this Fall because of financial and administrative obstacles. An Atlanta meeting of Southern college scholarship officials, for example, last week urged the continuation of the current NDEA loan program for at least another year.

Bankers at the Tuesday meeting protested that they were not immediately prepared to produce the $200 million needed for the loans. In addition, many state legislatures will not be meeting in time to establish public guarantee companies or to authorize private ones.

The all-day White House conference came up with several possibilities for temporary solutions to these problems, all of them variations on the guaranteed loan concept rather than extensions of the NDEA system.

The proposals include temporary state loan authorities and combinations of several banks as loan sources. The federal government was suggested as a temporary guarantor; it is now empowered to guarantee loans only if state credit is inadequate. All of the meeting's proposals were tentative, and are now being studied privately.

Other problems still to be ironed out in the new loan program as it currently stands include:

* whether home town or college town banks, or both, would provide the loans,

* whether the colleges would be informed of the loans' terms.

* whether the colleges will have any say over the extent of each student's need for a loan.

A report of the proposals devised at the White House meeting will be presented Monday to the meeting of the Commission on Federal Relations of the American Council of Education in Washington. This meeting will also tackle the problem of bridging the time gap until the guaranteed loan program can be fully established.