"Everybody made a hell of a lot of money this summer," the director of the work-study program said yesterday, explaining why his office has accepted fewer students this term than last for the federal aid plan.

Larry E. McGuire '58, the newly appointed director, said expenditure of more than half the $681,000 in federal funds for summer work study has led to many "sorrowful conversations" with employers and students turned away from participation this semester.

Apparently the former director, Charles O. Honnet, who is now in Corvalis, Oregon, without a telephone and unreachable for comment, hired more students than in the past because he thought most students prefer summer jobs to work during the year.

But, McGuire said, instead of the customary 60 out of every 100 participants working, with slightly less than half dropping the program, all 100 found jobs this summer, dramatically draining the budget.

"He thought he would have enough left over for a decent-sized program this year," McGuire said, but the unpredicted tapping brought on new problems. The program is limited this year to students whose parents contribute less than $500 toward their tuition.

Close to 350 Harvard students and 85 Radcliffe students received federal money this summer, to work in a non-profit, educationally oriented organization. The grant, under which the government pays 70 per cent of a student's salary, offers jobs for roughly 600 Harvard students and 160 Radcliffe students.

Charles Bechtold, Health Education and Welfare branch office chief for financial aid, said yesterday his office this year was forced to cut back funds to schools when Congress "in its wisdom did not see fit" to reallocate last year's 38 per cent supplementary grant to the program.

Although Honnet thought summer work-study to be the more necessary, other administrators involved in financial aid disagree.

"My preference," L. Fred Jewett '57, dean of admissions and financial aid, said yesterday, "is that of the new director--probably to devote somewhat less to summer jobs and more to term-time jobs."

But he added that the question is a matter of judgment, and that Honnet had not expected so large an influx of eligible freshmen.

The University is penalized for unspent funds in the appropriation it receives for the following year, and is therefore especially attentive to early distribution of funds.

But Jewett noted a trend toward more students actually taking their jobs, "an indication of financial concern of students here." Or, as Bechtold said, "These are troublesome times for financial aid."