The Strangulation of Student Aid : California will suffer greatly if Congress squeezes assistance to the needy

Now more than ever, a college education is the key to a good standard of living. Yet despite the benefits--both for individuals and the nation--of maintaining generous federal support for higher education, Congress is considering changes that would mark a substantial retreat from the government’s longstanding commitment to student aid. And nowhere would the pain be felt more than in California.

If Congress proceeds as planned, it will slash as much as $10.8 billion from the student loan program, eliminate the six-month grace period for loan repayment and levy what amounts to a needy-student tax on universities by charging the schools .85% of the federal financial aid to their enrollees.

Of special concern to California university officials is the fact that these federal charges would not be offset by increases in state funds. Thanks to such buck-passing by Washington, public colleges and universities face more budget cuts and more pressure to raise fees further.

All this comes as bad news particularly for middle-class families falling deeper into debt as they try to keep pace with spiraling college costs. Rising tuition, cutbacks in federal financial aid (the funding source for three-fourths of all student loans) and higher education’s competition for scarce state dollars mean that families will face more out-of-pocket expenses than ever.

According to a recent study by the Education Resources Institute, college-related debt in the United States is expected to double, from $24 billion to $50 billion. And, not surprisingly, much of the increase will be borne by Californians, who have already increased their rate of college borrowing by 75% since 1991.

It gets worse. With the children of the baby-boom generation flooding into colleges, state officials between now and 2010 will have to deal with rapid growth in the numbers of high school graduates as colleges and their staffs and facilities expand at a much slower rate.

These unhappy projections point to the reality that students will be met with fewer spaces in colleges and greater expenses. That’s not exactly what the drafters of the state Master Plan for Higher Education envisioned when they promised in the 1960s to provide a college education for all willing to work for one.

Washington can continue to slash away at higher education, but it does so at the peril of the state and the nation. That danger is especially grave in this nascent high-tech era, in which the fate of the United States increasingly is dependent on its supply of highly educated and skilled workers.