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College Groups Give Clinton Plan Tentative Backing

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Washington

Higher education groups last week cautiously endorsed President Clintons college proposals, but they are waiting for final details before they offer wholehearted support.

The American Council on Education, an umbrella group representing colleges, universities, and various national and regional associations, said it "strongly supports the elements" of Mr. Clinton's plan "to further open the doors of higher education."

But college leaders hinted that some still-to-be-announced pieces of the plan could turn them against parts of Mr. Clinton's agenda.

College and university officials want to make sure that Mr. Clinton's proposals don't favor middle-income students over low-income students, the traditional beneficiaries of federal college assistance.

"When you look at the program as a whole ... we think it is a very strong package," Stanley O. Ikenberry, the ACE's president, said during the group's annual meeting here last week.

But Mr. Ikenberry and others noted that details hidden within Mr. Clinton's package of tax incentives or other changes in federal student-aid programs could endanger the group's support for the package.

"We're entering a period where a lot of negotiating is going on," said David Pierce, the president of the American Association of Community Colleges, an ACE member that last week wrote Mr. Clinton on its own to announce its support for the president's plans. "People are reluctant to offer a blanket endorsement."

Mr. Clinton's plan aims to increase access to college through federal income-tax credits and deductions for college costs, increases in Pell Grants for needy students, and IRA-style savings plans. ("Clinton Asks $10 Billion Boost for Education," Feb. 12, 1997.)

Fearing the IRS

The biggest roadblock appears to be Mr. Clinton's desire to require students to maintain a B average to retain eligibility for a $1,500 tuition tax credit in the sophomore year.

College officials fear that the Internal Revenue Service would demand paperwork documenting a student's grade-point average.

"The IRS will not interfere with the affairs of educational institutions," Mr. Clinton told the group. "We are committed to making this simple and straightforward for the academic community and especially for the students."

Mr. Clinton's aides say the president won't back down on the B-average requirement.

"There are a number of insurance underwriters in this country that provide lower-cost auto insurance to students that maintain B averages," Michael McCurry, the White House press secretary, said. "Colleges and universities are familiar with those programs and administer them with some ease."

While college officials are pleased Mr. Clinton is proposing the tax credit and a separate $10,000 tax deduction for higher education costs, they said they would not be so enthusiastic if the increases in the Pell Grant program did not accompany them.

"A fairly massive effort to raise the Pell Grant is critical to us," said Barry Munitz, the chairman of the ACE board of directors and president of the California State University system. "The combination ... represents a major force for access and opportunity."

Mr. Clinton is proposing to raise the maximum grant by $300--to $3,000--for the 1998-99 academic year and expand eligibility for Pell Grants to include 348,000 financially independent students who are now shut out.

School officials, however, worry that Congress may favor the tax changes over the Pell Grant boost. Most higher education officials would prefer to emphasize aid to needy students, as the grants do, over the tax incentives' targeting middle-income students.

Using current budget procedures, Congress this year would set the maximum Pell Grant award for 1998-99 and revisit it annually in the future. The money comes out of a pool of discretionary funds that has not kept pace with inflation in recent years. Mr. Clinton's plan is to raise total Pell Grant spending from $5.9 billion this year to $7.6 billion next year.

But if Congress adopts Mr. Clinton's tax proposals, every eligible person could take advantage of them, so the pool of those funds would be unlimited. Mr. Clinton's budget estimates that the tax breaks for tuition would cost $36 billion over five years. What's more, Congress does not rewrite tax policies on an annual basis, meaning the incentives probably would be locked in place for several years.

"We're afraid the whole structure makes the assistance for lower-income families more vulnerable" to cuts in the future, said Nancy Cole, the president of the Educational Testing Service, the nonprofit Princeton, N.J., organization that operates the SAT college-entrance exam.

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Web Resources
  • See the American Council on Education in our Organizations listing.
  • Read the American Council on Education's analysis of President Clinton's college proposals, from their Web page.
  • Read an opinion about the Clinton tax credit, by Chester Finn, from the Educational Excellence Network Web page.
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