Government Loan Squeeze

THE NIXON Administration's proposal to cut interest subsidies on federally-insured student loans constitutes a serious threat to middle-income families. The administration has neglected the middle class's pressing need for financial aid to meet sky-rocketing tuition increases.

Once approved, the administration's proposal could halt federal interest benefits to half a million students from middle-income families, and in so doing will affect 50 to 60 percent of Harvard's scholarship students and 32 per cent of Radcliffe's financial aid recipients.

Nine major private universities (including Harvard) have sponsored more sensible and realistic legislative proposals, designed to increase the amount of federally-insured funds available to undergraduates. The so-called Sloan Report urges a gradual repayment plan, a long-term loan system, and a lower cut-off level for federal interest benefits. Rapidly rising tuition and room and board fees lend support to these suggestions and emphasize the absolute impracticality and inequity of loan cut-backs proposed by the Nixon administration.

The universities have rightly advocated a return to the pre-1972 loan system, under which any student, regardless of family income, can obtain a federally-insured loan. The nine universities have in addition suggested a higher income cut-off level for the interest subsidy program to take into account inflation.

Congressmen would do well to scrutinize a bill introduced recently by Rep. James G. O'Hara (D -Mich.) that incorporates many of the suggestions of the Sloan Report. The bill will allow families with up to $20,000 in annual income to qualify for interest subsidies. The bill would also permit students to borrow up to $2000 a year, an increase of $500 over the current loan ceiling.

Although the bill's expense is admittedly a large one, the continued guarantee of student loans would lessen the financial burdens middle-income families have been forced to face.

The administration's proposal would do little but aggravate the already severe financial squeeze of middle-income families. Unless provided with continued aid, those families could very well find themselves priced out of higher education in the future.