Democrats Propose New Student Aid Plan

Seeking to jump-start congressional discussions on higher education, a coalition of Democrats is proposing an ambitious new higher education plan that could include more than $150 billion in new funds over the next 10 years.

Called Saving the American Dream, the plan would provide states with incentive funds based on the number of students who enroll in and eventually graduate from college. States could receive $150 billion under this program, based on two and four-year college enrollment, as well as the number of graduates. In exchange, states would agree to maintain spending on higher education and hold tuition to the overall inflation rate.

The incentive grant would translate into extra funding of about $2,000 per college student, sponsors say.

The plan also would simplify the growing maze of federal tax incentives into one program. In the new approach, all families that put students through college, graduate school or job training could receive a $3,000 college-tuition tax credit.

The credit would cover up to four years of postsecondary education, and families too poor to owe federal taxes would receive the same aid through a refund. The credit would replace the current HOPE Scholarship and lifelong learning tax credit.

“America needs a bold new plan to produce 1 million more college and community college graduates a year by 2015,” states the Democratic plan, proposed by a group of leaders that includes Sen. Hillary Clinton, D-N.Y., Sen. Tom Carper, D-Del., and Gov. Tom Vilsack, D-Iowa.

 

“To make college as universal as high school, college aid needs to be simpler and more generous,” the plan says.

Clinton says the plan would address many of the concerns she has heard from students for several years. “I have heard too many students say they are overly burdened with the cost of tuition. This plan offers a comprehensive strategy on how to lessen that burden and takes the important step towards making the American Dream attainable for the next generation,” she says.

Another provision of the plan would make the Pell Grant available year round, a priority for some non-traditional college students. It also would expand financial aid offerings to students who attend college part time.

To pay for the initiative, the sponsors would create an independent federal commission to recommend elimination of $200 billion in wasteful spending.

— Charles Dervarics

 

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