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Student aid plans face tough road ahead

President Bill Clinton’s new two-part approach to higher education investment–a Pell Grant increase coupled with more extensive tax credits–is drawing a mixed: response among both education advocates and Republicans in Congress.


 Educators generally endorse the Pell Grant increase, which would raise the maximum grant by $300 to $3,000 next year. However, some favor an even higher figure, particularly given the economic tilt of the Clinton plan. The $300 Pell crease, aimed at lower-income students, would cost about $15 billion. The tax credits, which may benefit higher-income earners, has a price tag of $35 billion.


 â€ś[The tax proposals] create a real dilemma for the higher education community,” said Arnold Mitchem, executive director of the National Council of Educational Opportunity Associations.


 The dilemma, according to Mitchem, is that college presidents “can’t go to parents” and criticize the tax plan–which costs more than the annual discretionary budget of the U.S. Education Department. It is his opinion that Congress could use the same $35 billion to raise the maximum Pell Grant to $5,000 a year, nearly double its current rate. Sen. Paul Wellstone (domino.) just introduced a bill (S. 212) to advance such a goal.


 â€śWhile Pell itself has been unable to actually reduce college tuitions, it is frightening to imagine how expensive colleges would be without the Pell program–and how few lower-income families would be able to obtain diplomas,” Wellstone said as he introduced the bill.


 A much higher Pell Grant would open the door to college for more low-income students, according to Wellstone, Mitchem and others. Tax credits, they say, mainly would help middle- and upper-income families whose children already plan to attend college.


 â€śAny investment in education is good for the country,” Mitchem said. “[However,] both tax plans are irrelevant for a low-income student.” The tax credit plan that divides-educators actually consists of two elements–a $1,S00-a-year HOPE Scholarship to students who maintain at Least a “B” average, and a tax deduction of up to $10,000 to offset the cost of tuition. A family could choose between the scholarship or the credit, which would begin to phase out as the family’s income reaches $75,000 annually.


 Students could receive HOPE Scholarships for up to two years–part of the president’s goal to make a community college education affordable and accessible to all Americans. Both proposals are part of Clinton’s 1998 education budget plan released Feb. 6.


 Republicans in Congress are raising budgetary and other concerns about the tax package. They argue the plan could prove burdensome to teachers, colleges and the federal government–particularly the requirement that students receive aid only if they maintain a B average. “How will the federal government know if a student has a B average? Will the Internal Revenue Service collect students’ report cards in the same manner in which they obtain written reports to verify other tax data?” asked Rep. Bill Archer (A-Texas), chairman of the powerful House Ways and Means Committee.


 Most colleges also operate on a semester system, which would make it tough to assess grade data by calendar year.


 â€śIf a student has a C+ average in the fall of 1996 and a B+ average in the spring of 1997, will he or she qualify for the credit?” queried Archer, who also questioned whether the plan would “contribute to educational inflation and drive up the cost of college.”


 In the Senate, Republican leaders are supporting an entirely different education package–again centered on tax breaks. Their plan includes tax-deductible contributions of up to $1,000 a year into education investment accounts and deductions of up to $2,500 a year for interest payments on student loans. “Tax cuts are fashionable,” said Mitchem, noting that both Clinton and Republican presidential nominee Robert Dole emphasized tax cuts in the last election. “We’re in a climate where people feel they need tax cuts.”


 How the Pell Grant fares in this environment is what concerns many educators. In 1996, Congress increased the maximum grant by $230 to $2,700, one of the largest one-year increases ever. Many cited election-year politics as a factor, and it is unclear whether lawmakers would vote for another large increase for the I second year in a row.


 According to Wellstone, college tuition has increased more than 40 percent since 1985, while Poll Grants have grown at a much smaller rate. The value of Pell Grants also has declined 30 percent in real dollars since 1980, which has affected access by poor students to college.


 In 1979, affluent students were only four times as likely as low-income students to earn a college degree by the age of twenty-four. By 1994, affluent students were ten times more likely than poor students to have such a degree, Wellstone said.


 Witnesses made some of these points at regional hearings the Department of Education conducted last fall in preparation for Higher Education Act reauthorization. Pressure from higher education groups also helped persuade Clinton to favor a $300 increase in the maximum Pell Grant next year, advocates said. The president’s plan would increase the number of grants by expanding eligibility to students above the age of twenty-three. Both the Pell and tax plans now go to Congress for further review.


 Both the Pell and tax plans now go to Congress for further review. Justice Department Proposition 209 Brief The U.S. Department of Justice formally joined the legal debate over the controversial California Civil Rights Initiative, commonly known as Proposition 209, by filing a brief in federal court that opposes the measure which would eliminate race, ethnic and gender preferences in higher education admissions, employment, and state and local government contracting.


 The friend-of-the-court brief was filed with the U.S. Appeals Court, Ninth Circuit, in San Francisco. In December, a U.S. District Court judge issued a preliminary injunction barring implementation of Proposition 209 until the judiciary can assess whether the plan is unconstitutional.


 â€śEven before Proposition 209, both race- and gender-conscious state affirmative action programs were required to satisfy rigorous constitutional scrutiny,” said the brief, noting that programs must respond to historic or on-going exclusion from programs.


 States are free to decide the fate of state affirmative action programs, the justice department said, but Proposition 209 “does: more than simply repeal its existing affirmative action programs…. It also effectively limits the access of minorities and women–the primary beneficiaries of affirmative action–to the levers of government.”


 The proposal also violates the equal protection clause of the 14th Amendment by creating obstacles for minorities and women who want to overcome discrimination, the brief stated.


 By filing a friend-of-the-court brief, the Justice Department formally outlined the Clinton administration’s opposition to the ballot initiative. However, the department’s action does not make it an actual party in the upcoming court case.


 COPYRIGHT 1997 Cox, Matthews & Associates
COPYRIGHT 2004 Gale Group

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