make possible massive increases in tuition in New York-increases which, Hollander says, would otherwise not have been "politically feasible." More than 50,000 students-many of them poor and minority-have had to leave the City University of New York since tuition was imposed. Student aid alone has not been enough to meet their needs. 3. We believe that a tax credit program may well be justified to give assistance to working-class and middle-class taxpayers who receive little or no help from student aid programs. If Congress passes such a law, we believe it should include the following components, most of what are not part of S. 311 and/or S. 2142. a. Living expenses as well as tuition, books, and fees should be included in the education expenses to which the credit applies, as proposed in H.R. 127 of 1977, filed by Rep. Jerome A. Ambro of New York.-The reason is that living expenses are just as essential for students as tuition and fees, if a student of lower-income or middle-income is to attend college. This is fully recognized in all federal student aid programs, all of which include funds for living costs as well as tuition, up to a maximum. b. A tax credit plan should not pay a graduated benefit based on tuition alone, as in S. 2142, which pays half of tuition (alone) up to a maximum of $500.This discriminates against the almost 80 percent of all students attending public colleges and community colleges where tuition is less than $1,000, but all of whom also have living costs to meet to attend college. It also penalizes the taxpayers in the great majority of states which have kept public college tuition below $1,000, by not recognizing the effort they have made to provide educational opportunities for their students. Otherwise these taxpayers are paying twiceto support opportunity to their own states, and to pay for higher costs in other states. The problem of graduated benefits can be resolved simply by including living costs as well as tuition up to a reasonable maximum like the proposed $500. This would mean that the 80 percent of students at public colleges would receive help as well as the 20 percent at higher-tuition private colleges. The latter group would not be penalized in any way. c. Graduate and professional students as well as undergraduate students would be included.-Many of these students face especially difficult economic problems. They are more likely to be self-supporting and living on limited means than many undergraduates. d. Part-time students—at least those enrolled one-half or three quarters timeshould be included, with a pro-rated benefit.-These students are often older people working at low salaries and trying to manage college on a less than fulltime basis. Many are older women and men seeking new skills or better jobs, but with major family and other financial commitments. They too need the tax credit. e. It would probably be better not to deduct federal, state, and non-governmental student aid or the G.I. Bill from a proposed credit, as in S. 311.-This would lead to tremendous bureaucracy and paperwork in an attempt to determine for every individual and institution what forms of aid he or she might be receiving (including the reduced or discounted tuition often offered at private colleges). Both IRS and the colleges would be tied up in endless problems. Since most such students are poor, receiving needs-based aid, most of them need the proposed credit as well as the aid they now get. f. As far as possible, colleges, boards, and states in both the private and public sectors should be discouraged from raising tuition or other charges to "capture" the tax credit.—AASCU is working separately on proposals to help achieve this purpose. 4. The last point requires some amplification. AASCU has been very concerned that present student aid programs can lead to tuition and fee increases at both public and private colleges, as well as profit-making institutions. To the extent that this happens with either student aid or tax credits, it can have the following undesirable consequences: Rising tuition will simply take away the aid provided to students and taxpayers, who will be no better off than before. Lower-income students will be in need of much more aid, or will have to drop out of college. Middle-class and working-class students who did not previously need aid will now require it, or be in great trouble. Federal money will simply be substituted for state or private money. Some states and colleges will spend less and let the federal government spend more. Those who charge the most will get the most federal aid, and those who try to hold the line and help their students will be penalized. In general, AASCU believes that some way is needed to discourage rising student charges, whether Congress chooses to increase student aid or to add a tax credit program. We hope that as Congress considers both tax credit and student aid proposals in 1978, all of these ideas will be given consideration. We will be happy to work with you in any way we can. We are submitting along with our testimony two AASCU publications which may be helpful to you-The Low Tuition Fact Book, and The Public College Fact Book. These help to document some of the concerns we have expressed in this statement. Enclosures (2). ADDENDUM 1. Needs analysis systems and tax credits.-We believe Congress should be very concerned about the fact that the various "needs analysis" systems used to determine the amounts of federal student aid awards are based in part on the income received by the family. If a family or individual receives an additional $250 as a result of a tax credit law, for many families almost half of this $250 could be deducted from student aid they would otherwise receive. This is particularly true for families in the approximately $9,000-$18,000 category, most working-class and middle-class families, according to needs analysis specialists. It may be possible to design legislation to take care of this very serious problem. 2. Discouraging tuition increases.—It may be possible to devise a legislative "carrot" to discourage tuition increases. This could be done, for example, by funding the "cost of education" program, part of the Higher Education Act, to discourage public and private colleges from raising tuition, or by creating a new program. Possibly a bonus could be given to institutions which do not raise tuition or fees at all in a given year or at least by no more than the Higher Education Price Index. This would reward the states and colleges which have made a special effort to keep tuition and fees low. One of the best investments the American people ever made was to establish public There are more than 1500 public institutions in the U.S. Together they provide a diversity American Association of State Colleges and Universities |