Rudenstine Speaks On Finances in D.C.

WASHINGTON, D.C.--President Neil L. Rudenstine addressed the challenges of keeping college affordable in the face of rising costs and a weak national economy yesterday at a National Press Club luncheon.

In the speech, which was attended by more than 200 area alumni and members of the Washington press corps, Rudenstine urged the strengthening of "a national partnership" between the federal government, colleges, the private sector and families.

He called on the federal government to provide "a more simplified, comprehensive, and broadly accessible national network of financial aid," citing some of the programs in last summer's Higher Education Reauthorization Act as a positive step.

The Act initiated a broader grants and loans program and authorized a pilot program of "direct lending" that allows some colleges and universities to lend federal dollars directly to students, thus streamlining the loan process.

Rudenstine, whose remarks were televised on C-Span and broadcast on National Public Radio, also expressed support for a feature of President-elect Clinton's proposed National Service Trust Fund varying the schedule forrepaying student debt, depending on income aftergraduation.

Clinton's plan "deserves a serious look,"Rudenstine said. "This idea has promise, but italso needs careful evaluation, both from economicand other points of view." "A pilotapproach--building on our experience with prior,smaller scale programs seems in order," he added.

While it is incumbent upon colleges to controlcosts and moderate the growth of fees, collegesalso face very "peculiar" economic problems,Rudenstine told the audience.

Colleges face the very difficult challenge ofkeeping costs down in an enterprise that purchasesgoods and services whose prices increase at ratesmuch higher than inflation--goods such as newcomputer systems and physical plant renovations.

Thus with most families' personal incomesgrowing at a rate lower than that of inflation,colleges need to reaffirm their commitment tofinancial aid when raising funds, he said.

Rudenstine criticized the trend among somecolleges of awarding merit-based scholarships toparticularly desirable students, regardless ofeconomic background. Rudenstine warned against aconcentration of scholarship dollars that "couldleave us with a much less equitable and lesscost-effective system, with more aid going tofewer students, and less available to those withreal needs."

"We must cling to the need-based aid system andget other institutions [to do so], otherwise we'regoing to ruin ourselves," said Rudenstine.

Rudenstine, who earlier said that he had gaineda "slightly vivid sense of confronting the costsof higher education" by sending three children toprivate colleges, called on parents to save fortheir children's education