Liberals scoff at administration claims that social programs for the poor also benefit those who don't need them. The fact is that student aid does indeed go to families in virtually every income group. Liberals thus find themselves in the anomalous position of supporting aid for the many while the president pleads for the neediest--the traditional liberal position.
Those fighting cuts in student loans refuse to yield on aid for the middle class for fear it would lend credibility to the Reagan position. They charge that the administration's 1983 budget cuts would emasculate the program by cutting deeply into aid for the truly needy as well. President Reagan's opponents thus find common cause to hold firm on current funding levels and attack the entire budget proposal.
Reagan's adversaries are not all of one mind however. Some agree privately with the administration that student aid has been diverted from its target by too liberal a definition of need. Congress and federal officials claim it was their original intent to provide a college opportunity for those who could not afford to attend college on their own. But over the past 15 years, student aid has evolved through sheer growth into what is in effect a general subsidy for colleges and universities.
Between 1978 and 1982, the cost to the federal government of subsidizing interest on student loans alone increased from about $500 million to over $3 billion. Congressional Quarterly has identified the Guaranteed Student Loan Program as the fastest growing entitlement in the federal budget. Currently, 4 million students hold such loans, though not all of them are enrolled.
Data on the total number of those receiving aid from all six federal programs tend to be confusing. The federal government does not count individuals, but rather grants and loans. In 1981, some 10 million grants and loans were awarded. As an indicator of recipients, this number is highly inflated since one person often receives aid from two or three programs. But even if the recipients number half that, out of a total enrollment in 1981 of 11 million, the reach of federal aid is impressive.
Colleges have been able to raise their tuition charges knowing that federal aid would be able to help students make up a large part of the difference. Cries that student aid cuts will force some institutions to close underscore the role of these programs in fortifying institutions.
Aid eligibility has been creeping into higher and higher income brackets. Middle-class youth are more aggressive, persistent and knowledgeable about going after benefits.
Even before the Middle Income Student Assistance Act of 1978, the trend was evident. That legislation, which opened subsidized loans to all income groups, was a direct consequence of two factors. One was the effect of inflation on middle-income groups. This despite a College Board study in 1978 that found real income among middle-class groups rose at a greater rate than the cost of education. The perception of an inflation squeeze was real enough to generate political pressure and bring federal help. (Ironically, such federal largesse may have encouraged tuition increases and thus turned the perception of a squeeze into reality).
The second factor was the changing ethic about parental help for college. A new social climate has developed in which many parents no longer feel bound to sacrifice for their children by scrimping and saving. They now feel that if the cost of sending their children to college cramps their life style, they should receive student aid. Indeed, aid programs now favor families that opt to consume rather than save their discretionary income. A family with no savings has less to contribute to college costs, and thus often receives more federal help.
Meanwhile, analysts remain puzzled by the evident failure of student aid to sharply increase the percentage of talented poor students attending college. The most recent study of this subject, done seven years after student aid programs were in place, shows that among the most talented high school graduates, those in the lowest socioeconomic group attended at a rate about half that of those in the highest income bracket--a statistic essentially the same as in 1960.
The escalating role of student aid in supporting institutions and in relieving financial stress when it has yet to provide genuine equal opportunity for low-income groups is a matter worthy of public debate. But where are the liberal voices heard in the past supporting "targeting" of aid? One leading education analyst has advised defenders of student aid against what he calls: "diversionary" discussion of program merits or refinements. "It will not do any good to design the perfect boat if in doing so we let the lake drain in the meantime," he says.
Liberals also fear inviting resentment of a free ride for the poor and losing their strongest allies--middle-income families--in defending these "equal opportunity" programs. Within a month of the announcemnt of the Reagan budget, middle-class students had staged a massive demonstration and lobbying effort on Capitol Hill opposing cuts. As a result, student loans are now considered to have protected status in the current budget negotiations. This contrasts sharply with the silence surrounding proposed cuts in welfare, food stamps and housing allowances affecting the poor.
Supporting aid for middle-income students to buy their political protection is likely to backfire on the poor. Escalating costs are a red flag to fiscal conservatives, especially if student aid leads to more tuition increases. Further, the priority on aid for the poor is threatened. Last year, President Reagan's proposal to cut the basic grant program (low-income grants extended to middle-income groups in 1978) by lowering income eligibility was dumped in favor of reducing all individual grants by the same amount--$80. The poor were not favored. This year, it appears that loans have been saved at the cost of holding constant future appropriations for basic grants--a move that hurts low- income students.
A "no more cuts" stance backed by middle- class lobbying may work in the short run to stop cuts, but it intensifies public frustration. Liberals refuse to recognize there is a problem with uncontrolled costs, thus forcing that frustration into the only available alternative --the Reagan one.