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In a rare split between the Heritage Foundation, a conservative think tank, and Secretary of Education William J. Bennett, one of the foundation's researchers has concluded that the department's highly touted income-contingent loan program "cannot work."

"The analysis points to the futility of offering students one financial-aid program when other, more heavily subsidized programs, are available," writes Robert J. Staaf, professor of economics at Clemson University.

"If students can be persuaded to take part in the icl program, there might be a tiny reduction in the federal deficit," Mr. Staaf adds. ''But any taxpayer savings under the icl program are contingent upon student default rates. Under almost any set of assumptions, the icl default rate would likely be higher than other federal loan programs."

Under the program, which is being piloted this fall on 10 campuses, students can borrow for tuition at market rates, and repayment rates would be based on a student's post-graduation income. Secretary Bennett has urged expanding it to become the centerpiece of federal student-aid programs in the future.


At a time when analysts are becoming increasingly concerned over the mounting debt of college students, a federally funded study has examined Education Department figures to determine how much students owe.

The study, prepared by mpr Associates of Berkeley, Calif., concluded that, in 1984, students at four-year private colleges had accumulated an average debt burden of $7,000, while those at four-year public institutions had, on average, borrowed $5,000.

The study also found that students from low- and high-income families were equally likely to borrow to pay for college, but that the sources of their loans differed.

Copies of the study, stock number 065-000-00297-3, are available for $2.75 each from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402.


A study analyzing rates at which students default on their Guaranteed Student Loans has found that while defaults are widespread, some postsecondary institutions--primarily proprietary schools--have default rates of greater than 60 percent.

The study, conducted by Federal Funds Information for States, a joint project of the National Governors' Association and the National Conference of State Legislatures, also found that the amount of defaulted gsl's has increased five-fold since 1979, to nearly $1.3 billion, and that the default rate has climbed from 10.8 percent to 12.1 percent over the past three years.

Meanwhile, a separate study of community-college and proprietary-school students has found that students who drop out

of their program are twice as likely as those who graduate to default on their gsl's.

The study, mandated by the California legislature and funded by the state's student-aid commission, also found that blacks were more likely than Hispanics and whites to default on student loans.


Citing the need to help families cope with their children's college costs, the Princeton, N.J.-based College Savings Bank has created a new savings plan.

Under the plan, parents can invest as little as $1,000 in a certificate of deposit, called "CollegeSure," which pays an interest rate that rises along with increases in college costs.

Similar to tuition-prepayment plans, which several colleges and states have created to enable parents to guarantee tuition for their children, a CollegeSure cd will pay for at least the average tuition, fees, and room and board at a four-year private college.


Despite charges of "isolationism," Gov. Michael S. Dukakis of Massachusetts has signed legislation requiring foreign students to pay full tuition at state colleges and universities.

But a legislative committee, whose members said they were "embarrassed" by the law, has voted to repeal it.

Under the bill, foreign students would pay the "full cost" of tuition, rather than the same subsidized rate that out-of-state students are charged.

The measure is likely to drive foreign students to other states, and could, over time, cripple Massachusetts' international trade, according to Richard Dye, executive vice president of the Institute of International Education.

He added that it runs counter to efforts by other states to attract students from other countries.

"More and more, the dominant feeling is that foreign students are an asset," Mr. Dye said. "Higher education is one of the nation's largest and most successful export industries."


In an effort to recruit and train minority scientists and engineers, the National Science Foundation has awarded two $5-million grants to establish research centers at leading minority institutions.

Under the program, researchers at Howard University in Washington will investigate materials critical to telecommunications, defense, and industrial applications. The researchers will also, through educational programs and research opportunities, create links with precollegiate teachers, counselors, and students.

With its grant, the Meharry Medical College in Nashville will establish a center on cellular and molecular biology. Center officials also plan to sponsor high-school research programs and to offer scholarships to high-school students.--rr

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