Senate Committee Considers Paring Federal Student Loans

Proposed Tax Would Cost Harvard $8.4M Over Seven Years

Following months of anticipation, the GOP could turn its budget axe on federal student loans today.

After delaying action yesterday because of protest, the Senate Labor and Human Resources Committee is poised to consider a package today that would slash $10.1 billion in federal student loans and impose a tax which would cost Harvard an additional $1.2 million annually over the next seven years.

"None of the proposals are favorable to Harvard or higher education," said Vice President for Government, Community and Public Affairs James H. Rowe III '73 of the debate over federal aid.

The chief component of the Republican proposal would require colleges to pay a two percent fee on all federal loans. For Harvard, that would amount to about $1.2 million each year.

"It's one of the worst decisions they could make," said Marcine D. Perry '99, who receives federal aid. "We're the future. They're completely cutting themselves off at the knees."


Director of Undergraduate Financial Aid James S. Miller said the financial aid staff hasn't met to decide where that money would come from, or whether it would result in Harvard decreasing the amount of aid it offers students.

"No college I know of has a million dollars lying around," said Miller. "It could have a big influence. I don't know which pot it would come from--it's something we need to worry about."

The Boston Globe reported yesterday that the GOP proposal, introduced by Committee Chair Sen. Nancy I. Kassenbaum, (R-Kan.), targets federal PLUS loans as well, increasing interest rates by 0.9 percent. These loans are used by parents to pay for nontuition costs.

Kassenbaum is also aiming to slice another $1.15 billion by lowering the volume of direct student lending.

Republicans say that the cuts are necessary to reduce the nation's debt and are the best thing the government can do to invest in the future of America. Democrats, most notably Kassenbaum's predecessor as committee chair, Sen. Edward M. Kennedy '54-'56 (D-Mass.), yesterday decried the move.

Miller explained that this cut could force a number of schools to look elsewhere for funding. He said, however, that he doesn't expect Harvard to be targeted.

Although Kassenbaum's package represents the first comprehensive proposal to cut federal student loans, both houses of Congress have been considering and discussing potential cuts for months.

Pell Grants

Despite a Congressional vote raising the maximum Pell Grant by $100, the House has since proposed to raise the minimum Pell Grant from $400 to $600. Since Congress has not allotted more money to the program, the shift would raise the threshold of need, providing larger grants to fewer students.

Miller said such a move could strip approximately 100 Harvard undergraduates of such grants.

"There are those of us who need financial aid to better ourselves," Perry said. "Cut other programs."