The sweeping changes the first Republican-controlled Congress in 40 years plans to implement could have profound fiscal effects on the annual $2.5 million in federal grants Dartmouth receives, according to College officials.
The director of the Massachusetts Institute of Technology's Washington office spoke to the Board of Trustees over the weekend about the impact the new Congress will have on higher education.
College Spokesman Alex Huppe said the College has not made an institutional statement about the GOP's triumph on Capitol Hill, but he said he is concerned about some of the legislation the new 104th Congress is considering.
Many of the changes in a time of severe budget constraints could involve rapid cutbacks in federal research grants and student loan programs
Virginia Hazen, director of financial aid, said some Republican proposals would cut or reduce appropriations for federal student aid such as the Supplemental Education Opportunity Grant, the Work-Study Program, Perkins loans and federal components of state grants.
A more daring Republican idea is to cap the expansion of the William D. Ford Federal Direct Student Loan Program at 40 percent of the loan volume, which is the point the program will reach in the 1995-96 fiscal year.
The program, created in 1993, currently allows the volume of loans issued through direct lending to rise to 50 percent in 1996-97 and to 60 percent in the following two years, with the possibility of higher percentages if more colleges wish to participate.
Sen. James Jeffords, R-Vt., told the Chronicle of Higher Education the Republicans will press hard to curb the growth of direct lending to colleges.
He said in the long-run, they must look at consequences of the methodology of income-sensitive repayment.
The College is joining a nationwide effort of colleges and universities to urge Congress to keep up student-aid programs, Hazen said.
"We and our financial aid colleagues across the nation are writing to senators and representatives to tell them this would not be a wise move," Hazen said.
"It could spell the end of need-blind admissions for some schools. The money goes to the neediest students."
Dartmouth is currently one of the few schools in the country that still has need-blind admissions.
Hazen said a plan by some House Republicans to cut deeply into the federal subsidy for interest on student loans for students currently in schools could be devastating.
"Students also receive about $5.4 million in Stafford loan funds," Hazen said. "However, I do not expect this program will be eliminated. Rather, it is proposed that its in-school interest subsidy be cut."
Rep. John E. Porter, R-Ill., new chair of the House Appropriations Subcommittee on Labor, Health and Human Services and Education, told the Chronicle that the Republicans would take a "hard look" at the subsidy before making cuts.
"In terms of cutting anything, we have to do this intelligently," Porter said. "It can't be mindless cutting."
Hazen said without the government subsidy, the added debt on loans for students attending college for four years would rise by 18 percent, and the debt for students who go to graduate school would rise by 33 percent.
Hazen said the worst scenario is if two different programs -- such as the Stafford Loan subsidy and Perkins Loans -- are cut at the same time, making some students unable to afford to attend college.
She said if the Republicans attempt to push through radical cutbacks in education, there will be strong opposition from the public.
Hazen predicted that the most likely outcome will be a compromise on cutbacks in each of the programs.
"The best thing we can do is to keep writing before deciding what to do if this does happen," Hazen said. "We want to be prepared, but not overreact."
Accompanying the widely-discussed "Contract with America," a statement of Republican objectives in the new Congress sponsored by House Speaker Newt Gingrich, R-Ga., is a budget document calling for large cuts in overhead costs that universities charge for conducting research.
College Treasurer Lyn Hutton said the government provides grants to faculty to perform research in the form of direct research and indirect overhead funds. Professors must apply and compete for these grants.
The vast majority of these funds help research in the Dartmouth Medical School, the Thayer School of Engineering and the life and physical sciences, Hutton said.
Acting Education Chair Robert Binswanger said the Republicans' plan to cut the U.S. Department of Education and disperse its functions to the states is an effort to cut what they see as "exorbitant" spending on overhead costs of research.
Overhead costs "are a target in a cost-cutting federal bureaucracy," Binswanger said.
Binswanger noted that the federal government's overall monetary role in higher education is only about 10 percent, and it heavily supports only a small percentage of the nation's 3,300 colleges and universities.
A senior Republican aide to the House Committee on Science told the Chronicle that the committee's chairman, Rep. Robert E. Walker, R-Penn., is supportive of the idea of universities' working with business to transfer innovations in research to the market.
But Walker balked on whether government should subsidize and interfere with business choices about which technologies to pursue.
