NEW LOAN PROGRAM

To the Editors of The Crimson:

It is important that the record on the new student loan program be both straight and correctly understood by all those affected. Therefore, I offer the following, largely as amplification of the somewhat misleading article appearing in the Crimson on Wednesday, October 11th.

Several elements are integral to the new loan program. A graduated repayment schedule and an income protection provision are intended to avoid hardship among those borrowers who receive low incomes after graduation. The possibility of federal insurance means that significantly greater resources for loan funds are available inside (and potentially outside) the University. Any move to draw upon these resources requires that loan notes be written at 7 per cent interest.

Borrowers with adjusted family incomes of under $15,000 (and we estimate that this group will include approximately 75 per cent of the undergraduate borrowers) will have interest paid on their loans while they are in school, graduate school, military service, or ACTION. Only those from families with higher incomes (gross incomes of approximately $19,000 or more) who are being supported by their families will pay the 7 per cent interest from the date of the loan. It was decided that University subsidy money, which could have been spent on this group, was better invested in alleviating hardship for those borrowers unable to make their regular repayments after graduation because of low incomes. Please note that even the borrowers who are not eligible for the interest subsidy in college may qualify for the low income protection provisions of the plan after graduation. They are also eligible for the forgiveness, option after successive years of low income.

The impression left by your article that this plan, was not adequately publicized belittles even the Crimson's role. Your reporters were present at two University press conferences in the spring (and asked some very incisive questions). I spent as much time as requested to help with several articles that appeared in spring issues, and I call your attention especially to Steven Reed's fine article in the Commencement Issue. There was no secrecy, and we spent long hours with students interested in different provisions of the proposed plan.

Since the announcement of this plan by Harvard, colleges and universities from all parts of the country have been writing for information and background materials. Similar plans are being formulated by many schools for next year, and there is a kind of developing consensus that some such plan is the most advantageous for student borrower. I recognize the constraints of time and space in your reporting, but they should not eliminate clarity or information essential to a balanced account. R. Jerrold   Director, Univ. Student Loan Office