Cap in hand and gown flowing, President William Jefferson Clinton made his bid to be the “education President” when he spoke recently at Princeton University. He offered a $1500 refundable tuition tax credit for students and their parents, and predicted that such a credit would make community college attendance essentially free.
What he didn’t say was that the tax credit would cost about $25 billion in the next seven years, though the president did say that he could pay for the cost by reinstating a tax on international flights and imposing another set of new taxes.
Because issues of educational access are so important, this proposed tax credit merits attention. To be sure, it will help poor young people who don’t have the wherewithal to attend a school like Princeton or Yale. But one has to wonder, as one always does when tax incentives are offered to modify behavior, if the tax will stimulate enrollment or if it will do less than is intended.
Good Intentions Not Enough
Let’s talk first about the mechanics of a college tuition tax credit. How will students claim it? They’ll have to get a credit against the taxes that they owe. If they owe less than $1500, they’ll get a refund from the government. Sounds good, right?
It sounds good for the parent who sends her daughter to Princeton, whose $5000 tax obligation is reduced by a tuition credit. But what about the parent who has to scramble to make a tuition payment at a community college, or the adult student who, between making ends meet, cannot find the extra dollars to enroll for classes, Despite President Clinton’s good intentions in using a tax credit to provide tuition relief, good Intentions may not be good enough for those who struggle with day-to-day survival issues.
If this tax credit is designed to help students on the bottom, then community college tuition should be free, The $25 billion that is spent reimbursing people for tuition might better be used to make sure that community colleges are open to everyone who needs them.
All it takes is a walk through community college halls to understand what I mean. The last time I visited a community college, I ran into a 50-year-old
I talked to a young Black man who was undertaking a vocational certificate In printing, and living with relatives until he could find employment, I spent time with a Latina whose courses in English as a second language had lit her learning fire and moved her to pursue political science studies.
None of these folks had the disposable income to pay for the classes they wanted to take, and their dreams were held together by a combination of financial aid and community a port. Few of these folks would see their plight enhanced by a college tuition tax credit. Good intentions sometimes aren’t good enough.
Just Say `Free’
And there are other issues, Some economists note that the money spent on this tax credit will have to come from someplace else in this deficit-conscious economy. Indeed, some Clinton advisors argued against the tuition tax credit, suggesting that this could lead to some kind of bidding war on targeted tax cuts for some populations.
The travel industry, which may shoulder the burden for this cut, has already called it “unfair.” is there a connection between international travel (the tax on which would rise from $6 to $16 a ticket) and higher education? What about the sale of radio and television franchises? What do we give to get?p The human capital equation suggests that education is one of the few ways that African Americans can improve on the card we are dealt. Educated Black folks simply earn more than uneducated Black folks do (though less than educated whites), so that any initiative that stimulates Black enrollment and encourages Black education bears examination.
But it is not clear that a tax credit is the way to encourage the college enrollment of those whose struggles with disposable income are so significant that they don’t have enrollment fees. If, as the president notes, a community college credential today is what high school used to be, then community college tuition ought to be free. Not credited. Not rebated. Not deducted. Just free.
Otherwise, this new Clinton initiative might stimulate posturing, but not enrollment. Otherwise, those who ought to benefit will find themselves, again, out in the cold.
COPYRIGHT 1996 Cox, Matthews & Associates
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