Paying For College: Who Deserves Tuition Aid?

Just last month, the College Board reported that tuition continues to rise faster than family income, even amid a booming economy. So which presidential candidate offers the most help to strapped parents and students? Well, it depends on their circumstances. Surprisingly, families above the median income would get more help from the Democrat, while the Republican would extend more financial aid to the poor.

Al Gore's plan is built around tax-based enticements. He would spend a whopping $36 billion on income tax credits to offset the costs of college tuition. A family could receive as much as $2,800 in tax credits each year for tuition and fee payments. Taxpayers would also be allowed to sock away as much as $2,500 a year in new tax-advantaged accounts, similar to 401(k)s, which they could tap at any age for higher education or job training. And Gore would spend $2 billion nationalizing a program, already in place in some states, that gives parents tax breaks to save for their kids' tuition.

Experts say Gore's measures wouldn't greatly increase the number of middle-class parents who can afford to send their kids to college, but rather would allow them to do so with greater ease. The credits aren't refundable, however, and wouldn't help the millions of workers who don't earn enough to owe income taxes (even though they pay hefty Social Security and Medicare payroll taxes).

Ivan Frishberg, director of the higher-education project for the State Public Interest Research Group in Washington, notes that for the sum Gore proposes to spend on tax breaks for tuition, he could fully fund Pell grants to send low-income students to four years of college — and would have money left over to offer tax credits for interest paid on student loans.

Bush's plan would let parents save as much as $5,000 a year in new tax-advantaged accounts that could be tapped for a wide range of education costs, from private kindergarten to graduate school. He also offers $1.5 billion in merit scholarships, most of which are likely to be claimed by kids from more affluent schools.

But most of his gravy is for the less well off. Bush promises $1,000 bonus grants to low-income students who take college-level math and science courses while in high school. He would add $600 million in new funding for historically black and Latino colleges. And he would spend $5 billion to fully fund Pell grants to pay for the freshman year of college for students from families earning less than $20,000 a year.