College Savings Proposals

* Your July 7 editorial was right on the mark in saying that “simplicity, clarity and fairness” should be paramount concerns for congressional negotiators who craft a final version of the college-related tax breaks now pending. I want to raise one issue that you missed and clarify two others that you raised.

A crucial distinction between President Clinton’s tax plan and those offered by the congressional majority is that Clinton’s plan offers benefits to students of all ages for their junior and senior years and for graduate school. This provision acknowledges the need to support students 24 years of age and older, who now compose half of the nation’s collegiate student body. If a parent were the student, the family could receive the same credit. This is the essence of lifelong learning--an incentive to encourage Americans of all ages to upgrade their education and job skills throughout their career, finish their undergraduate degree, or return to school for an advanced degree. The Senate version includes no such provision. The House plan includes a tax deduction only for interest accrued in a prepaid tuition savings account.

Under the terms of the president’s plan, you asked, “What is a ‘college course’?” The tax breaks would be subject to the same rules that govern Pell grants, student loans and other forms of federal student financial aid, which can be used in a degree- or certificate-granting program at a college or technical school. Thus, “Would a weekend cooking school be included?”--the answer is no.

After consulting with Congress and higher education leaders, the administration eliminated the requirement that a student maintain a B average to receive the Hope credit for a second year. The rule that applies to other forms of student aid would be in effect--a student must maintain “satisfactory progress” toward completion of the degree or certificate as determined by the institution.

RICHARD W. RILEY

Secretary, Dept. of Education

Washington