A substantial nationwide reduction next year in federal grants to graduate students has caused the Graduate School of Arts and Sciences (GSAS) to begin looking for new sources of financial aid.

GSAS has also started emphasizing financial need over academic ability in distributing its presently limited scholarship funds.

The National Science Foundation (NSF) informed GSAS in January that it would award only 1850 fellowships this year-400 fewer than last year-Thomas K. Sisson '48, associate dean of GSAS, said yesterday.

Sisson said that 100 fewer NSF fellowships have been awarded this year than in previous years to incoming Harvard graduate students and present-second-year students seeking award renewals. Ten per cent of the 3000 GSAS students hold NSF grants.

NSF fellowships are two-year awards to doctoral candidates in the natural and social sciences. The grant provides for each year a $2500 cost of education allowance to the University and a $2400 stipend for living expenses to the student.

Sisson said that other Harvard graduate students would be hurt by a $500,000 decrease in grants from the U.S. Public Health Service and loans issued under the National Defense Education Act.

"All GSAS students will be affected by the cuts," Sisson said. Since the University will now have to find financial aid for needy graduate students who before would have received NSF awards, it will have less money to help those in non-science fields, he said.

Residual Funds

Sisson said that the NSF allowance for the cost of education usually exceeds tuition charges, leaving the University with "residual funds." GSAS uses the left-over money, along with alumni gifts and endowment income, to provide scholarships to other graduate students.

He said that GSAS is "investigating new financial aid sources." For the first time, it is attempting to raise scholarship funds among GSAS alumni, he said, adding that it is also looking into the increased use of loans.

Sisson said GSAS will not adopt the deferred tuition plan recently instituted by Yale and Duke. Under such a plan, a student defers payment of his tuition until after graduation.

Hold Onto Your Future

"I do not believe in requiring a student to mortgage his future," Sisson said. "Education is the responsibility of the country at large, which includes parents, alumni and taxpayers."

Sisson said the reduction in federal funds for financial aid is "encouraging a change in thinking here about graduate student scholarships. We think greater emphasis should be put on financial need. Awards are now made primarily on the basis of academic ability."

"We often have trouble with a pyramiding of resources among the ablest students, One student may be an NSF grantee, a teaching fellow and a resident House tutor, while another receives very little financial aid," he said.

Francis G. O'Brien, an NSF official in Washington, said yesterday. "Part of the slack caused by the reduction in direct support to students will be taken up through increased funding for research."