When is a subsidy not a subsidy?
This is a point that should not be obscured by the hair-splitting that has arisen around Education Secretary Bell's efforts to reduce civil rights enforcement in federally funded educational institutions.
The question has come up most recently in the reported decision of the administration to go part way with Mr. Bell in one of these efforts. He wanted to exempt colleges from education law prohibitions on sex discrimination where the only federal aid was labeled for students. He would have been consistent by including both grants and guaranteed loans, affecting more than 1,300 schools. But the decision was to exempt only on the basis of loans. The grants were regarded as financial assistance to the institution, thus requiring it not to discriminate. This interpretation cuts the affected schools to some 300.
Yet a guaranteed loan as well as a grant represents a federal subsidy. It helps in obtaining access to loans and favorable interest rates. If an institution where students receive federal grants must refrain from discrimination, so should an institution where students receive federally guaranteed loans.
But should there really be any hair-splitting over enforcing the basic standards of civil rights?
It is thought that exempting colleges on sex discrimination would be followed by exempting them from bans on discrimination by race, color, or national origin.
All American institutions, whether receiving federal subsidy or not, ought to want to comply with the highest standards of justice, fairness, and equal rights.
If institutions that benefit from federal subsidy cannot be expected to comply with these standards, who can?