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Financial aid cuts reduced

By Edward Whang

The Reagan Administration abandoned its plan to cut $2.3 billion from the student financial aid budget last week, as a result of pressure applied by college leaders. Instead it has adopted a compromise proposed by Senate Majority Leader Robert Dole, which calls for a cut of only $352 million.

"What Reagan had originally proposed would have been a disaster," claimed Leonard V. Gallagher '54, director of Student Financial Aid.

Gallagher said that the compromise will still seriously hurt MIT students. "The effect of the Dole education cuts would be to squeeze middle income students out of access to the National Direct Student Loan and Guaranteed Student Loan programs," he said.

MIT would be put under pressure to secure alternate sources of millions of dollars in financial aid, according to Gallagher. MIT would eventually be forced to pass the cost of these funds to students.

Reagan had requested a denial of loans to students from families earning an adjusted gross income of at least $32,500. He also asked that the maximum federal loan and grant package be $4000. The Dole compromise allows students from families earning up to $60,000 to receive aid up to $8000 a year.

"The real cost of a year at MIT ($16,000) is denied and set arbitrarily at $8000, while the family's ability to contribute is taken at full value," Gallagher said.

"A family that can now pay half the real cost, and now is awarded federal aid toward the remaining $8000, would under the Dole proposal be deemed able to pay the full cost and be ineligible for federal funds," he added.

This plan will affect families whose incomes are as low as $40,000, Gallagher said, and "neatly pulls the rug out from under middle-income families whose sons and daughters desire to attend higher-cost colleges."

The administration's decision to abandon its initial plan was primarily due to effective lobbying by college leaders. Secretary of Education William J. Bennett had claimed that Reagan's proposed aid cuts would not necessarily impose hardships upon students. That is when the university lobby, led by the American Council on Education, began its campaign with letters and visits to Congress.

According to a report submitted to Reagan by college leaders, a 25 percent cut in aid would force dozens of independent colleges into bankruptcy and make it impossible for as many as a million low-income students to obtain their educations.

MIT is in a better position than most other schools, according to Gallagher. "Among high cost private schools MIT has enjoyed a disproportionally high amount of federal funds. We have a private endowment and a history of using our own money for financial aid -- we have less to lose than many other schools," he said.

Gallagher urged students to fight the federal aid cuts. "I encourage students to organize a letter writing campaign. When Reagan first took office he proposed similar cuts. At that time the Boston University students launched a very effective letter campaign. Write your senator!"