Tax break fuels fear of fee hike

March 21, 1997

Critics of President Bill Clinton's proposal to boost student aid say that it could fuel tuition fee inflation in the United States.

University and college lobbyists in Washington have generally welcomed the plan for a $35 billion expansion in student support. More help for students, after all, promises more spending on higher education.

But as the Republican-controlled Congress examines the proposals, which include tax deductions for parents and the so-called "hope scholarships", the potentially embarrassing issue of college costs has come to the fore.

Both Republicans and Democrats are concerned that the cost of education is "unreasonably high", say aides. "By providing larger amounts of student aid, without limiting college costs, we risk being ripped off," said Democrat congressman David Obey.

Conservatives want to reshape tax breaks to encourage parents to save money on education rather than spend to the limit, in the hope that this will bring down prices.

But education lobbyists fear that colleges could face cost controls on federal government money, as happened to hospitals, another set of non-profit institutions thought to be charging too much.

Higher education bills have risen at more than twice the rate of inflation in the past 15 years, while family incomes have remained stagnant.

This month it was Time magazine's turn to follow a path trodden by many major US newspapers and chronicle the price rises. "Why Colleges Cost Too Much," was the headline on its cover story.

Tuition and fees, room and board, books and supplies, health insurance and expenses can all push the annual cost of attending an elite private college to $30,000. Even at publicly subsidised state universities, the cost can reach to $10,000. The $114 billion student debt recorded in 1990 is predicted to reach four times that in 2000.

Education lobbyists in Washington, are alarmed that the Clinton administration is considering "incentives" to colleges to hold down fees, after experts warned that tax breaks would be seen as an opportunity to raise fees by both private and state universities.

Meanwhile John Kasich, the Republican chairman of the House Budget Committee, clashed with the American Council on Education, the umbrella lobbying organisation for colleges and universities, over hearings on college costs.

Mr Kasich postponed a committee meeting after he accused the ACE of discouraging a reporter from testifying. He promised the hearing would be rescheduled, to "get to the bottom of what we can do to help improve the situation in higher education", even though "we have people in these institutions who don't want to search for the truth".

The journalist in question, Karen Heller, had worked on a Philadelphia Inquirer series called "Higher Education: How High the Price?", which concluded that the size of administrative staffs played a large role in the rise of tuition fees.

President Clinton, who made education a campaign issue, has found his proposals are in trouble for other reasons. One plan is to insist that students maintain a B average on their grades in order to qualify for tax credits through two years of college. Experts say this could encourage students to take easy courses, and they question why C+ students are not deserving of the extra help.

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