In a vote along party lines, the Senate Budget Committee yesterday rejected President Reagan's education proposals and called for moderate increases in major student financial aid programs while recommending that other programs be cut.

The committee, dominated by the Democrats, voted 13-11 to increase fiscal year 1988 funding for the Education Department by $800 million. The House version of the budget, which will be voted on by the full House today, calls for a $2.2 billion increase in similar programs.

Senators voted to add more than $120 million to the popular Pell grant program and maintain funding for Guaranteed Student Loans. But under pressure to reduce the federal budget deficit by $36 billion in order to meet Gramm-Rudman targets, lawmakers also recommended that funding of smaller financial aid programs be reduced.

Programs such as College Work-Study and State Student Incentive Grants and others would be hard hit by the committee's plan, which aims to cut their budgets by 20 percent.

"Senators were under a lot of pressure to cut the budget," a committee aide who worked closely on the proposals said yesterday.

"We had to cut the smaller programs to offset the gains we wanted to make in the big ones," the aide said.

Harvard has worked closely with higher education associations to lobby for increased funding for student financial aid.

The largest of the federal financial aid programs, Pell grants, provides $3.58 billion to more that three million students annually. Nearly 540 Harvard students receive Pell grants, and almost 4,000 students at the College receive some type of federal subsidy.

The committee's action flies in the face of Reagan's budget, which would have cut subsidies to students by 48 percent, from $8.2 billion to $4.5billion. Senators from both sides of the aisleunanimously expressed support for increases infinancial aid programs.

"This is certainly a significant rejection ofthe proposals of the Reagan Administration," VicePresident for Governmental and Community AffairsJohn Shattuck said yesterday.

"While we are pleased with the increases inPells, it is very unfortunate that they decided tocut a good program like Work-Study," Shattucksaid.

In contrast with the Senate proposal, the HouseBudget Committee recommended last week to boostall educational programs by $2.2 billion--with ayet unspecified "goodly chunk" going directly tofinancial aid programs, congressional aid KathyAusley said yesterday.

The Democratic House is expected today to passthis budget, which is opposed by all 177Republican representatives because it would raisetaxes by $18 billion in order to meet theGramm-Rudman deficit reduction targets.

But Capitol Hill watchers expect a long andhard battle when the Senate committee's proposalreaches the floor because the body is sharplydivided over spending priorities.

After the Senate passes a budget the two housesof Congress will convene a conference committee toreconcile their differences on spending decisions.

Congress is expected to decide on a jointbudget resolution by April 15. The resolution willthen act as a guide when the Senate and Houseappropriations committees thrash out actualspending legislation during the summer and fall