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It was only a matter of time before the government's budget-cutting shears sliced into student aid programs, and they did this summer.
In a move that Congressional Budget Office analysts estimated could save the government $3 billion in the next five years, the Senate passed a bill making it more expensive for students to receive Guaranteed Student Loans (GSLs).
Currently, the government subsidizes interest payments for all students with GSLs for the time they are in school.
But under the new legislation--passed as an amendment to a $36-billion higher-education bill-interest will start collected at a rate of 9 per cent (up from 7 per cent) from the time the student takes out the loan. In other words, no more subsidies.
The House did not include a similar amendment in its higher education bill, and a conference committee will work out the difference some time next month.
Harvard financial aid officials said it was not clear how the new rules, if authorized by the full Congress and signed by President Carter, would affect students with GSLs.
In another cost-cutting move, students with Basic Education Opportunity Grants will receive $50 less than expected from the government due to a change in Education Department rules. But Harvard financial aid officials said the University will make up the difference.
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