G.I. Bill May Be Too Costly

Bill Clinton's campaign promise of a "Domestic G.I. Bill" is facing the tough tests of reality.

The promise, as described in the Democratic party platform, is this: "A Domestic G.I. Bill will enable all Americans to borrow money for college, so long as they are willing to pay it back as a percentage of their income over time or through national service addressing unmet community needs."

The promise was a popular applause line in campaign speeches and a key talking point for Democrats, who predicted young people would turn out in record numbers for Clinton.

But now that the election is over and Clinton is preparing to govern, the promised national service initiative is shrinking amidst concerns about the program's cost and feasibility.

"The idea is so simple and exciting, but the devil is in the details, said James Harmon '93-'94, president of the College Democrats of America. "It is so complex and conceivably so expensive."

Transition officials said some sort of national public service program will likely be enacted. But they also said they doubt the program, at least at the beginning, will be open to "all Americans."

William Galston, coordinator of National Service Programs for the Clinton Transition, said in an interview this week that many issues related to the initiative--including the size of the program, how fast it will grow, and who will be eligible to participate--are still "unresolved."

Galston, a professor at the University of Maryland and former issues director for the Mondale and Gore presidential campaigns, did say that, at least at the beginning, the service-for-college-money trade will not be universally available.

Harvard officials agreed: "[Clinton] is not going to be able to provide a national service opportunity to all students," said Harvard Vice President for Government, Community and Public Affairs John H. Shattuck. "Reality is setting in."

Money is one major obstacle. The size of the program will depend on how much money Clinton and Congress, are willing to spend on top of already large federal budget deficits. It also depends on how much stimulation Clinton and his economic advisors think the economy needs.

The program's actual cost is unclear. The Peace Corps spends $12,000 to keep one of its volunteers in thefield for a year, a spokesperson for the groupsaid yesterday. That figure jumps to $30,000 ifyou count administrative support and overheadcosts for the agency and divide it between the6,000 worldwide volunteers.

The government would have to pay to administerthe program; to feed, equip and house volunteers;and to provide the money for college that Clintonsaid would be included in such a program.

There were 2,353,236 first-time first-yearstudents in American colleges in 1991. Fundingeach for one year of community service at a costof $20,000 a year would cost the Clintonadministration and the American taxpayers $46billion a year.

The figure is so astounding that CharlesPeters, editor-in-chief of the liberalWashington Monthly, writes in thatmagazine's January/February issue, "Bill Clinton'splan to give students a free college education inreturn for national service is...going to costmore than the nation can afford."

Clinton's proposal is taking flak fromconservatives as well as liberals. KathleenFeldstein and Professor of Economics Martin S.Feldstein '61 wrote recently in The Boston Globethat taxpayers shouldn't subsidize collegestudents at all.

"Providing a taxpayer subsidy to those who goto college and join the high-income earners in oursociety is both unnecessary and unfair," wrote theFeldsteins, who also said the proposal to repayloans as a percentage of earnings would distortwork effort.

Despite the opposition, plans are moving aheadfor some kind of domestic service program. Galstonsaid that in the next six weeks, Clinton himselfwill reach a decision on many issues of theprogram. "This is an issue in which he has taken adirect personal interest," Galston said.

Perhaps the key question is the initial size ofthe program. Harvard President Neil L. Rudenstinesaid he thinks a pilot program would be a wisebeginning.

Shattuck said he's seen one draft proposal fora program with 100,000 participants. Galston won'tcomment, other than to say "disregard all thenumbers you hear."

If a small program is approved initially, "itwould build up," Harmon said.

Another question is benefits. How much moneytoward college would a participant get, and howwould it be granted? Rudenstine and Shattuck bothtalk of rewarding participants with federalstudent loan forgiveness vouchers.

These would be of use only to those withfederally guaranteed student loans.

The face value of the vouchers is also to bedecided. Shattuck mentioned a $5,000 per-yearserved loan forgiveness, while Rudenstine said an$8,000 or $10,000 forgiveness would be adequateincentive to students who might otherwise takebetter paying jobs.

Of particular concern to students iseligibility for the program. Participants may bechosen based on means-testing, a lottery, orability to contribute to "critical nationalneeds," Galston said.

A final point of discussion is theadministration of such a program. Clinton mustdecide which federal agency should run theprogram. He also must also decide how much of theprogram should be locally controlled (likeBoston's City Year program) and how much should befederally administered (like the Peace Corps andVista).

Whatever shape Clinton's national serviceprogram finally takes, and however much it finallydiffers from the promises of the party platform,advocates said the program still sends animportant message.

"National service is a very important idea inan effort to redefine citizenship," Galston said.

"Anything, even a smaller program to beginwith, would be amazing," Harmon said

The government would have to pay to administerthe program; to feed, equip and house volunteers;and to provide the money for college that Clintonsaid would be included in such a program.

There were 2,353,236 first-time first-yearstudents in American colleges in 1991. Fundingeach for one year of community service at a costof $20,000 a year would cost the Clintonadministration and the American taxpayers $46billion a year.

The figure is so astounding that CharlesPeters, editor-in-chief of the liberalWashington Monthly, writes in thatmagazine's January/February issue, "Bill Clinton'splan to give students a free college education inreturn for national service is...going to costmore than the nation can afford."

Clinton's proposal is taking flak fromconservatives as well as liberals. KathleenFeldstein and Professor of Economics Martin S.Feldstein '61 wrote recently in The Boston Globethat taxpayers shouldn't subsidize collegestudents at all.

"Providing a taxpayer subsidy to those who goto college and join the high-income earners in oursociety is both unnecessary and unfair," wrote theFeldsteins, who also said the proposal to repayloans as a percentage of earnings would distortwork effort.

Despite the opposition, plans are moving aheadfor some kind of domestic service program. Galstonsaid that in the next six weeks, Clinton himselfwill reach a decision on many issues of theprogram. "This is an issue in which he has taken adirect personal interest," Galston said.

Perhaps the key question is the initial size ofthe program. Harvard President Neil L. Rudenstinesaid he thinks a pilot program would be a wisebeginning.

Shattuck said he's seen one draft proposal fora program with 100,000 participants. Galston won'tcomment, other than to say "disregard all thenumbers you hear."

If a small program is approved initially, "itwould build up," Harmon said.

Another question is benefits. How much moneytoward college would a participant get, and howwould it be granted? Rudenstine and Shattuck bothtalk of rewarding participants with federalstudent loan forgiveness vouchers.

These would be of use only to those withfederally guaranteed student loans.

The face value of the vouchers is also to bedecided. Shattuck mentioned a $5,000 per-yearserved loan forgiveness, while Rudenstine said an$8,000 or $10,000 forgiveness would be adequateincentive to students who might otherwise takebetter paying jobs.

Of particular concern to students iseligibility for the program. Participants may bechosen based on means-testing, a lottery, orability to contribute to "critical nationalneeds," Galston said.

A final point of discussion is theadministration of such a program. Clinton mustdecide which federal agency should run theprogram. He also must also decide how much of theprogram should be locally controlled (likeBoston's City Year program) and how much should befederally administered (like the Peace Corps andVista).

Whatever shape Clinton's national serviceprogram finally takes, and however much it finallydiffers from the promises of the party platform,advocates said the program still sends animportant message.

"National service is a very important idea inan effort to redefine citizenship," Galston said.

"Anything, even a smaller program to beginwith, would be amazing," Harmon said