Higher ed and President Obama

I caught this NPR clip (here) earlier this week discussing how President Obama might address some higher education issues. A couple of news articles covering the same topic can be found here and here and the best one is here.

One part of his agenda is to offer a $4,000 tax credit to help cover tuition costs. I’m no tax expert, but it doesn’t seem like this is going to really solve the cash-flow issue low-income students have when paying for college. When a tuition bill is due, the student can’t say “wait til I get my tax credit next year…” While this policy sounds appealing at first blush, when we start to think about implementation it leaves a lot to be desired. Is this really the most efficient and effective way to provide direct subsidies to help students cover the immediate costs of college? I recall a public finance professor of mine explaining that social policy shouldn’t be done throgh the tax code. If we want to direct subsidies to low income students, why don’t we just put them into expanding the Pell Grant, creating development/savings accounts, or providing institutions incentives to keep tuitions down? Like the woman says in the NPR interview, investing in strategies to make the financial aid process more transparent and simple to use would also be effective ways to promote college access. Don’t get me wrong, I’ll sign up to receive that tax credit if it’s available to me. However, I am just not convinced this is the most effective way to incentivize college enrollment behavior.