As an $850 million budget deficit threatens to unbalance the state's account books, education officials and legislators say they fear that the Weld administration's cost-cutting measures could drastically bite into public scholarship funding for private universities such as Harvard.

The threat is especially ominous to the dozens of private colleges and universities in the state, since they shouldered a funding cut earlier this academic year. This fall, Massachusetts slashed $7 million from the $68 million it had previously agreed to give to the private schools.

And although it is impossible to predict the final outcome of fiscal wranglings in the state house, officials at private universities say they are worried about any potential loss of state-funded scholarships.

"When times get this tough fiscally, you have to be really worried," says Kevin Casey, director of state relations at Harvard. "[You] don't know what to expect, what you'll be getting from the state."

Harvard's state funding for undergraduates has fallen from about $600,000 last year to little more than $300,000 this year, according to Jim Miller, director of the Undergraduate Financial Aid Office. The entire financial aid budget is about $27 million.

But although Miller concedes that "in the overall scheme of things $300,000 is not that huge," he says that the money "is a lot to cut out of a very tight budget." He points out that the financial aid budget will come under even greater strain as Harvard College tightens its own belt.

Even if the state does decide to cut back on its scholarship money at this late date in the academic year, undergraduate financial aid will not be cut, Casey says. "We have made a commitment to make up lost Massachusetts funds with institutional funds."

Scholarships Easy to Cut

Many senators and representatives on Beacon Hill see the scholarships for private colleges as the easiest item to cut, Casey says, adding that the legislators are working under pressure in order to reduce the deficit by June 30--the end of the fiscal year.

Recently, Weld has hinted at moving away from providing direct grants to Massachusetts students in favor of a loan-based financial-aid program, Casey says.

And if the bill to abolish public-funded scholarships does go through, its most likely effect at Harvard would be to raise tuition, he says.

The cuts will likely impact other Massachusetts schools more seriously than Harvard, since Harvard can insulate the blow through its extensive fundraising ability and its $5 billion endowment.

"We're probably not as affected as some of the other private colleges because our alums have been very generous," Miller says.

Private Schools Cheaper

The decision to cut funding may depend on convincing legislators that public scholarships for private institutions are justified, Casey says, explaining that many members of the State House deny that the scholarships are a top priority, since students have the option of attending public universities if they cannot afford the more expensive tuition costs of private institutions.