U., city close to scholarship deal

and STEPHANIE DESMON The University and the city are close to an agreement that would increase the University's financial aid commitment to Philadelphians, while reaffirming its position on the required number of scholarships it must provide local students. According to a document obtained by The Daily Pennsylvanian, the University would continue to award a total of 125 so-called Mayor's Scholarships -- as prescribed by a 1977 city ordinance -- but would raise the value of those awards. And over the next five years, the University would pay non-Mayor's Scholars from Philadelphia who are eligible for financial aid an additional $500 each. The University also would agree to intensify efforts to recruit graduates of Philadelphia schools -- something critics have accused the University of failing to do. The proposal is outlined in a memo from City Council President John Street to other Council members. The memo, still in draft form, paraphrases an agreement being worked out by city and University officials. The proposal has not yet been approved, and University officials said the draft has since been revised and stressed that the memo paraphrasing the proposal is not entirely accurate. Arthur Makadon, the University's outside lawyer, said last night that the memo is "wrong in material ways," although he would not specify how the memo is incorrect. By 1997, according to the memo, the Universty plans to greatly increase the number of Philadelphians who matriculate here to 500 students, providing all who qualify with aid in the form of loans and grants. Financially, this means the University could be providing almost $5 million annually to Philadelphians. However, that amount would still fall short of what a class-action lawsuit claims the University owes under a city ordinance. The suit, filed last October and still in litigation, claims the University owes 500 full-tuition scholarships each year -- totalling over $7 million annually. Although any agreement between the city and the University would have no bearing on the suit, the terms of the proposal could be seen as an attempt by the University to compromise with City Council members who oppose the University's legal position. If finalized, the draft would overhaul the way in which the University gives out Mayor's Scholarships. Up to now, scholarship winners -- like all financial aid recipients -- receive an aid package consisting of loans and grants. But, unlike most students, Mayor's Scholars currently receive an extra grant of $500 to help offset their student loans. Under the proposal, the University would entirely replace those loans with additional grants. Executive Vice President Marna Whittington said last night that the University has been seeking an agreement as quickly as possible in order to improve its chances of receiving state funding when the Pennsylvania legislature reconvenes later this month. In July, the legislature passed a new state budget without acting on the University's request for $41.2 million in aid. Some lawmakers had linked the funding to the University's failure to compromise its position on how many Mayor's Scholarships it must offer. The scholarship debate centers on how many awards a 1977 city ordinance requires the University to provide. The ordinance requires the University to award scholarships in return for rent-free city land the University received. The lawsuit, filed by a group of labor unions, student groups and several individuals, alleges that the ordinance requires the University to provide 125 new scholarships each year for a total of 500 at a time. The University maintains it owes 125 awards total during each year. University officials, contacted last night, expressed regret that the unfinished proposal would be made public. "We are at a very sensitive point in our discussions," said John Gould, executive director of the president's office. "I would be very sorry if at an inappropriate time an informal summary not yet approved by the University, of an agreement not yet signed with the city, were published, because it would be misleading and might upset the negotiations." "Unfortunately we have an awful lot of people that want to have a lot of say as to what we're doing," Whittington said. General Counsel Shelley Green refused to comment on the memo. While Whittington said the proposal merely reflects the position the University has maintained all along, a lawyer representing the plaintiffs in the lawsuit disagreed. "The only thing that is clear is that the University seems to find the position it has taken for the last 18 months to be untenable," said Thomas Gilhool, an attorney with the Public Interest Law Center of Philadelphia.