THERE is a popular myth that the Ivy League is the last bastion of the wealthy elite. In fact, between 40 percent and 50 percent of undergraduate students in the eight Ivy League schools are exceptionally bright, able young people whose pocketbooks cannot keep pace with their SAT scores. For example, 50 percent of the first-year class at Columbia University in New York received financial aid.
The erroneous image of the Ivy Leaguer has done much to restrain the potential of America's young achievers. Many never apply to top colleges because they think they can't afford the high costs. UCLA reports that 30 percent of students nationwide chose their college because of low tuition, up from 23 percent just two years ago.
The federal financial aid system is largely to blame. Twelve years ago, the federal government was giving students a boost over the ivy wall, but today it is a difficult scramble. As a result, colleges and universities have tightened shrinking budgets in order to double or triple the amount of money they provide to financial-aid recipients.
The Ivy League is not immune from such pressures. Last year, Columbia faced the possibility that it would have to deny admission to certain students who couldn't afford to pay. (Those turned away might have resembled the 18-year-old Bill Clinton in 1964: bright, enthusiastic, and short on cash.) Luckily, Columbia managed to preserve need-blind admissions and full-need financial aid, but only provisionally. We must find another way to pay for college.
President Clinton's national service proposal may help reinvent citizenship, but it can't work alone if the goal is financial aid for all who need it. At its peak, the program will engage only 100,000 students, a fraction of the 5 million to 7 million currently on financial aid. By contrast, his plan for an income-contingent loan (ICL) program, which resembles a model advocated for more than 10 years by US Rep. Thomas Petri (D) of Wisconsin, would make post-secondary education accessible for more lower- and middle-income students than any single program since the GI Bill.
Under the ICL program, the borrower, after graduation, repays a certain percentage of his or her income through the IRS. Those who are unemployed or whose incomes do not require filing a tax return pay nothing. Most borrowers repay their loans in 10 to 15 years, not much longer than the traditional amortized loan repayment period. But no one has to pay more than the cost of his or her loan.
An ICL program would allow Columbia and other top universities to preserve need-blind admissions and full-need coverage because every student who needed to borrow money would be able to do so. It would aid students while still reimbursing the government for its investment. Because repayments would come from a small percentage of students' own incomes over time, the program would reduce the pressure on parents to sacrifice their earnings and savings to pay the expensive costs of college. It would lighten the load of loan payments after graduation, during the period when new members of the work force take home their smallest paychecks. Most important, because the amount paid back each year would be a reasonable percentage of income, borrowers would not have to miss payments for lack of funds - the major cause of student loan defaults.
LIKE a national service program, an ICL program would encourage long-term careers in public and community service. Because "borrowers choosing lower paying, public service-type jobs would not be unduly burdened by fixed student loan payments," as the National Commission on Responsibilities for Financing Post-secondary Education reported, "... this will be a powerful incentive for borrowers to choose careers in teaching, law enforcement, or any of numerous other areas where the need for skilled college gr aduates is essential."
Such a program would provide a stable, reliable, and flexible method for educating America's youth. (Entry-level positions in manufacturing and high-technology development could be as fulfilling as trainee opportunities in investment banking.) The combination of ingenuity with youthful enthusiasm could further strengthen the small-business sector, as college graduates unburdened from the risk of defaulting on their loans take more chances with start-up companies. An ICL program would enable young America ns to do what America does best: to dream, innovate, plan, and get our products to market before the Germans and Japanese.
The Ivy League has a long tradition of educating America's best and brightest for service to the nation. Today that means providing opportunities for every qualified student, regardless of socioeconomic status. An income-contingent loan would open up the gates of higher education to Americans of every background. No other program has more potential to make the United States truly a land of opportunity.