Discuss potential tradeoffs for distressed rural areas when shifting from one form of rural development assist. to another, particularly when shifting to greater use of gov¿t.-guaranteed loans. The study also uses correlation analysis to document the extent of targeting rural development programs to highly rural areas and to rural areas experiencing distress in the form of poverty, low employ., and population decline. Findings indicate that distressed rural areas might fare worse than other non-metro areas with some kinds of shifts, such as reducing grants and direct gov¿t. loans to fund increases in guaranteed loans. The effects on distressed areas would depend on the form of distress, the programs involved, and how they are targeted geographically.