Clinton's College Plan
By now, the particulars of President Clinton's proposal for funding higher education are well known, not to mention hotly debated: His program would make families earning less than $100,000 annually eligible for a $1,500 tax credit (known as the Hope Scholarship) for each student's first year in college. A family would be eligible for a second year if the student maintains a B average and avoids a drug conviction. The proposal also offers a phased-in $10,000 tax deduction for college tuition or job-training.Skip to next paragraph
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Mr. Clinton is promoting his plan by saying it will provide historic new access to higher education. "It will open the doors of college education wider than ever before," he said recently. While it's true that the program goes a long way toward addressing one of the public's most pressing concerns - paying for college - potential problems exist.
Tuition hikes, for one. Many analysts worry that tax breaks would give colleges and universities a strong incentive to raise tuition further. The idea is that families would be willing to pay higher prices because they would have more money in their pockets. Colleges and universities, for the most part, say this simply won't happen, that they're committed to trying to keep a ceiling on tuition increases. And it does seem unlikely, given the public scrutiny and political pressure, that these institutions would quickly back down from such a commitment. We certainly hope they won't.
Whether they would reduce financial aid is another question. The American Council on Education, which represents about 1,300 of the nation's colleges and universities, says no. These schools should recognize that the money available from the tax credits would not meet students' full financial needs. More likely, if Clinton's tax proposals pass, student aid budgets will neither grow nor be reduced.
Those who say the tax incentives would be hard to administer, however, are correct. Part of the program, the Hope Scholarship, potentially could force the Internal Revenue Service to collect students' academic transcripts to make sure tax breaks go only to those who maintain a B average after the first year of college.
The Hope Scholarship is modeled after a program in Georgia that gives students who graduate from high school with a B average or better free tuition and a book allowance at any public university in the state for four years, as long as they keep their grades up. The program is funded by a state lottery. Though it has had good results in Georgia, it may not have the same success on a national scale. For one thing, grading scales vary from college to college, teacher to teacher. Many in Congress, understandably, are worried about the potential for abuse of the evaluation process. Congress is working with the Treasury Department to find a simpler approach.
Finally, skeptics say, the tax incentives stand to benefit families who were planning to send their children to college anyway, rather than poor families who pay lower taxes. The Clinton administration itself admits that this is primarily a program for the middle class. Even so, it recently took the right step when, in response to the criticism, it shifted several billion dollars it had planned to put toward the Hope Scholarships into the federal Pell Grant program, which pays the college tuition costs of 3.6 million of the country's neediest students. By doing so, the president moved a little closer to fulfilling his promise of making the first two years of college almost as universal as high school. As a goal, that's hard to argue against.