Yale joins coalition to keep loans

As Congress prepares for the reauthorization of the Higher Education Act, Yale is joining its peers in pushing to preserve loan programs and prevent provisions officials believe compromise academic freedoms.

This spring, Congress is expected to push for spending cuts in the Higher Education Act in order to compensate for a deficit in the federal budget. Yale officials are fighting to save the Perkins loan program, which provides interest-free loans to students from lower and middle-class families. The program gives the students 10 years to repay the loans, with an opportunity for loan forgiveness if they join the armed service or perform community service.

As part of a plan to curb government spending, President Bush’s fiscal year 2006 budget would recall the federal money invested in the program. Each year about 1,300 Yale students, mostly graduate and professional students, receive Perkins loans valued at as much as $6,000.

“We happen to think the Perkins loan program is great,” Yale Director of Federal Relations Richard Jacob said.

Proponents of the program cuts have said the loans are not effective, since they apply to a relatively small slice of the population — only 3 percent of U.S. students at 1,800 institutions nationwide. Overall, Bush has substantially increased aid to universities with substantial boosts to funding for student loans and for Pell Grants, a federal grant commonly used to assist undergraduates, said Brian Reidl, a federal budgetary analyst for the Heritage Foundation, a conservative think tank in Washington, D.C.

“Those who perpetually want even more spending will never be happy,” Reidl said.

Because the University meets the full demonstrated need of undergraduates, many of the financial aid programs authorized by the HEA do not directly affect Yale College students. But potential spending cuts would place a greater financial burden on the University, which would cover the costs out of its endowment. But the amount of funding approved for the HEA will not have a major effect on Yale, Yale President Richard Levin said.

“It’s a concern, but from a quantitative point of view, it’s not a big concern because Pell grants are a small portion of total financial aid,” Levin said.

Yale officials said they are also carefully watching Congress for any proposals that they believe may intrude on the affairs of private institutions. One such proposal introduced in 2003 would have subjected universities to federal auditing depending on how rapidly the school’s tuition increases in an effort to keep higher education affordable.

Riedl said he supports efforts to reign in higher education costs, but is uncomfortable with government regulation of universities.

“The better option might be not to raise financial aid, then see if universities stop raising tuition,” Riedl said. “Financial aid often just serves to help universities fatten their bottom line without leaving students better off because universities are going to charge as much tuition they can get away with.”

Another proposal — which officials at several top universities said is being pushed by for-profit educational institutions — would allow federal government oversight of academic credit for transfer students at private universities. Harvard University Director of Federal Relations Suzanne Day said she feels both proposals are misguided.

“They strike us as inappropriate, given we are private institutions, with revenue coming from private sources,” Day said. “We have a sense of our own academic standards, and it’s not necessary for the federal government to be looking into that issue.”

Yale officials are conveying their position on provisions in the act by consulting with members of Connecticut’s congressional delegation and with members of Congress, Jacob said. The House already has a draft bill of the act and is expected to begin debate later this spring. The Senate is moving along more slowly with the reauthorization process and still must begin reauthorization hearings and draft a bill.

Comments