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Settlement Is Reached In La. Desegregation Case

A federal judge has approved a new settlement in the U.S. Justice Department's 20-year-old desegregation lawsuit against Louisiana's higher-education system.

Under the $57 million settlement, which supersedes a 1981 agreement, the state will create graduate programs at predominantly black colleges in fields without comparable programs at other universities.

At the same time, some duplicate programs will be cut, and quotas established in the 1981 plan will be eliminated.

Money will also be allocated for scholarships to attract black students to predominantly white schools and white students to predominantly black schools.

In addition, the state will establish a community college in Baton Rouge that will be administered jointly by Southern University, a largely black school, and Louisiana State, a largely white school.

To insure the terms of the agreement are met, U.S. District Judge Charles Schwartz Jr. will appoint a three-member panel of experts agreed upon by both parties.

Tuition and Taxes: Michigan's program to permit parents to prepay their children's college tuition does not have to pay federal income taxes on its investment earnings, a federal appeals court ruled this month.

In a 2-to-1 decision, the U.S. Court of Appeals for the Sixth Circuit in Cincinnati ruled that the trust fund established under the program, the Michigan Education Trust, was a state agency and did not have to pay such taxes.

Lawyers for the Internal Revenue Service, which filed the lawsuit, had argued that federal law gave no tax exemption to such funds.

The I.R.S. was reportedly considering appealing the case to the U.S. Supreme Court.

Michigan will collect a one-time lump-sum repayment of some $50 million that it has paid in taxes since the program began in 1987, a state official said.

Fee Waivers Upheld: Utah schools will have to waive various student fees for poor children under a court ruling issued last month by a state district judge.

The decision makes permanent a 1992 injunction that required the state board of education to deny funding to schools that did not comply with various fee-waiver laws.

Under the laws, children eligible for waivers of textbook and other learning-related fees include: participants in the federal subsidized-lunch program; students from families receiving federal poverty aid; and those whom districts determine suffer financial hardship.

Such children would still have to pay for yearbooks, school rings, and other non-classroom items, a state official said.

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