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Clinton's Financial Aid Proposals Would Have Mixed Impact on MIT

By Zareena Hussain
Staff Reporter

President Bill Clinton's re-election may have an important impact on the education of current and future MIT students.

"There's going to be a definite focus on education. Educational opportunity will expand more in the future," said Areej Hassan '99, president of the MIT College Democrats.

Among Clinton's election year proposals were a $1,500 tax credit for the first two years of college as well as a $10,000 tax deduction specifically targeted to help parents pay for college tuition.

While many may have voted for Clinton for his commitment to helping Americans finance education, the details of how to finance these proposals have yet to be worked out.

"There has been considerable bi-partisan criticism of the proposals as they now stand," said Director of Student Financial Aid Stanley G. Hudson.

The effect of a tax credit and tax deduction would result in a decreased tax liability for families, Hudson said. Eligibility for aid, both federal and institutional, is determined by subtracting taxes paid from income.

While families who do not currently receive need-based aid would realize the full benefit of the tax savings, needy families would receive a direct benefit of only half the tax savings, Hudson said.

"Tax deductions for tuition assistance do not target the neediest students," Hudson said. "I would prefer to see the funds used for direct student aid."

If resources from direct grants to needy students are reallocated to tax deductions and credits, needy students will be denied access to higher education, Hudson said.

Another Clinton proposal to pay $1,000 grants to students in the top 5 percent of their high school class is also viewed with skepticism by some because overall it would also move funds into the hands of wealthier students who usually do better in the first place, Hudson said.

MITstudents would obviously benefit since almost all would qualify, Hudson said. "However, there is considerable national criticism of the proposal because it would take tax money and put it in the hands of students and families who would less likely need it."

MITcurrently receives about about $3.2 million in federal grants for undergraduates as well as $2 million in federal college work-study funding. About $700,000 a year is added to the Institute's revolving fund for Perkins loans. In addition, $18 million in Federal Stafford Direct Student Loans are made to undergraduate and graduate students.

"Unless a change is made in methodology - which for federal funds is established by the Congress - a decreased tax liability would have the effect of increasing discretionary income, which would result in less need-based aid," Hudson said.

MIT GOP, Democrats spin results

Education was only one of the issues that Democrats and Republicans debated this year. Now that the elections are over, MIT College Democrats and Republicans are busy putting their spins on the results.

Republicans maintained control of the House of Representatives, despite some losses, and increased their majority in the Senate.

The presence of the GOP in Congress is a possible stumbling block the president will have to overcome. "I think there is going to be a lot of gridlock," Hassan said. But Clinton does have several initiatives he will continue to push, she said.

In Massachusetts, Democrats fared better and swept all the Congressional races.

Democratic Sen. John Kerry won re-election to the Massachusetts U.S. Senate seat, defeating Republican Gov. William Weld.

"I'm still in shock over John Kerry," Hassan said. "I knew he'd pull out, but I didn't think he'd pull out ahead so quickly."

The Weld-Kerry race was a statistical dead heat going into election day, Hassan said. The victor was not expected to be known until late into the night on Election Day. However, Kerry was already projected winner early in the evening.

Although they were surprised that Weld lost in Massachusetts, the College Republicans are heartened by Republican senatorial victories in Arkansas, Nebraska, New Hampshire, and Colorado, said Michael Stanley '99, treasurer of the College Republicans.

For Democrats, Clinton's re-election signifies an affirmation of his four years in office.

"He had some rough times - particularly health care - but now I think he's definitely in the right direction," Hassan said. "Americans recognize that and want him to continue on."

For Republicans, the GOP's strong showing in the congressional races is a sign of Clinton's weakness.

"By winning the Arkansas Senate seat, the GOP demonstrated that Bill Clinton's support is weak even in his home state," Stanley said.