Enter to Grow in Debt: Financial Aid at Harvard

The entrance to Harvard Yard asks students to "Enter to Grow in Wisdom," but Debt, rather than Wisdom, might be a more appropriate admonition. In April the Class of '83 received its elegant invitations to attend Harvard and those who accepted took on a financial burden that soon will total at least $40,000. If present trends continue, more than half Harvard's students will not be able to pay the full amount and will receive some form of aid. Harvard has continued to marshal its considerable internal resources to allow all qualified students to attend the University. These days, however, Harvard is increasingly looking to the federal government to reduce the importance of money in determining the company of educated men.

University administrators are particularly concerned with making a Harvard education available to middle-income students. Upper income families have always been able to provide for themselves, and universities and the government have often tried to help poorer students obtain educations, but the class now defined by income levels between $20,000 and $50,000 has largely been ignored. Harvard's attempts to ease the burden on the middle class rely on a combination of loans and student employment. Administrators are now encouraging middle-and lower-income students to help themselves by seeking jobs of their own, chiefly through the expanding college Work Study Program. As one administrator says, "You never have to pay back a job"--a reference to the legacy of debt that often accompanies an education.

But direct aid is still the primary function of the office of financial aid. About 2200 Harvard and 950 Radcliffe students received some form of aid this academic year and this amount will increase in 1979-80. Total direct aid to students, excluding loans and student employment, will reach about $9.9 million next year, topping this year's record total by about $700,000.

Recently Harvard's biggest gains have come in the federal sector--a welcome, if uncertain, windfall. A Congress intent on budget-cutting could slash aid to education any time and administrators remain wary of relying heavily on the federal funds. But for this year, the Middle Income Student Assistance Act that Congress passed in October 1978 should double both grants to students and federal work-study projects at Harvard. As R. Jerrold Gibson '51, director of the office of fiscal services, says, "it's the biggest increase for federal aid to education ever--you can't knock that."

One area that Congress cut in this year's budget and one that might decline or even disappear in future years is the National Direct Student Loan program (NDSL), an alternative that offers students loans at 3 per cent interest, as opposed to the 7 per cent Harvard charges on its own loans. Across the nation, NDSL has been plagued by students defaulting on their loans, and Congress dislikes the program. Nor did a 60 Minutes expose of the NDSL's problems in the fall help its reputation. Next year, Harvard will receive $440,000 in NDSL funds, 26 per cent less than this year's allotment. However, Radcliffe will get more because this year's allocation was unnaturally small, after Radcliffe failed to loan out all the 1977-78 funds. Martha C. Lyman, director of financial aid, says, "It's not the end of the world when we don't get NDSL money. Some people will just have to take out per cent loans," instead of the 3 per cent of fered by the NDSL.

Lyman says that "most students don't even know what kind of loan they have," adding that she has actually had to recruit people to take the NDSL.

Lyman says cuts in federal aid programs will hurt Harvard and Radcliffe less than many smaller institutions because the University has two other areas from which it can draw financial aid resources. Income from restricted private grants from 300 separate accounts approaches $3 million annually, and the office of financial aid supplements these funds with money from the Faculty of Arts and Sciences. Lyman says she hopes she can reduce the dependence on the FAS funds. Despite the significant increase in awards for next year, FAS will supply in 1979-80 the same amount as it did in 1978-79, about $3 million of the $9.9 million total.

Within the framework of its financial aid operations, Harvard operates the Parent Loan Plan (PLP), begun with the Class of '80 which helps students with family incomes ranging from $15,000 to $50,000. The plan uses a variety of loans, grants and student work opportunities to allow parents to pay off their debts to Harvard in eight years of monthly installments. Administrators say the plan has increased the yield--the number of accepted students who actually attend--of middle-income students. Before the PLP the yield among students in this range was about ten percentage points lower than other groups, but the PLP has brought middle-income attendence closer to the overall overage of just over 75 per cent.

Harvard administrators, however, are building their hopes for financial independence on student employment. Congress has more than doubled funding for the College Work Study Program, granting $2 million to Harvard and $400,000 to Radcliffe in 1979-80. CWSP provides a subsidy of 80 per cent of students' salaries for jobs with non-profit organizations, including Harvard. Lawrence E. Maguire '58, director of student employment, says the program has doubled in the past three years and probably will double again next year. CWSP funds are available only to students on financial aid. About 1500 Harvard and Radcliffe students took jobs under the program in 1978-79. Maguire says that work study has become "a spearhead into the community--because of the 80-20 split, employers like it." Gibson adds, "work-study reduces the debts students have to pay because it's not a loan and it is an opportunity for the students to get real work experience. They can work in areas of their vocational interest." Both Gibson and Maguire note that students have not yet taken full advantage of work possibilities in the community, since they tend to work in the University, but both hope to expand community employment next year.

Though costs of a Harvard education have followed inflation's upward surge, aid to the increasing number of students who need it has risen as well. Reliance upon student employment represents a realization by both the University and the students that Harvard will not bear the burden of increasing costs alone; students get the money and Harvard gets the service. And students seem willing to take the jobs. Lyman notes, "There are people who can do it. We have more people applying and more people here than ever before. That has got to mean something." With a tenuous balance among University, federal and student funds, a Harvard education remains within the reach of most qualified applicants. But maintaining those opportunities will test the fiscal juggling abilities of Harvard administrators and students in the years ahead.