Clinton Proposes Plan to Reduce College Costs by Limiting Tax Deductions
Hillary Clinton has rolled out a plan to make college affordable that her presidential campaign has dubbed the New College Compact, enabling students to pay for higher education without taking out costly student loans.
Under the New College Compact, no student should have to borrow to pay tuition at a public college, said Clinton on her Web site. Schools will have to control their costs and show more accountability to their students. States will have to meet their obligation to invest in higher education. The federal government will increase its investment in education, and wont profit off student loans. And millions with student debt will be able to refinance it at lower rates.
The incentive-based program would give money to states that offer no-loan tuition at four-year public universities and community colleges. Those who are already paying off their student loans would be able to refinance at todays current interest rates. Under her plan, students who qualify for Pell Grants would be able to use them for living expenses??and middle-class students would get more help to cover their living expenses. Clinton introduced the plan during a speech Monday at Exeter High School in New Hampshire.
The estimated $350 billion plan would in part be paid for by reinstituting limits on itemized deductions for high-income families that were in effect during the Reagan administration, according to the Washington Post.
At least one group is concerned about limits being placed on charitable deductions. "Hillary Clinton has proposed a plan to reduce the cost of college tuition and alleviate student debt burdens by capping itemized deductions, including charitable deductions, at 28 percent for certain families and individuals, said Andrew Watt, president of the Association of Fundraising Professionals. Although the goal of Mrs. Clintons plan may be laudable, we are concerned with the proposed funding mechanism that effectively diverts money away from charitable causes.
Two of Clintons opponents for the Democratic nomination, Sen. Bernie Sanders of Vermont and former Maryland Governor Martin OMalley, have also proposed their own plans for college affordability, according to CNN. Sanders has pledged to make tuition for four-year public colleges and universities free, while OMalley has proposed a debt-free college tuition program that is similar to Clintons, while also expanding Pell Grants and freezing college tuition.
Michael Cohn is the editor-in-chief of AccountingToday.com.
- Families Failing in College Preparedness
- College Strategies: Best Way to Help With the Tuition Bill
- 5 Things to Tell Clients About College Costs