House to Pass New Loan Bill For Students

The U.S. House of Representatives is likely to approve a bill today that will ease restrictions on student loans for middle income families and graduate students.

The Senate passed the Higher Education Amendments of 1976 by a vote of 78-3 Tuesday and there is a very good chance that the House will follow suit today, Robin Schmidt, vice president for government and community affairs, said yesterday.

The bill will loosen the restrictions on eligibility for interest subsidies on loans and increase the annual limit on loans for graduate students, from $2500 to $5000.

The bill now under consideration is the product of a House-Senate conference committee, which ironed out the differences between the two legislative bodies.

If the bill is passed, the government will pay the 7-per-cent interest on loans for families earning about $29,000 per year while the student is in school.

Currently, the government subsidizes the interest on loans to families earning up to $19,000.

"This is clearly an attempt by the government to help middle ncome familizs," R. Jerrold Gibson '51, director of fiscal services, said yesterday. A family that becomes eligible for the interest subsidy under this law and borrows $1200 per year for four years (an average loan) will save $840 in interest, he said.

Gibson added that 90 to 95 per cent of the students who now take out loans will be eligible for the government subsidy. Now, about 70 per cent of all loan-takers are eligible for subsidies.

A provision to increase the borrowing limit on government loans will enable graduate students to borrow more money from one source.

Some graduate students presently borrow more than the $2500 they are allowed under present legislation by borrowing from different sources, Gibson said.

The bill will also change work study programs and basic education opportunity grants, but these provisions depend on how much money Congress appropriates under the bill, Gibson said.

Under the bill, funds available for work study will increase every year for the next few years and students will be able to hold outside jobs without decreasing their work study benefits.

Basic education opportunity grants, which the government gives families earning less than $11,000, will be increased from $1400 to $1800 if the bill passes.

If passed, the new amendments will supersede the Higher Education Amendments of 1972, but Gibson said that he does not know when the new law will go into effect