Experts Say Tax Credit Most Likely Result Of Obama's Higher Ed Plan

This story was written by Jessica Bell, Daily Pennsylvanian
Of the higher-education initiatives proposed by President-elect Barack Obama during his campaign, college accessibility and affordability rank highest on the priority list, education experts say.

Additional financial aid will most likely come in the form of an American Opportunity Tax Credit, a fully refundable credit program that would cover students' tuition costs in exchange for community service.

If passed, the plan would ensure that the first $4,000 of a college education is free for most Americans - a sum which would cover two-thirds of the cost of tuition at the average public college or university.

Students who receive the credit would be required to perform 100 hours of community service.

The problem with Obama's tax credit plan is that "it is very expensive," said Bill Andresen, head of Penn's Washington office. He added that Congress has considered the policy in the past.

It is unclear if the $4,000 tax credit will come from completely new funding or if part of the money will come from collapsing current higher-education tax plans, said Tony Pals, a spokesman for the National Association of Independent Colleges and Universities.

The American Opportunity Tax Credit is Obama's "most important" higher-education policy proposal, according to Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, but Obama's current focus is on selecting an education secretary.

"The White House won't focus on higher education initially," Nassirian said. "But once they have appointees in place, they will act energetically."

And while Obama has not nominated anyone for Education secretary, "the talk is that the person who fills the position will come from a K-through-12 background," Pals said.

According to Pals, this focus on primary and high-school education could be negative for universities because if higher education is put on the "back burner," there could be less emphasis on increasing student aid programs.

At the same time, such an appointee might "take the attention off of the higher-education accountability of recent years," Pals said.

There has been a recent trend of increased government scrutiny of how universities manage their money, as demonstrated by a recent questionnaire the Internal Revenue Service distributed to colleges.

As far as improving college accessibility, Obama has also proposed increasing funding for Pell Grants, Andresen said.

Obama has also endorsed greater federal investment in research, which is a key issue for research universities like Penn, said Barry Toiv, spokesman for the Association of American Universities.

But for the most part, in the Obama administration universities will benefit more from larger initiatives that will stimulate the entire economy rather than specific higher-education proposals, said Randall Miller, a St. Joseph's University history professor and political analyst.
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