ERIC Number: ED197651
Record Type: RIE
Publication Date: 1981-Jan
Reference Count: 0
A Guide to Tax Policy and Higher Education: An Analysis of Tuition Tax Credits, Tax Savings Plans, Vouchers and Independent Higher Education. Tax Policy Papers: 1981, Issue I.
Milliken, Christine Topping
Details and policy implications of proposals concerning tuition tax credits, tax allowances, and vouchers for private colleges and universities are considered. Several formulas for tuition tax credits are tested to determine whether a tuition tax credit can be both cost-sensitive and need-sensitive. Advantages and disadvantages of tax saving plans for educational purposes are explored, and it is suggested that a careful examination of educational voucher plans demands a total reexamination of the future financing of American higher education. Unlike federal student assistance, the large majority of the benefits of tuition tax credits are distributed to middle and upper income taxpayers. Need-sensitivity can be affected by making the tax credit refundable, by imposing an income eligibility cap, and by choosing a pro-rata offset formula of tax-free awards. The use of an income-sensitive percentage of costs does not affect need-sensitivity for students attending independent colleges. Most tuition tax credit proposals are limited to full- and half-time students. It can be expected that tuition tax credits will increase the regulatory burden on institutions. The principle motivation of tax savings plans is to lure people into greater levels of savings by offering taxpayers the opportunity to sequester funds for home purchase or educational expenses and receive a dollar-for-dollar tax reduction. It is suggested that the economic outlook is the dominant variable in considering the political context in which tuition tax credits, tax savings plans, and the level of appropriations for federal student assistance must be considered. (SW)
Descriptors: College Students, Cost Effectiveness, Educational Finance, Educational Vouchers, Financial Policy, Higher Education, Need Analysis (Student Financial Aid), Private Colleges, Student Financial Aid, Tax Credits, Tax Rates, Tuition
National Institute of Independent Colleges and Universities, 1717 Massachusetts Avenue, N.W., Suite 503, Washington, DC 20036 ($5.00).
Publication Type: Opinion Papers; Reports - Descriptive
Education Level: N/A
Authoring Institution: National Association of Independent Colleges and Universities, Washington, DC. National Inst. of Independent Colleges and Universities.