New Tax Bill Would Lower Tuition Costs

Congress will consider a new "Student Aid Bill" this February aimed primarily at middle income groups. The bill would allow parents to credit 30 percent of their dependents' college tuition expenses against income tax payments.

If passed, the bill would in effect reduce Harvard College tuition from $800 to $560, if the student receives no scholarship aid.

Lower income bracket students would not gain much directly, however, for they can claim the 30 percent credit only on the part of their tuition not covered by scholarship aid.

Parents in the $8,000-12,000 income group, whom the bill should free from the need for aid will be the main group directly helped. This would accordingly make more money available for aiding lower income brackets, which colleges emphasize now.

Tax exemptions would apply to all tax-free institutions of higher education, including colleges and graduate schools. It would not allow credit for room and board charges. The 30 percent deductions would apply up to a limit of $450 for each dependent.

Ten Bills Last Year

The American Council on Education is drafting the bill, but has not decided who will sponsor it in Congress. Ten bills for similar purposes were presented in the last session of Congress, but backers of the bill claim that the previous bills were too badly organized to succeed.

"This bill is aimed primarily at increasing the number of students who can afford to attend college, not helping these already there," a spokesman for the Council on Education said.

Would Lose $118,000,000

The government would lose an estimated $118 million under the proposal, but "this is a small price to pay for keeping higher education open to everybody," the Council argues. The bill will actually pay for itself eventually, the Council claims, for it will increase the earning power of those who would not otherwise attend college.

Not a now plan, this is the first time a percentage exemption has received such well organized support. Backers argue that the combination of inflation and low interest rates have reduced the amount which endowments contribute to educational costs, while high income taxes have made it more difficult to meet heavy expenses.