The editorial ''Good New Rule on Student Aid'' {Nov. 13} presents a disturbing vision for the future of student aid. To call denying student loans to students who attend institutions with default rates above 30 percent ''genuine reform'' shows a lack of understanding of the default problem and a lack of concern for the students who most need financial assistance.

Institutions don't default -- students do. It is blatantly unfair to deny future students loans, regardless of whether they will responsibly repay them, because previous students defaulted above an arbitrary level.

At first glance, the casual observer may think a high default rate among an institution's students says something about a school's academic program. A closer examination reveals that a high default rate most likely means the institution serves a large percentage of high-risk people. All evidence indicates that default rates are primarily a function of the population served. Low-in/come minorities and women are simply more likely to default.

Congress recognized this reality when it exempted historically black and Native American colleges from the default cutoff. The irony now is that a student could attend a historically black college, but the student may not be able to attend a school across the street that would teach him how to be a computer programmer or a medical technician, for example.

To say the government should not put money into ''risky'' transactions such as education is contrary to the intent of the student aid programs. The Higher Education Act of 1965 was designed to ensure that all students -- especially low-income people who cannot get credit from a bank -- can pursue a higher education.

What will the effect of this so-called reform be? First, it will indiscriminately close many institutions, limiting the education opportunities and alternatives available to students. In some cases, it will seriously harm an entire geographic area.

The 35 percent cutoff, for example threatens to remove loan eligibility for nearly 3,400 Maryland students. In Baltimore alone, it could close nine schools -- or half of the private career schools and one of the city's two community colleges -- and exclude nearly 2,400 students.

A second result will be to hinder our nation's ability to gain the skilled work force it needs to remain economically competitive. Private career schools now educate half of all technically skilled entry-level workers. Closing the doors to education will deny our economy skilled artisans and technicians it needs to thrive.

Granted, student loan defaults are a serious problem. That is why we have instituted reforms to help ensure that our students understand their loan responsibilities and repay them. It is largely because of these reforms that our sector of postsecondary education has experienced a larger decline in defaults than any other sector.

STEPHEN J. BLAIR President National Association of Trade and Technical Schools Washington