New Brandeis Loan Program Called 'Risky'

A new law passed by the State Legislature will allow Brandeis University to implement a new approach to student loans this fall that could save parents as much as $4000 over four years but Harvard financial officers consider the policy to risky to use.

The Brandeis plan will make use of a newly-created State Student Loan Authority to secure tax-exempt bond issues for schools, thereby increasing the amount of money they can offer students in loans.

Parents of next year's Brandeis freshmen will have the option of borrowing up to 75 percent of total college costs for four years. Brandeis will guarantee parents using the loan plan against tuition increases during the four years

"It's a gamble," said Norbert J. Kornyei, director of financial operations at Harvard. "They're betting on the ability to earn more money on the amount that a parent pays up front than the amount of the tuition increase," he added.

Because of this, it is unlikely that Harvard will ever often such a plan, Kornyei said.

Brandeis financial analyst Richard A. Robbins said in a telephone interview this week that the University hopes that the plan, which is geared to help the middle-income parent, will boost enrollment. "If we have a plan that is affordable, we think that people will choose Brandeis," Robbins said.