Newspaper article The Christian Science Monitor

How Clinton Tuition Tax Cut May Affect Family Pocketbook

Newspaper article The Christian Science Monitor

How Clinton Tuition Tax Cut May Affect Family Pocketbook

Article excerpt

PRESIDENT Clinton's proposal to allow a tax deduction for college-tuition payments has struck a positive bipartisan chord with politicians and education professionals - as well as families with college-bound children who face platinum-priced tuition fees.

"He would be helping middle-class families in a way we have not seen before," says Michael Maxey, a vice president at Roanoke College in Salem, Va.

The president's plan would allow a family earning less than $120,000 a year to deduct annually up to $10,000 of tuition costs for a variety of post-secondary schools: two- and four-year colleges, vocational schools, graduate schools, and worker retraining. For a family in the top tax bracket taking the full deduction, that would mean a savings of $3,000 a year.

But some economists are raising questions about the real impact of the plan and whether it's the most effective way to target the people who need the most help. For example, someone who does not earn enough to pay taxes would not be helped at all.

"This could be an open invitation to the universities to raise their tuitions," effectively wiping out the savings of the tax break, says William Dickens, an economist at the Brookings Institution here in Washington. "It would be a big matching grant on the part of the federal government, so I wouldn't be surprised if this happened."

Though tuitions have soared in the last 15 years, colleges and universities say they are still hard-pressed to cover their costs. They must pay top dollar to attract talented teachers. Some face severe maintenance needs. Advances in technology require constant updating. At state universities, competition for public dollars grows increasingly fierce.

Mr. Maxey of Roanoke College, a private institution, acknowledges that larger-than-usual tuition hikes could result, but he doubts that would happen. "Not in the current environment. We've been going up too fast for too long and there would be a tremendous public outcry," he says.

Tuition, room, and board at Roanoke is now $17,850. The most expensive private institutions in the country run at well over $20,000 a year. …

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