The Money Squeeze

Public campuses have traditionally charged higher tuition for out-of-state students than for natives, but this summer the gap has widened dramatically. After surveying more than half its 113 member schools, the National Association of State Universities and Land Grant Colleges reports that tuition fees for the coming year have been hiked an average of 10% for nonresident students, compared with increases of only 3% or 4% for residents.

Individual boosts in out-of-state fees run as high as 50%, particularly at the Big Ten universities in the Midwest, where the influx of students from other areas is especially heavy. Purdue University, for example, is raising nonresident tuition from $1,200 to $1,600, the University of Indiana from $1,050 to $1,490, and the University of Wisconsin from $1,150 to $1,726, a tentative figure that could go still higher.

The primary considerations appear to be rising faculty salaries and dwindling classroom and dormitory space. The tuition hikes are intended to discourage applications from out-of-state students and force those who persist to shoulder a larger share of the real costs of their education. One possible result is that public colleges and universities will become more provincial.

Added Crunch. Beyond that, administrators of the Government's federally insured student-loan program can already see the bad news reflected in a spurt of new loan applications. The added crunch comes at a time when tight money and the failure by Congress to adjust the loan program to the current money market threaten thousands of college and university students.

Since the program began in 1965, banks have lent $1.4 billion to 1,600,000 students, with the Government paying the interest until after graduation. The trouble is that the interest rate paid by the Government has remained at 7% while the prime lending rate has climbed to 8.5%. As a consequence, some lending institutions have withdrawn from the program entirely and others have restricted new loans to students with whom they were already doing business.

A bill that would allow HEW Secretary Robert Finch to increase the interest ceiling on student loans to 10% has been passed by the Senate, but a similar bill has been stalled in the House by the threat of amendments aimed at curbing student disorders.

President Nixon has publicly assured banks that the legislation will pass; since it is retroactive, he has urged them to proceed with loans as if the bill were law. Even if the President's prediction is correct, countless students will suffer financial and educational losses from the delay, especially incoming freshmen who are applying for loans for the first time. If the President is wrong and the legislation is not passed, HEW officials conservatively estimate that at least 225,000 students will be denied up to $200 million in loans.

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