I appreciated the opportunity to set forth the Administration’s substantial commitment to student financial aid in the June 2, 1982, issue of Education Week (“Student Financial Aid: Can Families Make Do With Less?”).
But upon seeing the article, as published, I realized some statements and charts are a bit misleading and should not be allowed to stand unchallenged.
Dallas Martin (executive director of the National Association of Student Financial Aid Officers) should realize the Administration’s estimate of financial commitment to student aid is computed on the basis of the volume of Guaranteed Student Loans actually going to students, not merely on the federal loan subsidy cost to lenders. Otherwise, one would not dismiss projections of increased financial aid to students on the grounds that they represent higher interest costs.
In the context of my discussion of the decrease in parents’ contributions toward education costs between 1978 and 1981 of about 6 percent, the editors inserted an erroneous calculation of inflation (51.3 percent) over the same period. This, unfortunately, left the impression that inflation substantially exceeded increases in family income and justified this reduction in parental support.
In fact, between 1978 and 1981, real per-capita disposable personal income (which takes inflation into account) grew by 2.6 percent. Therefore, the reduction in parents’ contributions do indeed represent real deductions in family spending for education.
The charts, in addition, would leave the reader with a number of misimpressions:
First, the chart on Guaranteed Student Loans apparently omits, as have many recent media reports, borrowers under the newest part of that program--the Auxiliary Loan program, under which parents and graduate students can borrow up to $3,000 and $5,000 per-year respectively. It is this less-subsidized portion of the Guaranteed Student Loan program that the Administration proposes to expand in the fiscal year 1983, shifting all graduate-student borrowing from the regular program to the auxiliary program.
One can’t have it both ways. One can’t show such a dramatic decline in Guaranteed Student Loan borrowing on this chart and state in the article that the Administration is “encouraging students to amass high levels of debt before entering the work force.”
Second, the chart on National Direct Student Loans omits showing over $400 million in relending by institutions of higher education from the over $4 billion in loan capital deposited by the federal government during the past 25 years and still available.
The amount of relending alone is more than double the amount of new capital added to the program in the past two years. And, again, this was a factor in the Administration’s decision not to request new federal capital funds for fiscal year 1983.
Third, the chart on Pell Grants incorrectly shows the number of recipients in 1983-84 as 1.6 million, instead of 1.8 million.
Last, the chart on State Student Incentive Grants, while correctly showing a drop-off in federal funding, does not show the substantial increase in state participation and matching--from $364 million and over 31 states and territories in 1973-74 to $1 billion and 57 states and territories by 1983-84. It is because of this dramatic increase in state participation and funding that the Administration felt the program’s goals had been accomplished and further federal incentives were unnecessary.
I believe these points suffice to alert the reader to the notion that all statements and charts need to be read carefully.
Regardless of one’s policy preferences, the record is clear--there is a strong commitment to American higher education by this Administration with all parties--parents, students, states, public and private institutions, and the federal government--expected to play their respective roles.
Gary L. Jones Acting Undersecretary of Education Washington, D.C.
