THE GREAT expansion of federal aid for America's college students during the last decade has resulted in a remarkable social circumstances: It has brought the possibility of attending college - even the most expensive ones - within reach of millions of youths from low- and middle-income families. However, during the last two years various reports have revealed a darker side of the $3-billion federal student-aid effort - namely, the high default rates of some federal student-loan programs and the lax administration and outright misuse of those funds by some educational institutions. What the reports add up to is an alarming picture of loose federal standards and indifferent administration that undermines the programs' worthy purpose and achievements.
Congress and the Department of Health, Education and Welfare must share much of the blame for this situation. In their zeal to make public funds available to a larger number of college-bound students, they have also made it possible for students and institutions, by accident or design, to bilk the federal student-aid programs of millions of dollars.
For example, federal student-aid funds, intended as outright grants students can use to pay tuition, last year provided over $2 million of the revenue of the Lacaze-Gardner business school in Washington - even though nearly 80 percent of the school's students who nominally received that aid dropped out months after enrolling. The privately owned school, which offers courses in various business skills, uses a heavy television and radio advertising campaign to attract largely poor inner-city residents. Those people, many of whom lack basic education, are eligible for the maximum amount of federal grants. Thanks to the school's high dropout rate, its owner can enroll many more students during the year than its actual capacity - and reap more and more federal aid. Perhaps worst of all, federal education officials who are investigating the school's practices acknowledge that nothing its owner has done (as he claims) violates current federal guidelines. There are hundreds of other examples of the violation of the spirit or the letter of the federal programs.
Clearly, the administration of federal student aid needs to be revised and strengthened. HEW Secretary Joseph Califano has proposed new guidelines that he says will lessen abuse of the programs, reorganized divisions of the department responsible for the aid programs, and set up a special office to review systematically the distribution and use of student-aid funds. But much more remains to be done by HEW, and Congress must share a keener interest if the situation is to be made right.