Financial Aid: Into the Labyrinth

When Harvard announced its $500 increase in tuition, room and board fees for this year, students took little consolation in the facts that the rate of increase has fallen since 1975 or that this is the first time in recent years that Harvard has not been more expensive than Yale. The $7500 price tag on a Harvard education this year means that the Class of '82 will have to spend at least $30,000 to stay here four years--more if fees go up again--which they undoubtedly will.

Harvard at least is wealthy enough to provide substantial financial aid to its students, and 60 per cent of undergraduates avail themselves of grants, loans and University jobs. Congress is trying to help out, too, and is currently debating two financial aid plans that would particularly benefit students from middle-income families who are not eligible for other Federal programs requiring greater financial need.

Harvard administrators are anxiously watching developments on Capitol Hill because either plan will provide more financial assistance for Harvard students. One proposed bill would ease college costs through a $500 tax credit, while the other would increase funding for existing federal financial aid programs and earmark some of that money specifically for middle-income families.

The question now is which aid package will eventually become law. Either option involves the largest one-time increase in federal aid to education since 1956; both packages carry about a $1.5 billion price tag. Clearly the aid bills are too expensive to enable both of them to pass, but Capitol Hill aides say Congress might pass both bills anyway and leave the choice up to President Carter.

Both the House and the Senate approved versions of the tuition tax credit this summer which would grant an income tax credit of up to $250 this year to college students or their parents and would raise the maximum amount to $500 in a few years.

The House version of the bill, however, includes a tax credit for parents of students in private and parochial elementary and secondary schools. The Senate removed this provision from its version of the credit in the midst of criticism that it would strike a death-blow to the already shaky public school systems and that a credit for parochial school tuition was possibly unconstitutional.

The House and Senate also differ on a number of other details about the administration of the credit. A House-Senate conference committee will try to resolve the differences between the two versions, but aides say they cannot predict when the committee would send the tax credit bill to Carter.

Carter has said he will veto the tax credit in favor of the College Opportunity Act, which expands existing Federal aid programs. The plan, similar to one Carter presented to Congress last fall, increases from $16,000 to $25,000 the maximum family income level for which the Basic Educational Opportunity Grant (BEOG) would be available, and boosts the maximum grant at each income level. The plan also adds more funds to the Supplemental Educational Opportunity Grant (SEOG), which is distributed to students by individual colleges, and to the College Work Study Program, which provides federally-subsidized jobs for college students. Finally, the plan would liberalize the Guaranteed Student Loan Program so that all students would be eligible for federally-subsidized low-interest loans no matter what their income level.

The Senate passed the College Opportunity Act in August by a wide 68-14 margin, but Rep. Jim Delaney (D-N.Y.) has refused to let the bill, called the Middle-Income Assistance Act in the House, out of the Rules Committee which he chairs. An aide to the Education Subcommittee of the Senate human resources committee says Delaney is a supporter of tax credits and fears the death of the tax credit plan if the Opportunity Act makes it through Congress.

Supporters of both proposals claim to have the solution that provides the most effective means to aid students in need. The tax credit people say the virtue of their bill is the simplicity with which taxpayers can claim the credit on their tax returns. The benefits from the Opportunity Act would go only to those who could fight through a tangle of complicated application forms. But the Opportunity Act proponents counter by saying that the Internal Revenue Service will have to set up a completely new bureaucratic network to administer the tax credits and collect much of the same data that the Office of Health. Education and Welfare already monitors. HEW, however, has come under fire recently for permitting rampant fraud and abuse of some of its financial aid programs.

Critics of the tax credit say that too much of its benefits would go to those who do not need tuition assistance. A Congressional Budget Office study released last January shows that while almost half of the money for the tax credit would go to families in the $10,00 to $25,00 range, as much as 37 per cent would go to those earning over that amount and only 13 per cent to families earning less. The Opportunity Act provides bigger grants to a more narrowly-defined group. Sixty-four per cent of the money added to the BEOG program would go to families with incomes of $15,000 to $25,000 with the rest going to families earning less.

R. Jerrold Gibson '51, director of the University's office of fiscal services, says the Opportunity Act would benefit Harvard students more than the tax credit because students at high-cost schools like Harvard are more apt to borrow money to finance their tuition payments and therefore need the expanded loan program. Also, a $500 tax credit hardly makes a dent in a Harvard term-bill whereas the different grant and loan programs can provide more meaningful amounts of aid for those students eligible.

Gibson says "some of the bloom is off the rose of the tax credit" as a result of a recent Roper Organization survey that shows that given a choice between expanded grant and loan programs and tuition tax credits, people prefered the expanded programs. A New York Times-CBS poll and a Gallup poll show, however, that the tax credit is more popular than expanded grants programs.

Harvard financial aid administrators are not sure yet how either aid plan will affect their offices, but in the meantime they continue to run the complex network of existing programs. To someone venturing into the financial aid office for the first time, the different aid programs, the paperwork they require and the number of people involved in processing the applications can be mind-boggling. Martha C. Lyman, director of the office of financial aid, admits, "We have yet to be as efficient as we would like to be." The different parts of the bureaucracy have gotten in each other's way in the past and have created problems that in recent years have particularly disadvantaged women undergraduates.

Last year, for example, tempers were imflamed among women when they discovered that as a result of Radcliffe's status as an independent institution from Harvard, male undergraduates were receiving a disproportionately large amount of funds in the work-study program, funds that the women could not share. The problem started when Radcliffe spent over half of its original work-study grant in the summer of 1977, leaving very little money for term-time employment. Harvard, however, started with a healthy work-study budget in the fall and made it even healthier in February by reallocating $250,000 of unused graduate work-study funds to undergraduate men. Women could not share in this windfall because Radcliffe is legally a separate institution from Harvard and losing that status would jeopardize $1 million in other grants Radcliffe receives.

In late spring, Harvard and Radcliffe administrators arranged with the federal Office of Education for an unprecedented transfer of work-study funds from Harvard to Radcliffe while protecting Radcliffe's separate status. The transfer of funds came too late to significantly equalize the percentage of men and women with work-study jobs, but Burton I. Wolfman, administrative dean of Radcliffe, promises that a transfer can be arranged earlier this year if need be.

Lawrence E. Maguire, director of student employment, expects to be able to fund work-study jobs this year for about 600 undergraduate men and 200 women, although more may be able to take jobs as the year progresses. The percentages of men and women on financial aid who can take work-study jobs are therefore still unequal, and Maguire says he is not sure what will be done about it.

Radcliffe also suffered a 45 per cent cut in its federal grant for the National Guaranteed Student Loan program which provides federally-subsidized loans to students at an interest rate of only 3 per cent. This mix-up stemmed from the academic year 1976-77 when NGSL funds were denied to freshmen men so Harvard would have enough NDSL funds to continue the low-interest loans to upperclassmen. Radcliffe had plenty of NDSL money for all undergraduate women, but a number of freshmen women thought they too were ineligible and did not apply for the loans. When it was too late, administrators realized that Radcliffe would not be able to spend all of its NDSL grant, and this year Radcliffe is paying for the under utilization to the tune of $62,000.

Lyman says, however, that Radcliffe will be able to continue NDSL loans for upperclass women and will use Radcliffe loan funds to provide 3 per cent loans to freshmen women who would normally qualify for NDSL loans. Lyman says that it will be a cumbersome program to administer because Radcliffe has four separate loan funds, none of which has enough money to provide loans for all the freshman seeking NDSL funds. In addition, one of the funds was set up with the stipulation that it be used only for Jewish women and another only for Protestant women, creating yet another bureaucratic headache.

The financial aid office plans a meeting this fall for all new students on financial aid and another just for new foreign students on financial aid to explain the different programs. Lyman says the key to negotiating her office is not to come in the beginning of the year when the office is swamped with students, but to make an appointment with a financial aid officer. Maguire says notices of work-study eligibility will be mailed scon, and work-study job openings are already beginning to come into his office.CrimsonLisa C. HsiaYour money or your life.