By David R. Kazak

A possible elimination or at the very least, reduction of the direct student loan program by Congress does not worry SIUC’s financial aid director, because she said, the legislative process will take a long time to play out.

Financial aid director Pam Britton said if SIUC is eventually forced out of the direct loan program, there is plenty of time to make contingency plans.

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She said even if the proposed reduction or elimination does pass Congress, President Bill Clinton has vowed to veto the bill, which will extend the time SIUC has to participate in the program.

Two GOP bills, which call for the elimination or reduction of the direct student loan program created by Sen. Paul Simon, D-Ill., passed through both the House and the Senate last week.

The Senate budget bill calls for a reduction of direct loans to 20 percent of the total federal loan volume. The current level for direct loans is more than 35 percent.

Simon spokesman David Carle said the reduction proposal could force one-third to one-half of participating schools out of the program.

The House budget plan calls for the elimination of Simon’s program altogether.

A Congressional conference committee will now combine the two bills into one package.

Carle said Congress is expected to vote on the combined package this week.

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The president has vowed to veto the GOP budget, which includes the financial aid cuts, when it reaches his desk.

Britton said Clinton’s promise of a veto is the reason University officials are not yet concerned about how the Republican budget will affect SIUC.

We are not making any contingency plans at the moment, Britton said. We certainly hope to remain in the program. It has been nothing but helpful.

We are very hopeful the president will veto the budget.

If Clinton vetoes the budget the Republicans will not have the two-thirds majority needed to override the veto. Carle and Britton both said they believe this could save the direct loan program.

It’s still a little early in the process, Britton said. Anything could happen at this point.

Simon’s program has been praised by SIUC students, don’t have to wait in line to get their loan money, and administrators, who said processing of loan paper work has become much easier.

It also has been criticized by Republicans as costing too much money to maintain.

Republicans like Sen. Nancy Kassebaum, R-Kan., and Rep. William Gooding, R-Pa., cite a Congressional Budget Office report that states Simon’s direct loan program costs taxpayers more than $1.5 billion.

Kassebaum said she believes Simon’s program is only in a demonstration period now, and a 20-percent cap saves federal money.

Savings are found by capping the direct lending program at 20 percent, an appropriate level for a demonstration project, Kassebaum said.

However, Democrats have said that the program saves money, despite the CBO’s report.

Britton, using SIUC’s experience over the last six months as an example, said the program saves money. She said there is less paperwork and therefore less labor costs.

Simon called the Republican effort to reduce or eliminate the program the result of banking industry pressure to get rid of the program.

Let’s call this the new budget the Banking Assistance Act because that is all it is, Simon said. If we need a welfare for banks, let’s at least recognize that fact.

Simon said his program allows for competition among banks and the government. Without the program, he said, students will have no choice but to deal directly with banks.

Simon also cites the popularity of the program as another example of Republicans listening to lobbyists rather than the public.

It is interesting that not a single college who has asked to get into the program wants out of it, Simon said. It’s simple. There is public interest and there is special interest. It’s obvious who is serving the special interest.