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One hundredfve years of editoraidfreedom
October 2, 1995
louse coi*ttee approves cutting direct student loans
Senate committee has already approved plan to
save more than $10 billion through various cuts
y Ronnie lassberg
aily Staff Reporter
The House Economic and Educa-
onal Opportunities Committee ap-
roved a plan Thursday that would
liminate the federal direct student loan
Earlier in the week, a Senate commit-
ae had approved a plan that would cap
irect loans at 20 percent, eliminate the
nterest-free grace period and charge
niversities a 0.85-percent fee based on
he total loan value.
The plan in the House also would
liminate the six-month interest-free
race period following graduation.
"The bottom line is this: Republicans
elieve the single most important issue
facing young Americans is the sky-
rocketing national debt that threatens
the very future of our country," Rep.
William Goodling (R-Pa.), the
committee's chairman, said in a state-
"We believe that balancing the fed-
eral budget may well be the single
best thing we can do for our children
and grandchildren, and we are proud
of the fact that we are getting the job
The proposals in both the House and
Senate would save more than $10 bil-
lion over the next seven years. The
plans will be included in the budget
reconciliation bill, and must be approved
by both the Senate and House before it
goes to President Clinton.
Under the direct loan program, uni-
versities work directly with a servicer
contracted by the Department of Edu-
cation. Under the guaranteed loan pro-
gram, which makes up the remainder of
loans, the University had dealt with
1,400 lenders, guarantors and servicers
in providing financial aid.
All federal student loans at the Uni-
versity now come through direct loans.
"It's not easy to keep track of all the
bad ideas that have come out in the past
few weeks," U.S. Education Secretary
Richard Riley said in a teleconference
last week. "Capping or killing direct
lending means forcing students into a
more cumbersome and complex pro-
cess, and taking away from schools the
choice to decide what works best for
Deputy Education Secretary
Madeleine Kunin said during the tele-
conference that the direct loan system
has created efficiencies and better ser-
vice for students.
"We started direct lending because
the present system was not working
effectively," Kunin said. "I think even
the critics of direct lending will say that
it has been very healthy for the system
to have competition."
But Republicans, using figures from
the Congressional Budget Office -
which are disputed by both the Univer-
sity and the Department of Education
- say eliminating the program would
save $1.5 billion.
Officials from the Department of
Education counter that eliminating the
direct loan program will not save money,
but will provide private funds to the
"Even as they were cutting funds for
student loans, a Senate committee voted
to give student loan guaranty agencies a
$1.8 billion bonanza in taxpayer money
from federal assets that they hold," Riley
"This is simply a gift of public funds
to the guaranty agencies. A number of
court cases have made it very clear in
federal court in a number of different
states that these funds held by guaranty
agencies are federal property, which
held in trust by them, and this is a very
clear gift of these funds, which are
public property, according to these court
The New York Times reported yes-
terday that Sen. Nancy Kassebaum (R-
Kan.), chairwoman of the Senate Labor
and Human Resources Committee, is-
sued a statement saying that the matter
had been corrected.
"There was some concern that the
Department of Education was going to
raid that money, use that money in their
direct lending program," she told the
Times. "It obviously can be fixed."
Rep. Howard McKeon (R-Ca.),
chairman of the Subcommittee on
Postsecondary Education, Training
and Life-Long Learning, said in a
statement that the House bill also hurts
the lenders. Of the cuts in the House
plan, $4.9 billion will affect lenders,
guaranty agencies, secondary markets
"Over half our savings are being ob-
tained from the lender and banker com-
munities," McKeon said. "I guarantee
you they are not happy with the hits
they are taking."
Y Y S1 f
Regents deny they
Art museum opens Japanese gallery
By Eileen Reynolds
For the Daily
After a remodeling project, the
University's Museum of Art opened its
Japanese Gallery yesterday in a more
traditional setting with the hopes of at-
tracting more people to the collection.
"We felt creating a traditional set-
ting, and notjust putting pieces in cases
with labels, would add interest. It gives
an imaginative dimension, beyond an-
cient pictures," said Mark Nielsen, the
The collection, consisting of pieces
like incense chests and warrior's ar-
mor, was previously displayed in the
same room. However, few people un-
derstood the significance of all the
pieces, Nielsen said.
Under the supervision of Marshall
Wu, the senior curator of Asian Art, the
complete remodeling took place more
than four months ago, in hopes of creat-
ing a gallery in a more traditional Japa-
"We wanted to reach more people
than just an academic audience, we
wanted to draw in the community,"
The reopening was celebrated with
the display and presentation Qf Japa-
nese ceremonies and traditions. The
highlight event, a traditional Japanese
tea, took place in the newly added tea
"We wante to reach ore people
than just an academic audience. We
wanted to draw in the community."
- Mark Neilsen
By Josh White
Daily Staff Reporter
Following President James J.
Duderstadt's announcement Thursday
that he will resign in June, Gov. John
Engler pointed a finger at the Univer-
sity Board of Regents, saying there was
a "coup" within the board to oust the
While no identifiable sources have
come forward to substantiate the accu-
sation, Engler remains firm in his belief
that Duderstadt's resignation was the
result of pressure from the regents.
"There have been regents who have
talked to the governor in the past few
months about problems on the board,"
said John Truscott, Engler's spokes-
man. "I know that there will be people
who will come forward with more in-
formation about what has happened.
"The members who are responsible
and the people in the University admin-
istration who know what is going on are
not rced "" to comment on threcord for
fear ofretaliation," Truscott said. "Some
want to sweep this under the rug, but
Governor Engler hastchosen to bring
this out into the open to be dealt with."
In various speeches in metro Detroit
on Thursday, Engler accused Regents
Deane Baker (R-Ann Arbor), Laurence
Deitch (D-Bloomfield Hills) and
Rebecca McGowan (D-Ann Arbor) of
plotting to oust Duderstadt.
Deitch said that there have been dif-
ferences between board members and
the president, but that Engler's claims
of a coup are untrue.
"Governor Engler's information is
incorrect," Deitch said yesterday. "I
don't want to continue to be in a contest
of accusations and counter-accusations
with the governor's office, but what he
has heard is wrong."
Deitch also said he believes no new
information will be discovered that
would implicate any regents in connec-
tion to Duderstadt's resignation.
"I don't expect anyone - regents or
administrators - to say anything about
this because there is nothing to say,"
Deitch said. "Everyone I know is dedi-
cated to the future growth of the Uni-
versity and its ongoing success. We are
moving on in unison, and the president
is a large part of moving toward the
But Truscott said Deitch was highly
involved in the "removal" of the presi-
President can collect a
year's salary on sabbatical
By Amy Klein
Daily Staff Reporter
After he steps down as University
president in June, James J. Duderstadt
will be entitled to a one-year sabbati-
cal at full salary before he returns to
' The Board of Regents decided in
1993 that Duderstadt would receivp
$260,709 for one year, and then the
average of the top three professor sala-
ries in the College of Engineering, if
he vacated his post but still remained
at the University.
"There were not many precedents
for the president going back to the
faculty. That's why they made a spe-
cial action." said Walter Harrison.
vice president for University rela-
Duderstadt said he plans to remain
as a professor of science and engineer-
ing again after 15 years as a dean,
provost and president. Associate Vice
President for University Relations Lisa
Baker said Duderstadt has not an-
nounced whether he will take a sab-
"If that's an option that's presented
to him, then he might take it, but right
"Larry Deitch is lying," Truscott said.
"He is one of the major problems on the
board, as people will see become evi-
dent as more information comes out.
He is one of the major elements of the
Duderstadt coup plot.
"Ifeverything was so fine, why would
Duderstadt up and resign so suddenly'?"
Truscott asked. "That is not what hap-
pens when everything is cordial and
The only person to support Engler's
claim came from an anonymous source
in Friday's Detroit News.
"I'm sure Engler's right and every-
body involved knows that," the News
quoted the source as saying. "Every-
body just wonders how he (Duderstadt)
has lasted as long as he has."
Walter Harrison, vice president for
University relations, has denied any
now it doesn't sound very likely,"
The 1993 regents action also in-
cluded a $16,666 equity adjustment,
which has been approved each year for
the last three years, and a 5-percent
merit-based salary increase. Board
members said this would bring
Duderstadt's salary in line with that of
The money for the equity adjust-
ment was taken from the auxiliary
activities fund, rather than from the
tax dollars in the general fund.
At regents meeting in September,
the board approved a $28,288 salary
increase for Duderstadt during fiscal
A few months before announcing
his resignation, Duderstadt started
building a new Ann Arbor home for
his retirement. Construction of the
house began last May and is expected
to be completed in January.
"The house illustrated two things,"
Baker said. "He wanted to stay in Ann
Arbor and he was thinking about his
future and what would happen if he
went back into teaching. It was just
"The president resigned, he did it of
his own free will, and I know of no plot
or coup or anything like that," Harrison
said. "I know that the president was not
approached by the regents about any-
thing of this sort.
"And I don't think that anything an
anonymous source says can be taken
with any credibility," Harrison said in
reference to the News report. "When
you are under the mask of anonymity,
you can say anything you want about
anything. It makes some people feel
very important to be quoted anony-
Duderstadt said his resignation comes
after the realization that many of his
goals had been accomplished.
See DUDERSTADT, Page 3A
Inside: Engler attacks Board of
Regents. Page 3A
house, part of the extensive renovation.
Ann Arbor residents Kiyoko Ishikawa
and Mutsumi Yoshida demonstrated the
ancient rituals of the traditional Japanese
tea ceremony (cha-no-yu).
The traditional Japanese tea is the
ancient practice of serving tea accord-
ing to a strict ritual, defining the way it
is prepared and served. Rooted in Zen
Buddhism, the art of tea ceremony sym-
bolizes aesthetic simplicity through the
elimination of the unnecessary.
The ceremony takes place in a tea
room, or cha-shitsu, generally a small
house situated in a garden or special
room. Two types of green teas are
served. A gong is sounded to signal the
beginning of the ceremony. Following
a prescribed pattern, the host prepares.
the tea with utmost exactness.
Japanese flower arranging and
origami also were featured events.
Members of the Ann Arbor Ikebana
Society introduced visitors to Japanese
flower arranging. Simple arrangements
consisted of a lot of greenery, comple-
mented by single colorful flowers.
Origami expert Don Shall conducted
a drop-in workshop at which he demon-
strated how to create elegant figures by
folding single sheets of paper. Swans,
jumping frogs, and sailboats were all
taught to novices, who quickly mas-
tered the art.
Approximately 75 to 100 people at-
tended each of the four tea ceremonies.
Wu said, "the event was a total success."
Being a humble Midwestern museum,
spokesman James Manheim said, "We
are attempting to attract more students
to the museum. All are welcome."
Israel prepares to pull
out of the West Bank _
U.S. jury convicts sheik, 9
others for bomb attempt,
* Foreign minister says
troops will hand over
Los Angeles Times
JERUSALEM-Israel will begin its
more afraid of what would happen if
we didn't do it," Peres said.
To Jewish settlers, Peres' remarks
-the first announcement by an Israeli
official on when and where redeploy-
ment will begin - were like a red flag
being waved in front of them.
NEW YORK (AP) - A federal jury
yesterday convicted 10 Muslim radi-
cals, including Sheik Omar Abdel-
Rahman, of conspiring to bomb the
United Nations, a bridge and tunnels in
order to frighten the United States into
changing its Middle East policies.
The jury also convicted one of the
defendants, El Sayyid Nosair, in the
19on 'killino f vetremist RAhi Meir
Afterward, she told reporters that the
blind cleric said, "He's not the first
person to go to prison for his beliefs ...
and he won't be the last."
Lawyers for the defendants said all
Security around the courthouse was
increased immediately after the ver-
dict, with uniformed policejoiningdoz-
ens of I marshal s.irors were taken
' ~ I