Do the high court's tight strings on federal loans for students hamstring the colleges?

It's time somebody said it: Grove City College got a bum rap. Here's a small, sedate, private, church-related school nestled in the rolling hills of western Pennsylvania which - up to 1977 - barely got mention in the local scholastic pages, much less the national news media.

But that all changed when Grove City bucked the federal government and refused to sign a compliance form asserting that it did not discriminate on the basis of sex. Such agreement is required under Title IX of the Education Amendments of 1972, which prohibits sex bias on the part of schools that receive federal funds.

Grove City made it plain from the start that it never engaged in discrimination of any kind. This practice would be inconsistent with its religious orientation and moral values. Second, it stressed that it shunned all direct public funds as a matter of principle. Some of its students, however, did receive personal federal grants and loans, which they used to pay tuition.

And there's rub. The government's position: Any federal money used for educational purposes at a college or university is considered direct aid to the school. Hence a compliance order was required. If Grove City didn't sign, its students were out of the money. The dispute ended up in court and ultimately wound its way to the Supreme Court.

In the eyes of the college, the main issue was whether public aid to a student - through direct grants or loans - actually constituted aid to the school attended. School officials said it did not. The high court disagreed. And liberals cheered that this would force all those who would try to circumvent antidiscrimination requirements to toe the mark.

However, taking a lead from a Reagan administration stance - that anti-bias laws must be confined to specifics - the court also ruled that only those educational programs within a school that receive public money are subject to federal regulations on sex discrimination. Others, at least theoretically, can do as they please. This part of the ruling brought groans from civil libertarians, who rushed to Congress to try to get sweeping legislation that would, in effect, nullify the Supreme Court's ''program specific'' decision. The concern: Discrimination would be openly practiced in academic and extracurricular areas where federal money wasn't involved.

The proposed Civil Rights Act of 1984, which liberals and conservatives are now embattled over, would place an entire school, organization, or civic group under federal scrutiny mandated by antidiscrimination regulations if any of its programs - or students - accepted any public money. And this federal reach would extend not only to sex discrimination but to all sorts of bias.

Backers of the proposal say this strong type of law is needed to close up any loopholes that now exist in antidiscrimination regulations as a result of the recent Supreme Court decision. But opponents, including the Reagan administration, see this legislation as overkill. And the attorney general's office says it is so broad based that it would be impossible to enforce.

Where does Grove City fit into all this? Again, it's caught in the middle. School officials say the institution, as a result of national publicity over the case, has received a black eye. Many people wrongly associate Grove City with discrimination. Further, since the school still won't sign federal compliance forms, its students are not eligible for federal grants and loans. But money from private sources is being raised to replace the federal funds. And Grove City's incoming 565 freshmen - now taking part in summer weekend orientations - are being assured the funds they need will be available.

Charles S. MacKenzie, Grove City's president, insists: ''We have never discriminated, and we're not going to discriminate. It's strictly a matter of remaining free of government interference.''

Of course, the nondiscrimination stance is basic. Discrimination, whether tied to government grants or not, is morally wrong. But there is also something to be said for being free from excessive federal intrusion in the private sector.

Affidavits or compliance agreements don't, in and of themselves, ensure ethical action. Commitment does. Grove City has paid a great price for holding to its principles. Perhaps we need to find a way, without being naive, to trust the Grove Cities until we have evidence they don't deserve that trust.

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