Middle Income Student Assistance Act

Middle Income Student Assistance Act - Amends the Higher Education Act of 1965 to limit the assessment rate that may be used to determine the expected family contribution for basic educational opportunity grants after the 1978-1979 academic year. Provides guidelines for independent students' basic grant determinations regarding: (1) contribution exemptions; (2) rate of assessment on non-exempt assets; and (3) subsistence exemptions. Revises certain provisions of the Act regarding: (1) non-Federal payment requirements for State applications for Federal incentive program grants; (2) written agreement requirements for federally insured student loans and Federal payments to reduce student loan interest costs; and (3) the method for determining the quarterly rate to be paid to participating lenders.

Stipulates that no veteran shall be ineligible to participate in special postsecondary education programs for the disadvantaged under Title IV of such Act because of age. Extends to fiscal year 1980 Federal payments to institutions of higher education for veterans' cost-of-instruction costs, and makes such payment depend upon an institution's good faith effort to continue to enroll veterans.

Increases the entitlement percentage of a basic educational opportunity grant to be paid when insufficient funds are available to pay the full basic educational opportunity entitlements.

Lowers from $215,000,000 to $50,000,000 the amount of appropriations which must be available for community college development and community service and continuing education programs before supplemental basic educational opportunity grant funds can be made available.