MIT could lose $3 millionBy Ellen L. Spero
MIT stands to lose over three million dollars if President Ronald Reagan's proposed federal financial aid cuts are approved by Congress, according to a statement on the Impact of Administration's Budget Proposals on MIT and its Undergraduate Students.
The MIT Student Financial Aid Office issued the statement Tuesday.
Reagan's proposal would make students whose family adjusted gross income exceeds $25,000 ineligible for Pell Grants, federally funded jobs, and direct loans. The proposed regulations would also place a cap of $4000 on aid from these sources to eligible students.
The proposal also calls for a limit on subsidized Guaranteed Student Loans (GSLs) to those students with family adjusted gross incomes under $32,500.
This GSL restriction's impact on the Institute, according to the statement, would be "modest." The proposal intends for the loans themselves to continue to be available.
Undergraduates deprived of GSL subsidies would face interest costs on their loans while in school, which could amount to $3000 over four years, and higher debt-service costs after graduation.
The office estimates that 75 percent of the 3000 undergraduate GSL borrowers will fall above the $32,500 mark.
If the $25,000 elgibility cap and $4000 limit proposals are approved by Congress, the financial aid office estimates that MIT undergraduates would lose about one-tenth the present Pell Grant inflow ($80,000), one-half of MIT's Supplemental Educational Opportunity Grant Allocation, and essentially all of both the National Direct Student Loan (NDSL) Program ($1,700,000) and the undergraduate College Work Study Program ($800,000).
The loss of the highly subsidized NDSLs by all students will most affect individual undergraduates. According to the statement, this program has "helped to mollify the effect of MIT's self-help threshold. MIT would attempt to substitute other loan funds, but the terms of these loans will certainly be less attractive to students."
The financial aid office estimates this would amount to an increase by several hundred dollars while in school and an increase in debt to be be repaid after graduation of "thousands of dollars."