In a statement released Thursday, members of the House Economic and Educational Opportunities Committee proposed preserving the in-school interest subsidy for students, which University officials have long feared would be scrapped.

The committee proposes keeping the loan origination fee paid by students at its current level of 3 percent. And it proposed maintaing the interest rate reduction on new loans scheduled to take place in July, 1998.

Finally, President Neil L. Rudenstine said last week that he was particularly pleased by the Senate's decision to restore the Javitz and Harris loans for graduate education. When asked about where Harvard's lobbying should be focused next, Rudenstine said the University should focus on restoring the Javitz and Harris programs in the House.

Meanwhile, Rudenstine said he hoped that the education lobby could find a way to "reconceptualize" the budget to defer interest payments for graduate students still in school. According to Rudenstine, current Congressional cuts would make graduate in-school interest the "single largest hit there."

Trouble

While some items have been salvaged, several proposals to remove key funding sources remain on the table.

In order to meet their goal of cutting $10.1 billion from the financial aid budget, Republicans in Congress have considered several measures that could cost Harvard and its students millions.

The House committee released a plan late last week calling for reduction of a federal subsidy to guaranty agencies, lenders and other secondary markets. That measure would save $4.9 billion.

According to Nixon, fewer secondary lenders might continue to lend under the program, since elimination of the subsidy would weaken the lenders' financial position and remove an incentive to lend to students.

Harvard, as a direct lender, would not be severely hurt by that measure. But it would be affected by a proposal to eliminate the government's direct lending program, at a savings of $1.5 billion, Nixon said.

Currently Congress appropriates funds to the University which may be distributed to students on a need basis by the Office of Financial Aid.

The Senate is currently mulling another measure that would adversely affect the University's lending ability. That proposal, which will be debated this week, would impose a 2 percent fee on all loans to educational institutions--a "tuition tax," according to Vice President of Government, Community and Public Affairs James H. Rowe III '73.

Since Harvard makes some $60 million in loans every year, the measure would require a payment of $1.2 million which could otherwise be used for financial aid.

In addition, House Republicans have proposed modifying the six-month post-graduation "grace period" for interest rates on student loans.

Under current procedures, interest on loans does not begin to accrue until six months after a student graduates.