The financial crunch in the University has hit the Harvard College Admissions Office, causing what Chase N. Peterson '52, dean of Admissions and Financial Aid, has called a "crisis" in Harvard's ability to give scholarships to all who need them.

According to a report from Peterson to the Faculty released this week, his office will need an increase in support of up to 50 per cent-to $2.5 million-from the Faculty's already hard-pressed unrestricted budget to avoid having to turn down qualified sons of poor and middle-income families. This is even with a small drop-the first in several years-in the number of scholarship students projected for the entering class.

The increase is needed to make up for half of an expected tuition and board/room fee increase of $300-$400, and because even with a slight reduction from 1974, the class of 1975 will include 75 more scholarship students than the graduating class of 1971. This latter increase, Peterson said, "reflects our success in reaching financially poor students from white blue-collar families as well as from black and other cultural minorities." Almost half the current freshman class is on scholarship.

Where Else?

Humphrey Doermann, assistant to the dean of the Faculty for Financial Affairs, said, yesterday Dean Dunlop has accounted for Peterson's minimum requirements-based on the lowest tuition increase figure-in his projected unrestricted budget for 1971-72. But that budget has a projected deficit of $1.5 million, a figure Dunlop has called "unacceptable." Dunlop and other administrators have been trying desperately to find places other than scholarships to make cuts.

Peterson said that although admitting all students regardless of financial need has never been official Harvard policy it has been standard practice since the early 1960's and that to discontinue it, "a full and public notification to . . . alumni, prospective applicants, and our other constituencies would be required."

Discouraged Donors

Such a step, he said, besides being "counter to the intellectual and social evolution of Harvard College," might discourage gifts to the similarly pressed Harvard College Fund. "Some donors have criticized Harvard for what they feel to be either excessively lenient or harsh responses to contemporary issues; few donors are unsympathetic to our scholarship program which allows the admission and support of the best candidates," Peterson said.

Requiring upper-class scholarship students to make up more than half their expected cost increase would "conflict with the understanding they had of the scholarship program when they elected to come here," Peterson said. "Therefore." he said, "if our budget request cannot be met . . . . . we would be forced to make a marked reduction in the number of scholarship holders in [the incoming] class."

How many potential scholarship students would have to be turned down. and who would they be? The statistics are depressing, According to Peterson,elimination of 100 large scholarships for low-income students or of 200 to 300 scholarships for middle-income students would save $300,000 to $350,000.

This is only half the admissions committee's needed increase in unrestricted funds. Yet: "In the first case the College would be closed to applicants with total parental pre-tax income below $8000 to $10,000. In the second case we would have few students from families in the $12,000 to $20,000 range."

Even if the needed money comes through, scholarship students will be expected to provide $1400 a year from their summer and term-time earnings. The amount their parents would have to supply will also increase.

Peterson concedes that already many parents and students cannot come up with what Harvard expects. Last year the University loaned students more than $900,000 of Harvard and Federal money to make up the difference. Already many students are forced to exceed Harvard's attempted goal of not more than $4000 of accumulated debt each during their undergraduate careers.

Lifelong Debt

Peterson's report suggests several long-term solutions to the scholarship problem. One that has been suggested elsewhere would allow students to borrow all the money they need from their university or the government, then repay the loan as a percentage of their income for the rest of their lives.

This way a person who "by design or failure" did not make much money would not be saddled with a crippling debt, while those who-in the traditional Harvard mold-ended up in more financially rewarding careers would pay a premium.

There is no likelihood the government will start such a program in the near future. In the meantime, Peterson said, Harvard is considering the possibility of loaning existing funds under a Federal plan called Guaranteed Insured Loan Program. GILP provides guarantees and interest subsidies for bank loans to students. With tight money, many banks have stopped making such loans. To qualify for such a program. Peterson said yesterday, Harvard would somehow have to constitute itself as a bank.

"Some would say that Harvard cannot be expected to finance the 'social revolution' and do everything else that she is asked and required to do," Peterson said. "Others feel that essentially open access to Harvard of the best applicants, encouraged to apply and chosen without regard to financial background, is the only way Harvard can meet her responsibilities."