Education Act Clears Senate; Will Increase Aid

After a wave of financial aid increases swept America's top colleges, Congress got into the act yesterday in a big way, approving a bill that will make paying off student loans easier for college students and graduates nationwide--including Harvard students.

The Higher Education Act, a mammoth piece of legislation that spends much of its 700 pages on increases in student aid, cleared the Senate yesterday afternoon after getting House approval Monday. President Clinton is expected to sign the bill into law.

The bill is a five-year renewal of higher education policy, and Harvard had worked hard to put its own stamp on the finished product. The University's Washington lobbyists worked overtime on certain points of the bill, and President Neil L. Rudenstine sent five different letters aimed at persuading alumni and Massachusetts delegates on Capitol Hill.

And those efforts paid off. Last spring an amendment to the bill that would have ended affirmative action in higher education was defeated after an intense lobbying effort by Harvard and higher-education advocacy groups. Last week, partly in response to Harvard's prodding, Senator Edward M. Kennedy '54-'56 (D-Mass.), snuck in an amendment which will allow some students nationwide--and many Harvard students--to save money by refinancing their student loans.

The act also made it possible for schools to tell a student's parents if the student broke state or federal laws or school policy on drug abuse, and requires colleges to keep a daily crime log open to the public. It also expanded the definition of "hate crimes" on campus to include acts based on gender or disability.

Harvard students will be affected by a number of the bill's provisions:

* Students who become teachers will begin to have their student loan debts forgiven after three years of teaching. After six years, their debt will be forgiven completely.

* The interest rate for all new student loans will be cut from 8.25 percent to 7.46 percent. According to the American Council on Education (ACE), this will save the national-average student borrower

about $700 over a ten-year repayment period.

* All students receiving "direct lending" loans--meaning loans directly from their University--will be able to consolidate and refinance their loans at the lower rate during a four-month window ending February 1. Since Harvard does direct lending, many current students and graduates of the University will be able to take advantage of this measure, added by Kennedy at the eleventh hour.

* An increase in the maximum authorized amount of money available in Federal Pell Grants, from $3,000 this year to $4,500 in 1999-2000, and increasing annually after that. By the final year of the bill, a student could receive as much as $5,800 in Pell Grants. However, Congress has not yet authorized funding for future Pell Grants.

* An increase in the amount of money students can earn and still be eligible under Federal guidelines for financial aid. For independent students--receiving no financial help from their parents--that number was bumped from $3,000 to $5,000. For dependent students it was increased from $1,750 to $2,200.

* Federal offices tracking student aid will be reorganized, replacing a number of separate systems with a new streamlined program modeled after the efficiency and openness of a credit-card company.

Although Harvard staff and Rudenstine are called on more than others in higher education to act as expert witnesses in Congressional debates, Harvard does not always get what it wants in Washington.

The University won victories in the debates over affirmative action, interest rates, voluntary retirement incentives for staff--now definitely legal--and a measure that makes it easier for community-service organizations to hire work-study students.

However, it came up short in the debates over increasing flexibility of student loans and a blanket ability of students to consolidate and refinance their loans at the lower rate.

The ACE counts Rudenstine among its board members and often uses Harvard as a mouthpiece. Last week its leaders had expressed concern about loan refinancing and the provision--still in the final version of the bill--which says that even if graduates go bankrupt, they still must pay their student loans.

"We think that's a pretty punitive provision," said Terry Hartle, ACE vice president.

Hartle said the ACE was unhappy with some of the act's provisions, but it had come out better than the ACE had expected in a conservative and budget-conscious Congress.

"Throughout the process [of passing the bill] there had been any number of things popping up which would have made the bill completely unacceptable," he said. One of these additions was the anti-affirmative action amendment that Rudenstine helped defeat.

"Those sorts of things...simply didn't happen," Hartle said

about $700 over a ten-year repayment period.

* All students receiving "direct lending" loans--meaning loans directly from their University--will be able to consolidate and refinance their loans at the lower rate during a four-month window ending February 1. Since Harvard does direct lending, many current students and graduates of the University will be able to take advantage of this measure, added by Kennedy at the eleventh hour.

* An increase in the maximum authorized amount of money available in Federal Pell Grants, from $3,000 this year to $4,500 in 1999-2000, and increasing annually after that. By the final year of the bill, a student could receive as much as $5,800 in Pell Grants. However, Congress has not yet authorized funding for future Pell Grants.

* An increase in the amount of money students can earn and still be eligible under Federal guidelines for financial aid. For independent students--receiving no financial help from their parents--that number was bumped from $3,000 to $5,000. For dependent students it was increased from $1,750 to $2,200.

* Federal offices tracking student aid will be reorganized, replacing a number of separate systems with a new streamlined program modeled after the efficiency and openness of a credit-card company.

Although Harvard staff and Rudenstine are called on more than others in higher education to act as expert witnesses in Congressional debates, Harvard does not always get what it wants in Washington.

The University won victories in the debates over affirmative action, interest rates, voluntary retirement incentives for staff--now definitely legal--and a measure that makes it easier for community-service organizations to hire work-study students.

However, it came up short in the debates over increasing flexibility of student loans and a blanket ability of students to consolidate and refinance their loans at the lower rate.

The ACE counts Rudenstine among its board members and often uses Harvard as a mouthpiece. Last week its leaders had expressed concern about loan refinancing and the provision--still in the final version of the bill--which says that even if graduates go bankrupt, they still must pay their student loans.

"We think that's a pretty punitive provision," said Terry Hartle, ACE vice president.

Hartle said the ACE was unhappy with some of the act's provisions, but it had come out better than the ACE had expected in a conservative and budget-conscious Congress.

"Throughout the process [of passing the bill] there had been any number of things popping up which would have made the bill completely unacceptable," he said. One of these additions was the anti-affirmative action amendment that Rudenstine helped defeat.

"Those sorts of things...simply didn't happen," Hartle said