Harvard Staves Off Aid Cuts

Funding for higher education this year escaped the Congressional Republicans' budget-cutting axe.

And while financial aid officers at Harvard might have been somewhat inconvenienced, students should expect no major ramifications from the Congressional debates, officials said.

Despite much-ballyhooed pledges to scale back federal student loans and grant programs, higher education funding levels will remain the same, according to Director of Financial Aid James S. Miller.

Almost all direct loans, seven to eight percent of scholarships and about half of student jobs at Harvard are funded with federal money, Miller said, so the University took the threat of cuts very seriously.

Top University administrators, including President Neil L. Rudenstine, pleaded their case before Washington legislators. Students across the country also rallied to the cause, using demonstrations and petitions to encourage representatives to maintain funding.

Robert M. Shrireman, legislative director for Sen. Paul M. Simon (D-Ill.), said those efforts were largely responsible for staving off the cuts.

Possibly one of the most significant federal financial aid changes to result from this year's battle was, in fact, an increase in funding.

The maximum level for federal Pell Grants was raised by $100 to $2,440.

Overall funding levels for student loans are set to increase over the next several years, work-study funds will be maintained and Supplemental Educational Opportunity Grants will remain untouched.

But the government's inability to pass a year-long budget for fiscal 1995-96 prevented institutions from providing accurate, timely financial aid packages to their students.

In January, the Department of Education said it would have trouble processing its Free Federal Application For Student Aid (FAFSA) forms on time because of federal government shutdowns.

The funding of federal activities through a series of continuing resolutions also meant that the projected levels of federal funds available for higher education varied almost monthly, sometimes reflecting huge budget cuts if projected over the entire year.

Although students were affected by the delay in processing applications and distributing grants, Harvard was able to able to fund scholarships by drawing on reserve funds from its endowment, Miller said. Harvard also uses the College Scholarship Service's Financial Aid Form (FAF) rather than FAFSA, he said.

"We've been aware of the problems and [have] been able to help the students," Miller said. "So far it has been an irritation and nothing more."

Capping Programs

Far worse would have been an attack led by House Republicans, who threatened to cap the Department of Education's Direct Student Loan program, from which Harvard's loan funds are processed, at 10 percent of total loan funds.

Approximately 31 percent of total student loans are funded through this program, according to the federal General Accounting Office.

But after a lengthy political squabble, funding for the program was left virtually untouched.

Miller said Harvard will have to go through less direct means to get federal funds under the new system.

"We like the direct lending program," Miller said. "Administratively it's much simpler, and it allows us to get aid to students much easier and faster."

Some in Washington, however, still maintain that cutting funding for student financial aid is in the best interest of students.

"I remain convinced that a balanced budget will also provide enormous benefits for students, as it will result in lower interest rates for future student loans," said Sen. Pete V. Domenici (R-N.M.), head of the Equal Employment Opportunity Commission.

Since the threat of cuts appears far from over, the University will continue lobbying lawmakers to protect student aid from future cutbacks, according to Nan F. Nixon, director of governmental relations.