Michael Manning
M.A. candidate, School of Journalism and Mass Communication
University of North Carolina, Chapel Hill
manning1@email.unc.edu
Summary
With parents across the country concerned about the ever-rising costs of college tuition, President Clinton is preparing to send a bill to Congress that, if passed, he hopes will "make the 13th and 14th years of education as universal to all Americans as the first 12 are today" (Burd, 1997, p.A33).
The President's plan relies on a combination of tax credits and/or tax deductions that would give families up to $10,000 a year to help pay for college. But while the Clinton Administration is enthusiastic, both educators and some Clinton aides have expressed doubts concerning the plan's ability to help the poorest segments of the population.
The estimated $43 billion, six-year program would allow families to choose between a $10,000 tax deduction or a $1,500 tax credit for the first two years a student is in college. Families with a yearly income below $80,000, and individuals below $50,000 a year, would be eligible for the full amount; a sliding scale would be used to determine lower deductions for families or individuals with higher overall incomes.
Many observers are critical of the plan, however. A number of educators, as well as financial aid officers, claim that the program is skewed toward helping middle-class families. Here's how. Poor families often pay little income tax, and would thus gain little from a tax deduction (which would be subtracted from taxable income). A tax credit is a slightly better option for low income families because they could potentially receive a refund from the government. However, the Clinton plan currently proposes to subtract the tax credit from any grant money that a student may receive, effectively eliminating the tax credit for many of the neediest students.
Another component of the plan that has raised some questions concerns the administration or supervision of the program. For example, a student and his or her family can choose to use the tax break for the first two years of college, providing that he or she maintains at least a "B" average and "stays drug free". How these conditions will be monitored is still unclear.
Implications
If the Clinton plan fails to pass the Republican-led Congress, then the implications are relatively small. Possibly, the plan could be re-worked to address some of the concerns raised by educators about the potential impact on low-income students.
If the bill is enacted, the implications are obviously much greater. The program could serve to divert existing money and support for current programs, such as Pell Grants, that are more directly targeted toward low-income students and their families. These other programs may be viewed as less of a priority if the President's tax break/refund plan is enacted. The new regulations could also potentially serve to increase the opportunity of middle-class students to attend private colleges and universities. While an admirable goal, this result would still fail to address the needs of students who are not attending college due to financial reasons. The plan could also possibly result in an increase of paperwork and financial aid applications, factors that may deter some potentially-needy students.
Finally, as Burd (1997, A34) points out, enforcement of the "B" average and "drug free" standards could also involve government agencies, particularly the IRS, with educational records, many of which may be confidential under the provisions of the Buckley Amendment. This could raise a number of legal and ethical issues for colleges and universities, caught between protecting student rights and the demands of the federal government. Under the existing laws, students have to give written permission to the academic institution authorizing the release of academic information. It is likely that this issue will be the source of future litigation if the Clinton plan in enacted.
Source
Burd, Stephen (1997). President Pushes Tax Breaks to Help Families Afford College. The Chronicle of Higher Education, XLIII (19), p.A33-A34.