Clinton begs college chiefs to back tax perk

February 10, 1995

Twenty-seven university presidents breakfasted at the White House last week as President Clinton made a determined effort to win support from higher education for his proposed tax deduction for college tuition in the United States.

The president's plan is his answer to Republican cries for tax cuts. It would allow families earning up to $120,000 a year to deduct from their taxes up to $10,000 a year for college expenses. But it is running into criticism in some quarters, and the Washington Post has called it a "bad idea".

The tax plan was "sloppily and hastily conceived for political purposes", said a recent editorial in The Post. The government could not afford to give up the money in tax revenue, the newspaper added. "The main effect would likely be to free up the colleges to raise their fees even higher, since it would be the government paying."

In a direct response to such criticism, Mr Clinton called on the university presidents not to allow costs to go up as a result of tax cuts. "We cannot let this happen," he said. "We've got to send a signal to America that . . . we will use this opportunity to put more people in our institutions and give more people opportunity."

The tax cut attempts to encourage something the American economy needs: a better-educated workforce. But it is a blunt instrument and would give twice as much in savings to a family earning $100,000 a year as to one earning $30,000. The lion's share of the tax cut would go to relatively well-off families who would pay the tuition fees demanded whether the president intervened or not.

But some experts think the plan would do some good. Harvard professor Thomas Kane believes that the tax deduction would boost student numbers and improve opportunities for some Americans.

For higher education, the big battle is over Republican proposals to cut student aid. Republicans in Congress want to end the interest exemption on loans while students are in college, eliminate three campus-based aid programmes and do away with the State Student Incentive Grant programme. Axeing these programmes would cost students and their families about $20 billion.

A campaign has been established, Alliance to Save Student Aid, to fight these cuts.

Dave Merkowitz, of the American Council on Education, the umbrella group for higher education, said his organisation had taken no position on the president's tax deduction plan.

"We have said it certainly deserves consideration," he explained.

ACE and other higher education groups are waiting to see what stand President Clinton takes on the Republicans' plans for student aid cuts before committing themselves.

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