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Archive for Tuesday, January 30, 1990

DEPARTMENT DENIES REPORT OF LOAN CUTS

January 30, 1990

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An item in newspaper stories today about President Bush's higher education budget proposal raised eyebrows at the U.S. Department of Education in Washington.

One report on the Fiscal Year 1991 budget said Bush, who wants to be known as the education president, recommended guaranteed college student loans be "reduced."

Not so, according to Education Department officials.

"There is no reduction in guaranteed student loans," an Education Department spokesman in Washington said today. "That's simplifying it to say it was cut."

"There is a reduction . . . for interest and special allowances because interest rates have gone down," he said. "The student loan program is alive and well."

AT A NEWS conference Monday, Education Secretary Lauro Cavazos clarified reports that said Bush wants "dramatic cuts" in GSL funding in FY 1991, which begins in October.

"Nothing could be more misleading," said Cavazos. "In fact, new GSL loan volume is expected to increase by $54 million in 1991."

He also tried to clear up stories regarding $66.5 million in Pell Grant program cuts that will reduce or eliminate grants to more than 1.3 million students.

"That is accurate, but it's old news," Cavazos said. "It relates to last year, FY 1990, and to the effect of the Gramm-Rudman-Hollings (budget targets) enacted by Congress."

"The FY 1991 budget policy for Pell Grants protects students from further possible reductions by requesting $371 million to cover previous years' shortfalls," he said.

CAVAZOS SAID the budget includes funding to increase Pell Grant recipients from 3.21 million in 1990 to 3.38 million in 1991, an increase of 175,000 recipients.

At Kansas University during the 1989-90 academic year, 4,744 students borrowed $15.8 million in GSL funds and 3,190 students received $5.1 million in Pell Grants.

"This is the biggest source of money that our students have," said Jerry Rogers, KU financial aid director. "It would devastate a lot of people if these programs were curtailed."

The 1991 education budget prepared by the Bush administration for consideration by Congress totals $24.6 billion, an increase of more than $500 million over the 1990 level.

WITHIN THE federal education budget, Cavazos said, the administration recommends increases totaling $1.8 billion to high-priority areas and new initiatives.

Increases are derived from $1.3 billion in reductions in the cost of the GSL program and decreases in low-priority programs, along with the $500 million in extra funds.

The budget provides $18 billion in financial aid for about 5.9 million needy college students, Cavazos said. Financial aid is "my highest priority," he said.

The administration also proposes increases for endowment grants to historically black colleges and academic counseling for disadvantaged students.

In addition, it includes more money for scholarship and fellowship programs to meet national manpower needs and improve minority access to graduate education.

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