ERIC Number: ED255160
Record Type: RIE
Publication Date: 1985
Reference Count: 0
Incentives for Tuition Savings.
Miller, Scott E.
The role of the federal government in authorizing tuition savings plans and the relationship of these incentives to more traditional student aid programs are examined. Most of the recent proposals to provide incentives for families to save for their children's education would allow tax breaks. For example, the Reagan administration proposal would allow families to set aside $1,000 per year, per student for college costs. The money saved would be deducted from a family's taxable income. Benefits from these plans are intended for lower and middle-income families; under the Reagan administration plan only families with incomes under $60,000 would be eligible. The tax benefit, though, would be greater for families in higher tax brackets. The benefits derived from savings incentives are not distributed on the basis of need at the time of college attendance. The major focus of current programs is to provide assistance to the lowest-income students. It is concluded that there are two serious limitations on tuition savings plans: their impact cannot be felt for many years, and they do not provide significant benefits to lower-income students. Additionally, these programs are complex and require a working knowledge of federal tax laws for families to understand them. (SW)
Descriptors: College Students, Economic Status, Higher Education, Incentives, Low Income Groups, Parent Financial Contribution, Policy Formation, Position Papers, Public Policy, Tax Credits, Tax Deductions, Tuition
American Council on Education, Division of Policy Analysis and Research, One Dupont Circle, Washington, DC 20036-1193 (limited supply, free).
Publication Type: Opinion Papers; Reports - Evaluative
Education Level: N/A
Sponsor: EXXON Education Foundation, New York, NY.
Authoring Institution: American Council on Education, Washington, DC. Div. of Policy Analysis and Research.
Identifiers: College Costs; Reagan Administration; Savings Accounts; Tuition Savings Plans
Note: For related documents, see HE 018 214-217.