Harvard Likely to Maintain Financial Aid Level

Despite fears of massive cuts in government support of financial aid, the University will likely be able to maintain the lion's share of its federal funding in the coming year.

While educational grants and student loans were early targets of cost-cutters trying to balance the federal budget, funding for many of these programs has been saved for the moment, according to those inside the Beltway.

Of more immediate concern than long-term budget cutting has been the federal government's inability to pass a budget this year.

The ensuing government shutdowns have led to delays in processing applications for aid and distributing payments, though Harvard financial aid officials say no students will have to register late as a result.

Greener Pastures

Any cuts in federal funding would have dire consequences for the amount of aid Harvard is able to give its students, according to Director of Financial Aid James S. Miller.

The vast majority of direct loans, seven to eight percent of the scholarships Harvard awards and about half its student jobs are funded with federal money, Miller says.

But Republicans and Democrats alike are saying that educational funding has been largely spared by recent Congressional action.

According to figures released by the Republican-controlled Congressional Committee on Economic and Educational Opportunities, funding for student loans will actually increase by 50 percent over the next seven years, from $25 to $36 billion.

Congress decided not to act on earlier plans to cap spending for the federal direct loan programs.

In addition, fees for students receiving these loans will not be increased in the near future, according to Robert M. Shireman, legislative director for Senator Paul Simon (D-Ill.).

Congress has also increased the maximum size of Pell Grants by $100 to $2,440, Shireman says.

"There was a massive threat and we have beaten back a part of that threat," he says.

The bad news is that other programs like matching funds for fellowships and state research grants have been severely restricted, particularly affecting large research universities such as Harvard, Shireman says.

Still, University lobbyists say they are, on the whole, pleased with Congress' decisions.

"It sounds like the same levels of funding will be there in the programs we rely on most," says Nan F. Nixon, director of federal relations for the University.

Delays: 'An Irritation'

The shutdowns of the federal government have been more injurious to Harvard's financial aid operation than budget-cutting.

The lack of federal workers has caused a significant backlog in processing for federal grants and loans, says Vice President for Government, Community and Public Affairs James H. Rowe III '73.

The delay in processing applications and distributing funds has directly affected several students, Miller says.

But the Financial Aid Office has provided funds of its own to cover the missing money until the federal government is able to process all of its aid payments.

"We've been aware of the problems and [have] been able to help the students," Miller says. "So far it's been an irritation and nothing more."

As a substitute for a year-long budget, the government has funded its programs through a series of continuing resolutions. These have resulted in frequent fluctuations in budgeted allocations for education and have confounded planning for educational institutions, Shireman says.

Rowe says this confusion has been problematic for Harvard.

"The bad news has been the continuing resolution rigmarole," Rowe says. "Like many other groups, [educational institutions] have had a hard time getting taken off the table and treated differently."

According to a press release from the office of Sen. Edward M. Kennedy '54-'56 (D-Mass.), the current incarnation of the continuing resolution would have meant $3.1 billion in education cuts if it remained in place for the whole year.

Fortunately for Harvard's financial aid efforts, Congress approved a last-minute amendment to the current continuing resolution on Friday. According to Harvard lobbyists, the amendment leaves funding for financial aid programs at either the House's proposed levels for fiscal 1996 or at the same levels they were in the fiscal 1995 budget.

This new continuing resolution means that Harvard will keep virtually all its federal funding for this year, Nixon says.

"Nothing of interest to us has been cut to lower than 75 percent of its fiscal 1995 level," Nixon said.

According to Kennedy's office, many universities will have significant difficulties in providing accurate financial aid packages for their students this spring since they won't know how much federal money they will receive this year.

Even though Pell Grant award levels are specified in the continuing resolution, colleges will not know their final allocations of other types of aid like work study, Supplemental Educational Opportunity Grants and Perkins Loans, the Kennedy release says.

But the delays shouldn't affect the distribution of Harvard awards. Harvard is more immune to federal uncertainty than other institutions because it is able to commit more of its own money to aid programs, Miller says.

As a result, the University will still be able to distribute its financial aid awards on time to students this year, Miller says.

"We'll have to make some guesstimates, but we will continue to notify people of their eligibility for aid on the same time frame," Miller says.

Financial aid packages for Harvard students may change somewhat when final federal numbers are available, but the changes will only be in the types of aid given, not total amounts, Miller says.

Student Efforts Key

One reason universities have not seen the drastic funding cuts once feared has been a massive effort by college administrators, professors and students to plead the case in Washington, Shireman says.

Harvard lobbyists agree with his assessment.

"These efforts have been successful in a large part due to the students," Nixon says. "So far they've been very active."

Still, some in Washington and around the country say the cuts in student aid are in the best interests of the students.

"I remain convinced that a balanced budget will also provide enormous benefits for students, as it will result in lower interest rates for future student loans," Sen. Pete V. Domenici (R-N.M.) says in a statement.

For this reason, Harvard's efforts in Washington will continue, Nixon says.

"Things look better, but I have to reserve judgement," Nixon says. "The first part of last year we were looking at $18 billion in cuts to loan programs, so really, it's all relative."