Various aspects of tax allowances for the expenses of higher education, and alternative subsidies are analyzed. A tax allowance for education is presented as one way to give more financial relief to middle-income families. The current distribution of student aid among income groups is discussed and data on college enrollment rates, family incomes, and college charges are examined. A general discussion of education tax allowances including consideration of the various forms such allowances can take and a brief legislative history of Senate-approved measures is presented. A set of criteria or standards are suggested for comparing different student aid subsidies and these criteria are used to evaluate alternative approaches to providing student aid for middle-income families. The appendices contain a brief description of tax expenditures and other student aid programs and a discussion of education tax allowances and tax equity. (SPG)