2A - The Michigan Daily - Monday, February 10, 1997
Education tax breaks raise questions

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Los Angeles Times
WASHINGTON -Ask David Merkowitz what he
thinks of President Clinton's tax proposals to help
families finance higher education and he will tell you
a funny story about his car insurance.
Merkowitz, who has a daughter in college, receives
a discount on his premium if she.
keeps a B average - a break that
works like the $1,500 tax credit 0
proposed by the president.
The only problem is that
Merkowitz's daughter attends an " ':
experimental college that doesn't
give out grades - and he had a
tough time last year convincing
his insurance company that she
was in good standing.
To be sure, Merkowitz, a Clinton
spokesperson for the American
Council on Education, and numerous other education
analysts are thrilled that Clinton has put education at
the top of his second-term agenda.
Middle-class Americans increasingly have become
worried over the costs of college tuition and fees,
which are expected to increase at nearly twice the rate
of inflation. Education analysts predict that college
costs will be at least 80 percent higher by 2005 than
they are today.
Thus, many experts consider the president's goal of
helping parents finance higher education for their
children an important and positive message.
At the same time, however, they fear that a patch-
work of logistic - and possibly even ethical - glitch-
es could emerge as the administration tries to apply
the program nationwide to thousands of widely
diverse colleges and universities.
Traditionally, college financial aid has come in the
form of government-financed grants that are awarded
to the neediest students and through private, govern-

ment-backed loans - the
mainstay of middle-class
attempts to finance a college
education.
Nearly two-thirds of U.S.

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ANALYSIS

during the first year.
The proposal, estimated to
cost $18.6 billion over five years
and help 4.2 million middle-
income students by 1998, is

college students borrow money
to go to school, according to the
National Association of Student Financial Aid
Administrators. And Department of Education figures
show that total loan volume increased 50 percent
between 1992 and 1996.
Never before has student aid come in the form of
tax relief. "This would be a very substantial change in
the way we do student aid," Merkowitz said.
As a result, the proposals have raised some troubling
questions. Will the tax credit, for example, put the IRS
in the position of checking up on student grades? And,
in an attempt to ensure that a B is a B, will Uncle Sam
impose a new level of regulation on higher education?
Institutions envision a
paperwork nightmare in
attempting to administer the V
plan, particularly juggling the Recor
requirements of the typical areh dI
financial aid year - where
the work gets done between
July and the following June p e
- with tax issues, which are-Da
tied to the calendar year. Edu
Some critics also have
raised the disturbing possibili-
ty that such tax breaks will inspire tuition hikes, and
that the president's proposals - aimed squarely at the
middle class - will make it even harder for lower-
income students to go to college.
The centerpiece of Clinton's plan is the "Hope
scholarship" tax credit of up to $1,500 per student for
the first year of college and an additional $1,500 for a
second year, as long as the student earned a B average


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V

modeled after a Georgia state
program with the same name.
But unlike Georgia, which has statewide standards
for grades, "there is no national standard for what a B
average is," said Marvin Carmichael, chair of the
NASFAA and director of the financial aid office at
Clemson University in South Carolina.
Some educators point out that students who leave
high school face unusual adjustments and new pres-
sures during that critical first year of college, a situa-
tion that could make maintaining good grades diffi-
cult.
"It's unrealistic to expect that students who come in
with a B average (from high school) will keep it, espe-
cially that first year," Carmichael
said. "At Clemson, about 30 per-
cent to 40 percent of our students
is now have a B average or better - but
85 percent come in with it."
Some suggest that students
might decide to choose easier
"'" courses during their freshman
avid Merkowitz year to ensure their grades will
cation analyst preserve the financial help.
Experts want to know the
extent of IRS involvement in
requiring proof of grade average - would the agency,
for example, ask for college transcripts? This potential
situation already has raised privacy-violation concerns
among educators.
"The last thing we want is the federal government
determining what a B average is," Merkowitz said.
"Records now are highly protected, and colleges do a
very good job protecting privacy."

American Airlines walkout looms .
WASHINGTON - Both pilots and management at American Airlines say'they
don't want a strike, but a walkout looms as they prepare for federally mediated talJs.
this week.
The Allied Pilots Association and AMR Corp., parent company of American=
Airlines, will take their dispute before the National Mediation Board today, five
days before a strike deadline of 12:01 a.m. Saturday. .
Failure to agree could mean the nation's largest domestic airline could be grounded
during the busy Presidents' Day weekend. The scenario has passengers, businesses
and the airline's 90,000 employees making arrangements in case the Stoppage comes.,
Union President Jim Sovich said last week a strike is "more likely than not" after.
the union met with American president Donald Carty and other top managers.
The union has created a "war room" to follow its pilots this week to assurethey
will know if a strike is called and to help them if the airline stops flying and leave;.
them stranded.
American Airlines also is preparing, including notification to employees that,
they could soon be laid off.
To pay the bills in case a strike ends flight operations, the airline has borrow'
$1 billion from an existing credit line and has pledged its fleet as collatera1

another $1 billion in credit.
Clinton health plan
wories veterans
WASHINGTON - The Clinton
administration's plan to underwrite
costs of health care for the nation's 26
million veterans with insurance and
Medicare payments has alarmed the
veterans lobby and could jeopardize
their support of the president's policies
on Capitol Hill.
For President Clinton, a non-veteran,
no group has proved a more unlikely
ally than Washington's strong veterans
lobby. To the dismay of Republicans,
the veterans generally have supported
the Democratic administration and
policies of Veterans Affairs Secretary
Jesse Brown.
Veterans advocates have offered a
simple rationale for their actions: the $1
billion-a-year increases Brown consis-
tently won for the VA during the admin-
istration's first four years prove Clinton
has been solidly behind their programs.
But with last week's release of the
administration's fiscal 1998 budget,
some veterans' advocates questioned
Clinton's commitment. "This is a cha-


rade,' fumed Kenneth Huber, national,
president of the Paralyzed Veterans of
America, a small but influential group.
What angered Huber and other veter-
ans' groups last week was the adminis-
tration's decision to hold the federal gov
ernment's contributions to the VA's
work of 171 hospitals level at about.$
billion a year.."
Infant HIV testing
begins in New York
NEW YORK - Hospitals in New
York have begun mandatory testing 4f.
all newborns for the AIDS virus, fie'
first such program in the United States,
"Certainly this is a very chalg
issue and an extraordinary undertakiig;
politically and as a public health'pto.:
gram," Dr. Barbara DeBuono, the state,
health commissioner, told The New.
York Times in today's editions.
The state already conducts aoiy
mous HIV tests on infants for statistical
purposes, but on Feb. 1, hospitals
agreed to mandatory disclosure of the
results, the Times reported.

..U

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U.S. jet crashes in
Yellow Sea
SEOUL, South Korea - Rain halt-
ed a search today for two U.S. Marine
pilots missing after their jet crashed
into the Yellow Sea between China and
South Korea.
The Marines' FA-18 Delta crashed
during a routine training mission
Sunday, said Jim Coles, spokesperson
for the U.S. military command in
Seoul. The search was suspended at
dusk yesterday and then resumed today
before the weather forced its suspen-
sion.
The missing officers were identified
as Capt. Mark Nickles from the
Phoenix area, and Maj. Danny
D'Eredita of Syracuse, N.Y.
The jet was over Korea with another
FA-18 jet when it went down in the sea
off Taean, 60 miles southwest of Seoul,
Coles said.
Both jets are assigned to the U.S.
Marine Corps air base in Iwakuni in
southeastern Japan. The other jet safely
landed at Osan Air Base, south of

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ti. .

Seoul.
The cause of the crash was
known. Coles said.

not

Rwandan arm aim
at Hutu mhitants ;
KIGALI, Rwanda - The Rwandan
army has launched major operations.
against Hutu militants it says are.,
responsible for recent massacres and
assassinations of local officials, foreign.
aid workers and survivors of previots.
genocide, officials said yesterday.
The three-week military acti*
apparently the largest since more than
one million Hutu refugees swartned
back from camps in Zaire and Tanzania'
late last year, is aimed at restoring secu-
rity in the Hutu strongholds in western
Rwanda where the worst of the bldod-
letting has occurred.
The United Nations and government
officials say thousands of Hutu militia-
men are attacking the Tutsi-dominated
regime and foreigners working with
- Compiled from Daily wire repots.

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