Student loans available, despite talk of big cuts
Boston — There's money after all.
After months of publicity about threatened cuts in federal aid and loans for college students, there are millions of dollars still available in unused student loan money this year, says Gordon Van der Water of the Education Commission of the States. The Reagan administration is expected to press for more cuts next year.
For students like Emily Bailey of Ankeny, Iowa, the months of tussling between Congress and the White House over federal assistance have meant lengthy delays in getting her federally guaranteed student loan this year to attend Des Moines Area Community College. But despite the delay, she's almost sure to get the money she needs.
Colleges are especially concerned about poor and minority students not even bothering to apply for student aid because they don't think it's available. The Consortium for Financing Higher Education, a group of 30 private colleges, has closely monitored changes in the socioeconomic mix of its member colleges during the past six years. According to the consortium's legislative liaison, Ted Bracken, so far there has been no significant change.
''But we're still on the verge of an era when costs become overwhelming,'' he said. Mr. Bracken says if the number of poor and minority students drops off, rich students are likely to increase their applications to the better schools, because they think they'll be accepted more easily.
''Virtually the same amount of money is available now as last year,'' says Bracken. Adds Darryl Greer of the College Board in Washington: ''Fewer people are applying for aid even though the money is available.''
''There are some cuts, but they're not nearly as bad as was feared,'' says Dennis Martin, assistant director of the National Association of Student Financial Aid Administrators. He estimates most student loan programs have been cut about 4 percent across the board.
Jack Sheehan, director of student financial aid at Boston University, says aid applications there are down 30 percent from last year.
Mr. Van der Water expects a rush on programs that many students didn't even apply for because of discouraging reports of cutbacks or stringent new eligibility requirements. ''As word leaks out, we'll see a surge in volume,'' he says.
''But remember that room and board and tuition costs are rising substantially. So while students get the same amount of money, they have to pay a bigger bill,'' adds Van der Water.
College costs are up, although less than many expected, according to the College Scholarship Service in New York. Tuition costs at public colleges and universities are up an average of 20 percent over last year. At private colleges , average tuition costs are up more than 13 percent.
Van der Water's biggest concern: that students will drop out or be scared off from applying for college loans from what they hear and read.
''Those folks will get hit the hardest,'' he says.
Many student aid administrators and some on Capitol Hill think Congress is likely to override President Reagan's veto announced Aug. 28 of the $14.1 billion supplemental appropriations bill that shaves off some thicker slices of student aid. If Reagan's veto holds, the student aid chunk of that bill would get cut from $2.27 billion to about $1.4 billion. Among the cuts included in that bill are a 7 percent dip in the annual maximum Pell grant (based on need).
Several student aid administrators say the new requirement for students from families earning more than $30,000 to prove ''need'' has been widely misunderstood. Dennis Martin says families earning up to $60,000 and $70,000 a year still qualify for the low-interest, federally guaranteed loans, depending on other family expenses.
Alongside the tug of war for student aid funds are some new and tighter rules on federal student loan dollars, including:
* The cutoff of National Direct Student Loans to more than 400 schools with a repayment default rate of more than 25 percent. To prevent that, the school must either step up collection or turn the bad loans over to the US Education Department. Congress will vote on this new regulation in September.
* The stepping up of collection of those overdue student loan payoffs by private debt collection agencies instead of by Education Department employees.
* Requiring compliance with military draft registration laws in order to take advantage of any federal student aid. This bill, awaiting President Reagan's signature, would require every 18- and 19-year-old male student who applies for financial aid to file a statement saying he has registered for the draft.