The transcript of a hearing before the Senate Committee on Finance concerning tax incentives for education is presented. The statements of committee members and public witnesses testimony, both oral and written, are provided, as well as letters of support. Current tax expenditures for financial aid to college students, including student loan programs, are discussed, as are the rising costs of college tuition and the difficulties students and their families have in meeting these costs. A variety of tax incentives to cover college costs are also discussed, including savings account and savings bond programs and the continuation of the tax deduction for employer-paid educational expenses. A summary of the proposed tax incentives currently before Congress is provided, as are the provisions of current laws and an appendix on the background of direct aid to students for postsecondary education. (KM)