Hearings on reauthorization of the Higher Education Act of 1965 that were held in Portland, Maine, in 1985 are presented. It is noted that in Maine, which is a rural state, family income is low and 56% of its students depend on federal financial aid programs. Specific concerns include: how costs at the University of Maine system compare with costs of other state universities; the effects of student costs at Maine's state colleges on the need for student aid; proposals to consolidate loans and structure repayment on a graduated rather than a flat rate basis; the heavy indebtedness that professional students incur; proposals for loan deferments for individuals who become teachers or lawyers who enter public sector positions; a proposal to increase the Parent Loans for Undergraduate Students Program from $3,000 to $4,000 per student per academic year, up to a total of $20,000 as an aggregate limit; the Reagan Administration's proposed 53% cut in TRIO programs, which assist bright, low-income students realize their academic potential; characteristics of loan defaulters, including the underemployed and unemployed; a recommendation to simplify Title IV of the Higher Education Act; and a proposal to allow for inflationary increases in the Title IV programs to keep up with increases in college costs. (SW)