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Washington Watch: Uncle Sam Says, "Stay in School!"
By Ruth Flower
The president's higher education initiatives for fiscal 2001 place a strong emphasis on college completion. Some of his proposals focus specifically on the challenge of staying in school to complete a bachelor's degree. Several proposed tax cuts and grants would be available to students at any stage of their academic careers, including adults returning for additional education or training. These higher education initiatives, outlined below, are a small part of the $1.83 trillion budget that the president formally submitted to Congress on February 7.
College Opportunity Tax Cut The College Opportunity Tax Cut would offer an annual tax deduction or a 28 percent tax credit for $10,000 of a family's college expenses. The tax credit would be phased in over three years, beginning at $5,000 in 2001 and 2002.
The HOPE Scholarship Tax Credit (which Congress approved in 1997) would continue to be available for students in their first two years of college; it offers a tax credit up to $1,500. The new tax credit would be available to cover all types of study and continued job training for all family members. A family could claim both the HOPE Scholarship and the College Opportunity Tax Credits--but not for the same student.
For example, consider a family of four with two children in college and one parent taking a computer programming course. Assuming that tuition and fees for the two students come to $6,000 each and the computer programming course costs $2,000, the family would qualify for $3,740 in education tax credits for the household for one year, once the tax cut is fully implemented.
None of the current or proposed tax credits is refundable, however, so some low-income families will not make enough money to be able to take full advantage of the credit.
College Completion Challenge Grants Noting that 37 percent of all students who enroll in college drop out before they receive a certificate or degree, the president proposes a new collection of programs to shore up students' ability to complete college. The new programs would offer increased grant aid and support services and additional programs for students in the summer before their first year of college. The new services would be coordinated within the TRIO programs (actually more than three), which are focused on preparing disadvantaged stude nts for college.
Partner Institutions
The president also proposed a new partnership program involving four-year institutions serving minorities and research institutions. Students enrolled in minority-serving institutions could opt for a five-year dual-degree program in which they would receive one degree from the minority-serving institution and another degree from a partner research institution in a field in which minorities are underrepresented. Federal funds would help bridge the tuition gap between the two institutions and would also assist the partner institutions in planning and implementing the programs.
Increased Funding for Grants
Heeding the advice of higher education associations, the president has proposed additional funding for grant and support programs--Pell Grants, SEOG, TRIO--to help students stay in school. (SEOG is the Federal Su pplemental Educational Opportunity Grant program, a "campus-based" aid program.)
The president has proposed increasing the maximum Pell Grant (the amount available to students with almost no family resources) by $200 a year. While this increase would go beyond what is needed to keep up with inflation, it would take only a modest step toward restoring the grant to its original design (i.e., sufficient to fund 70 percent of the average cost of a year at a four-year public college).
Budget season is well under way in Washington. We look forward to the further development of these proposals.
Ruth Flower is director of AAUP government relations.
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