Title: BEYOND TAX RELIEF: LONG-TERM CHALLENGES IN FINANCING HIGHER EDUCATION
Abstract: The Administration has proposed an increase in Pell Grant spending and a new tax credit and deduction for college expenses, ambitious initiatives that are estimated to cost approximately $48 billion over the next five years. The primary weaknesses of the tax proposals are that they are not very well targeted and could be abused for leisure-oriented coursework. On the other hand, the potential for "tuition inflation" has probably been overstated by the plan's critics: the primary effect of the plan is to raise families' income and will do little to reduce the cost to families of future tuition increases. It is, perhaps, more problematic that the plan does little to resolve the deeper structural problems in how we pay for college—with a complex morass of financial aid programs and a financial aid formula that taxes income and savings at high rates. That financial aid system will be put under increasing strain in the coming years, as larger cohorts reach college age and seek to maintain the currently high rates of college going. The paper concludes by recommending greater reliance on income-contingent loan forgiveness as an alternative way to help families pay for college.
Publication Year: 1997
Publication Date: 1997-06-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 44
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