Recommendations and issues concerning reauthorization of the Higher Education Act of 1965 are presented in testimony from representatives of public and private colleges, students, counselors, lenders, guaranteed student loan programs, state loan and grant administrators, and student aid officials. Specific references are made to the effect of the Higher Education Act on Iowa colleges, and the effect of reductions in federal aid on access and choice in postsecondary education. The act is the primary source of federal support for colleges and universities and college students. A significant aspect of the Reagan Administration proposals is the $4,000 cap for any student receiving federal aid, including loans and work-study grants. Another proposal that is considered is placing an income ceiling of $25,000 on those who can receive the Pell Grant or campus-based aid. It is suggested that the $4,000 cap on federal aid would have a serious impact on private colleges and on high-need students attending public institutions. Additional topics include: the effect of the $4,000 ceiling on graduate and professional students, outcomes of governmental decisions to emphasize loan programs administered outside of higher education, and priorities for categorical programs that are part of the Higher Education Act. (SW)