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Present System

As it stands now, higher education
is subsidized by the state
governments, a plan which is
favored by those who oppose
the proposal. The panel indicated,
however, that one purpose of the
bank would be to slow the growth
of state support of education.

The rapid rise of tuition that
would be borne by the student,
then, would force most middle
and lower income families to
borrow from the bank. This
would force them to enter into
"life-indenture," say the opponents.

The opponents argue that repayment
of the loan would be
based on the borrower's subsequent
income, so lower earners
would end up paying only
part of their loan, while higher
earners would conceivably pay
back more over the 30 year span
than they borrowed.

Mr. Saunier said this would
discourage students from more
affluent families from using the
bank, while low earners such as
ministers and teachers would feel
a sense of lost honor or pride
since they would not be able to
repay the entire loan. He thus
questioned whether the bank
could be self-sustaining.

The two associations which is- |