Based on a story in the Ann Arbor News, December 11, 1996


This story discusses a proposed subsidy toward college tuition at colleges and universities. This tax break would take two forms:

According to this story:

"President Clinton's proposed tax breaks to help the middle class pay college tuition may result in little savings to families but a windfall to schools.

The story maintains that "Critics fear that universities will simply use this as an excuse to raise tuition - an assertion hotly disputed by University of Michigan provost J. Bernard Machen.

Wayne E. Becraft, director of the American Association of College Registrars and Admissions Officers is quotes as saying: "Tuitions are going up fast already, but I expect them to go up even faster (if the proposals are enacted)... But colleges won't just increase tuition for the heck of it. Schools will have to adjust staff and facilities to meet the volumes that are expected from an influx of new students." According to the story Provost Machen at the University of Michigan said that "except for inflation, tuition at the University of Michigan is about as high as it can possibly be," and therefore the proposed tuition subsidies would only benefit the students and not the university itself.

The story suggests that tuition is most likely to rise at community colleges, where Clinton's tax credit is $300 larger than the average tuition. As a result, the two-year schools are expected to raise tuition to match the full amount of the tax credit.

A White House spokesman, Barry Toiv, is reported as saying, "But we hope that colleges will be responsible and not make this a problem or an incentive to raise tuition."

Robert McGee, a taxation and public policy professor at Seton Hall University, said the tax breaks would lessen the pressures on these schools to keep costs down. The story reports that according to Mr. McGee, "In the past, when the government has helped with higher education expenses, colleges have raised tuition. >From 1944 to 1947 the college population doubled and tuition increased sharply when the government paid tuition for nearly 2 million officers in the GI bill."

"That not only benefited the students, but more the schools," said Judy Bellafaire, a historian with the U.S. Army. "Schools began to say, `Hey, if the government is going to pay for this, we're going to up tuition to the maximum'. Colleges knew they had a good thing going."

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