A push for college-cost relief

WASHINGTON -- Senate Democrats will try to seize the initiative on the college-cost issue today, proposing a $15 billion package of increases in federal financial aid and tax relief for students and threatening to penalize states that cut funds for public colleges and universities by more than 10 percent a year.

Senator Edward M. Kennedy of Massachusetts said he and other Democrats want to use the upcoming rewrite of the Higher Education Act of 1965 to guarantee students the "education security" that seniors have with Social Security, and he challenged Republican leaders and the White House to work in a bipartisan way to broaden access to college.

"Students and families are struggling to get into and afford college," Kennedy said in a statement released by his office yesterday. "We should do all we can to help them."

Last week, the College Board reported that the average tuition at public institutions rose 14.1 percent this academic year and 6 percent at private colleges, turning up the heat in the simmering debate over what leverage Congress has to control college costs. The federal government provided $55 billion in student grants and loans this year, and the Democrats' proposal to add $15 billion more probably will face opposition in the Republican-controlled Congress, particularly at a time of growing budget deficits.

Senator Judd Gregg, the New Hampshire Republican who chairs the Health, Education, Labor and Pensions Committee, has not yet put forward his proposals on the rewriting the act, which funds financial aid programs. But at a recent Senate hearing, Gregg said his focus would be on "promoting reasonable tuition levels and efficiency in higher education."

In the House, leading Republicans recently introduced legislation that would threaten hundreds of millions of dollars in federal financial aid to public and private colleges if their tuition increases are more than double the nation's inflation rate.

The Republican House proposal is vehemently opposed by many college presidents, including some in Massachusetts, which has some 200 institutions of higher education. Kennedy said he "rejects the price controls on college tuition."

Tuition hikes are putting political pressure on lawmakers to increase federal financial aid, and Kennedy's proposal would do that, raising the maximum Pell Grants for low-income students from $4,050 to $4,500 and the average package of what is known as campus-based aid, including work-study grants, from $800 to $1,050. In addition, the Senate Democrats' bill would double the annual Hope Scholarship tax credit from $1,500 to $3,000 for middle-income families and for the first time allow low-income families to take the $3,000 credit as a tax refund.

The Democratic bill would double, from $9,000 to $18,000, the amount a student could earn before losing Pell Grant eligibility; convert the current tax deduction for student-loan interest into a tax credit; and permit graduates to refinance consolidated student loans at a lower interest rate. Part of the $15 billion in new funds proposed by Kennedy, the senior Democrat on the Senate Health, Education, Labor and Pensions Committee, would go to increasing funds for GEAR UP and TRIO, programs that help prepare disadvantaged and minority students for college.

Instead of mandating that colleges cut costs, Kennedy wants states to stop cutting education appropriations that have resulted in public universities raising tuition dramatically. Under his bill, states that decreased funding for higher education by more than 10 percent in a year would lose new federal financial aid.

"It's a fairly draconian proposal and a shot across the bow," said Brian K. Fitzgerald, staff director of the federal Advisory Committee on Student Financial Assistance. "There would be penalties if the states don't maintain the effort."

Kennedy also proposed a $5 million fund to help colleges create purchasing consortia to cut costs, and he called on the Bush administration to convene a higher-education "arms-control summit" and waive antitrust rules that would prohibit college administrators from sharing strategies to limit tuition increases.

College lobbyists say they do not expect Congress to act until next year on the renewal of the Higher Education Act.