Educators Welcome President’s Tax Plan but Fear GOP Cutbacks

College and university officials, who fiercely compete for the brightest students and financial support, are cautiously optimistic of President Clinton’s tax proposals on financial aid.

But they cast a wary eye toward amendments to the Republicans’ “contract with America,” which they fear would cut financial aid and put a higher education out of reach for many.

“We are strongly in favor of the President’s call for a tuition tax credit,” said James Rowe, director of public relations at Harvard University. “We hope that that will not affect in any way all the other financial aid programs.”

Clinton, as part of his “Middle-Class Bill of Rights,” has proposed tax deductions of up to $10,000 on tuition expenses for families earning $100,000 or less. For a family in the 28% tax bracket, those deductions could save them as much as $2,800 a year, tax officials said.

Robert Atwell, president of the American Council on Education, which represents about 1,900 independent and publicly funded schools, said Clinton’s proposal “deserves strong consideration” but needs reviewing to see how it would aid low-income as well as middle-income students.

“This is especially welcome in light of other proposals now being considered that would reduce federal support for college students and erect greater barriers to access and affordability,” Atwell said.

The incoming chairman of the House Budget Committee in the next Congress, Rep. John Kasich of Ohio, has proposed cutting back financial aid to save $9.6 billion over a five-year period to help pay for the “contract with America.” School officials said the proposal would end the interest-free grace period for student loans from six months after graduation and add more than 20% to the cost of the loan.

“It’s been a major incentive to allow middle- and low-middle income families to send their sons and daughters to college,” said David Warren, president of the National Assn. of Independent Colleges and Universities (NAICU), which represents 850 institutions.

“We plan to oppose it strenuously,” Warren said.

Escalating tuition rates are putting strains on pocketbooks, but statistics show education pays off.

Tuition at four-year independent colleges and universities has risen about 6% a year for the past four years to average $9,995, according to NAICU. The tuition rate at publicly funded schools, which receive a taxpayer subsidy of $6,000 per student on average, is $2,576, the NAICU said.

Secretary of Labor Robert Reich said earlier this year that the unemployment rate among college-educated Americans stood at 3% last year compared to 12% among those without a high school diploma. The wage gap between the two groups also grew last year, continuing a 20-year trend.

Rising expenses have forced schools to walk a balancing act between cutting back nonessential costs and raising rates, all the while appealing for financial benefits and keeping education affordable.

“There are a lot of schools out there biting the bullet,” NAICU spokesman Tim McDonough said. “Some of the schools are closing. You’ll find that more schools are restructuring than closing.”

Harvard University announced in May a $2.1-billion fund-raising campaign over the next five years, the most ambitious ever attempted in the United States.

Harvard President Neil Rudenstine drove himself to exhaustion and was forced to take a leave of absence in November, partly due to the fund-raising efforts.

Other schools have taken innovative steps to cut costs.

St. John Fisher College in Rochester, N.Y., has adopted the “Fisher Commitment.” Students who complete a four-year degree and a number of conditions--including a minimum 2.75 grade-point average--are guaranteed a suitable job when they graduate or St. John Fisher will pay them $417 a month for up to 12 months or $5,000.

Cooper Union for the Advancement of Arts and Science in New York is one of only a handful of “work colleges,” where students work in exchange for free tuition.