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Harvard will maintain the graduated repayment plan for Federally insured student loans despite the recent U.S. Office of Education ban, R. Gerrold Gibson, director of the University Loan Office, said yesterday.

The Office of Education recently dropped the graduated repayment plan in favor of the equal installment program.

Gibson said that Harvard, along with a coalition of universities, will attempt to coerce the Office of Education to change its present stand. He said that should this tactic fail, the University will send a lobby to Washington to encourage legislation leading to the ban's repeal.

He said that the equal installment loan program, by requiring a uniform annual payment over ten years, does not account for the relatively low income a recent graduate is expected to earn. It forces the heaviest financial burden on the first years after graduation which, in turn, makes a student more liable to default on his loan, he said.

Although the Nixon Administration has raised the ceiling on debts incurred by its insured loans from $5000 to $7500, the present program sets an "effective limit" on loans, Gibson said.

He said he felt that the relatively high annual installments--aggravated by a heavier loan--is too much for a recent graduate to be expected to pay. The University would be forced to set its own ceiling on loans in the student's own interest, he said.

The graduated repayment program relieves the financial crunch by allowing students to make annual installments that are adjusted to their expected future income.

Financial considerations are prodding the government to object to this plan of payment, Gibson explained. In case of default, the graduated installments would create a greater outstanding balance which the government would be forced to absorb.

"As far as the government is concerned we will be giving equal installment loans. But as far as the student is concerned we will be giving graduated repayment loans. The University will make up the difference between the outstanding balances in case of default," Gibson said.

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