President Reagan’s proposed budget for 1987 contains a segment which would drastically change the nature of federal student aid. As a result, loan processing is being delayed and confusion about the proposed changes reign.

The budget, which will now go before Congress, proposes to cut Pell grants by $1 million in 1987. National Direct Student Loans, along with Guaranteed Student Loans, are also threatened. And work-study would be eliminated.

The rationale behind these changes is that a new loan program, Income Contingent Loan (ICL), would replace the old forms of aid. $600 million will fund the new program. The ICL would not have a fixed interest rate, but would be tied to the student’s earnings after graduation.

While the new loan potentially could give more flexibility in how much students could borrow and thus what types of schools they could attend, there are real problems with the new plan.

Because other programs would be cut or eliminated, the proposal, says Paul Simon, D-Ill., “would further limit access of those of modest means to higher education, and it runs counter to much of what secretary Bennet has said about improving the quality in our schools.” This, plus the administrative difficulty of pegging interest rates to fluctuating incomes, makes Reagan’s new plan undesirable.

The ICL proposal places its faith in a student’s future earning power in order to replace funds from year to year. Implicitly it places its faith in a continuously growing economy and supply of well paying jobs. Whether these events will occur or not, in the meantime, many students who would gladly take out regular student loans and participate in work-study are having their futures threatened.

It has recently been suggested that college students nowadays place too much emphasis on working toward a career while in school and therefore are limited in their course selections. In this instance, it is argued, students are not able to receive the same well-rounded education that was had by their predecessors.

By basing loan availability upon a student’s potential to produce after graduation, Reagan’s plan encourages students to go full speed ahead, concentrating on their fields of study and neglecting the opportunity to take a wide range of available classes in all subject matters.

For future economic strength, there is no better investment than quality education. And economic well-being and self-reliance are integral parts of national security. We can only hope that this is foremost in the minds of legislators as they consider the president’s student aid proposals.