May 25, 1970

Dr. Hubert Heffner

Office of Science and Technology
Executive Office Building
Washington, D.C. 205606

Dear Hu,

I understand you have been working very hard in a study of
proposals to shift from fellowships to loans for the support of
undergraduate and graduate education. In general I see this as
more of a book-keeping maneuver which will nevertheless make
certain costs more visible to some members of the community as
compared to others. On those grounds alone I would see no basis
for any very strong opinions one way or the other, although that
might be good enough reason not to provoke a great upset.

There is, however, one implication of a straight loan
arrangement that will need very careful consideration. That ts
the kind of pressure it is going to put on other kinds of funds
that may be available for the support of students, for example
research assistantships on federally supported grants and various
kinda of private moneys. You can visualize the kind of scramble
that there is going to be for the allocation of these extra funde
against the background of a loan system. So I hope you have thought
of some way to minimize the chaos that will resuit. I find ft a
little difficult to see how to frame just the right kind of
regulation that would prevent it, but perhaps you have spent more
ingenuity and effort in trying to work 4t out. If future incomes
are going to be augmented by educational investments, there is
every prospect that the government is going to recover the cost of
education through the existing system of progressive income tax.
If there needs to be any shift at all perhaps it would be gufficient
to change the tax laws, so ag to provide for the capitalization of
personal investments in higher education aB a depreciable aseet.
Thig would have exactly the same effect in the long run as the loan
program you may be studying givéng the continued application of the
progressive tax schedules. I realize that many not be politically as
peaafeble as other approaches but I hope some effort can be spent in
trying to eell it.

yas 3 ty

Sincerely youre,

Joshua Lederberg
Prefessor of Genetics

JL/rr