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Endnotes

1	U.S. General Accounting Office, College Savings Information on State Tuition Prepayment Programs (Washington, D.C.: Government Printing Office, 1995)
2	U.S. General Accounting Office, Report on Student Debt Burdens (Washington, D.C.: Government Printing Office, 1998).
3	These figures are based on enrollment, income and tuition data from the 1995-96 academic year and on projections provided by the U.S. Department of Education (see Appendix, Tables 1 and 2).
4	New York, for instance, provides its residents with need-based financial aid through its Tuition Assistance program. Under this state entitlement program, which costs about $630 million annually, New York families with a dependent student enrolled in a four-year public college would not be eligible for the maximum HOPE tax credit unless their taxable income is between $45,000 and $80,000. Based on national averages, most families would be eligible for the full HOPE tax credit if their annual taxable income is between $40,000 and $80,000. In response to this situation, the New York State Higher Education Services Corporation has recommended studying whether changes can be made in the state program so that federal funds can be used rather than state funds.
5	In 1978, President Carter worked to develop and pass the Middle Income Student Assistance Act (MISAA). The plan increased the maximum income allowable to receive a Pell grant, and expanded eligibility for and removed the income ceiling from subsidized student loans. The interest rate was such a bargain that House and Garden magazine printed an investment article, "How you can make a substantial profit from a student loan." Federal costs for the program soon exploded, and three years later, in 1981, Congress instituted a needs test for the guaranteed student loan program, whereby students with family incomes above $30,000 were limited to borrowing no more than the difference between their educational costs and their expected family contribution.
6	For example, the Minnesota Higher Education Services Office has studied the interaction of federal Pell grants, Minnesota state grants, and the federal HOPE tax credit. Their analysis used current academic year tuition and fee data and the Minnesota living and miscellaneous expense allowance, and eligibility requirements for state-sponsored scholarships to calculate how the cost of attendance is shared by the taxpayer (through federal and state financial aid), the student, and the family.
7	This recommendation is directed to those states that generally conform their state tax codes to federal deductions of income. Those states that have broad definitions of income (with few exclusions, deductions, exemptions, or credits) should not conform to the federal tax code.

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© 1998 The National Center for Public Policy and Higher Education