U.S. Curbs Seen Costing Colleges Billions in Aid

The nation’s universities face “serious damage” from uncoordinated federal policy changes, the head of a group representing top U.S. colleges said Monday, asserting that billions of dollars in annual aid and donations are at stake.

Robert M. Rosenzweig, president of the Assn. of American Universities, said that the Gramm-Rudman budget-balancing law could cut as much as $2.7 billion from federal aid to higher education in fiscal 1987 and that a House-passed tax-revision bill would “substantially diminish” incentives for donating large gifts of stocks to colleges, resulting in losses of $600 million a year.

Moreover, Rosenzweig said at a news conference with several university presidents, another $300 million a year would be lost because of a Reagan Administration proposal to reduce reimbursements for university research. Such policies constitute “a real and present danger” to universities, he said.

‘Difficult Bind’

Similarly, Harvard University President Derek Bok called the tax and budget proposals a “pincer movement” that will put universities and colleges in a “difficult bind indeed.”

In addition, Stanford University President Donald Kennedy said that two-thirds of the nation’s basic research is conducted in universities but that federal budget constraints are making reimbursements for that research “more vulnerable to challenge.”

Kennedy singled out the National Institutes of Health, charging that during the last three years it has “tried to withhold reimbursement funds from the universities . . . to meet budget targets.”

Congressional committees have restored the funds, he said, but now the Administration is proposing a limit on reimbursable administrative costs. This ceiling, scheduled to become effective in July, would cut $100 million in overall reimbursements this fiscal year and $300 million in succeeding years, Kennedy said.

Lobbying Against Proposal

The university presidents, whose organization represents 54 U.S. institutions, are lobbying against this proposal and others that they say will harm the nation’s education system and, thus, society in general.

For its part, the Reagan Administration has asserted that increased endowments to colleges are providing enough money to make up for budget cuts.

But Bok of Harvard, which often is cited as a recipient of huge gifts, called this view “seriously distorted.”