The Michigan Daily


Vol. XCI, No. 60-S

Ann Arbor, Michigan-Wednesday, August 12, 1981

Ten Cents

Twelve Pages

New student
loan program
established

By MARK GINDIN
Daily staff writer
Among the many provisions passed
by Congress last week under the um-
brella of the massive Reagan budget,
are guidelines to set up a new federal
student loan program that "isn't a bad
trade-off" for other aid programs cut
by the same budget, according to a
University official.
The new loan program included in the
president's budget-the Auxillary
Loans to Assist Students-is designed
as a more comprehensive program
than the program it replaced, the
Parental Loans for Undergraduate
Students (the PLUS loans). Parents of
dependent undergraduates as well as
independent students will be able to
borrow up to $3,000 each year at 14 per-
cent interest regardless of their or their
family's income, the official said.
THOMAS BUTTS, assistant to the
vice-president for academic affairs,
said that the program "will get off the
ground this year" and begin providing
loans funneled through the state gover-
nment.
In accordance with new Reagan ad-
ministration provisions, the Guaran-
teed Student Loan Program will have a
financial needs test for some students
whose applications are processed after
Oct. 1, and the new ALAS program is

expected to help out those students who
lose aid because of the Reagan
guidelines, said Butts.
The new loan program will require
payback of the money to begin only 60
days after it is received, which is dif-
ferent from the GSL, which allows
students to defer repayment until mon-
ths after graduation, at minimum
payments of $30 a month. Minimum
payments of $50 per month will be
required for the ALAS loans.
BECAUSE THE interest on the ALAS
loan is 14 percent, rather than the
market rate of about 18 percent, Butts
said there was a "built-in subsidy" and
the banks will be paid that "special
allowance."
"The new loan isn't a bad trade-off"
See GUIDELINES. Page 2
Thomas Butts is the University's
liaison with the federal government in
Washington. He has been closely in-
volved with the changes the Reagan
administration has proposed for federal
aid programs to students, He talked
with the Daily about those changes
yesterday. See story, Page 5.

1

Daily Photo by PAUL ENGSTROM
Letting the sun shine in
The sun reflects off the specially designed windows of the new law library.
Although the library is completely underground, these windows are dug into
the ground in such a way that the sunlight can come in. See story, Page 3.

PR OPOSED $75 MILLION COST HIKE CALLED TOO STEEP:

Agency rejects
By JENNIFER MILLER increase.
Daily staff writer THE MICHIGAN De
As expected, the University's bid to hike by $75 make the final decisio
million the cost ceiling for its massive project to build project's cost from
a replacement hospital was rejected yesterday by a "within three to fou
public health planning agency, the Comprehensive Division Chief Ed Jam
Health Planning Council for Southeastern Michigan. the MDPH encourage
But, a CHPC-SEM official called the rejection by increase.
the Council's executive committee "an exercise in Gov. William Millike
futility," and said the state Department of Public advised the Universit
Health, which will have the final say on the cost ahead with the reque
proposal, will almost certainly approve the hike: legislature has comm
MEMBERS OF THE Comprehensive Health Plan- funds and Building Aut
ning Council's Executive Committee stressed that "The University did
there is unquestionably a need for a new hospital, but seek more money. We b
rejected the additional cost proposal by a 9-7 vote. to the lower figure," sa
Calvin Lippitt, a CHPC-SEM committee member, spokeswoman Marsh
told hospital and University officials present at the request of state official
meeting, "You should be able to go back to the ONE OF THE issu
drawing board and come under budget." meeting concerned th
But some of the members who voted to approve the finance the hospital. A
additional cost cited the economic benefits and jobs hospital's patient
that the additional construction and renovation would Medicaid/Medicare pa
reap for the southeastern area as justification for the SEM members were c

'U' Hospital bid

partment of Public Health will
n on the proposed hike of the
$210 million to $285 million
ir weeks," MDPH Planning
tes said. Earlier this summer,
d the University to ask for the
n and the state legislature also
y earlier this summer to go
st for an increase. The state
itted $173. million in general
hority bonds to the project.
d not instigate the decision to
felt it would be prudent to stick
aid University hospital project
a Bremer, "It was at the
s."
es raised at the CHPC-SEM'
e ability of the University to
s the largest percentage of the
revenues comes from
ayments-38 percent-CHPC-
oncerned about the impact on

the hospital's revenue that cuts in Medicare would
produce.
Hospital Director Jeptha Dalston said any
Medicare cuts would be a "loss of revenue, but not
enough to affect the basic financial feasibility of the
hospital."
Chief Hospital Financial Officer B. Saunders
Midyette said the hospital would not lose more than
$2 million as the result of the cuts. When CHPC-SEM
member William Johnson asked how the hospital
would absorb the loss, Midyette said a reduction in
hospital staff might be one of the solutions. Planned
reserves and excess demand for medical services
will also make up for any loss, Midyette said.
Blue Cross-Blue Shield of Michigan has strongly
opposed the hospital project "because of its elaborate
scope and costliness" according to a position
statement presented to the committee.
THE STATEMENT reads, "The replacement
hospital project alone will increase total hospital
operating expenses (at the University) in excess of
$30 million per year, or 25 percent. Costs per patient
day will increase by more than $100, to over $530."
See HOSPITAL, Page 4