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Office of the Press Secretary

For Immediate Release January 9,1998
                            PRESIDENT CLINTON 

WORK-STUDY - Expanded to one million recipients

The Federal-Work Study program, originally created by President Johnson in 1964, as part of the War on Poverty, provides undergraduate and graduate students with part-time employment to help meet their financial needs and to give them experience while helping the campus or surrounding community. The FY 1999 Budget will increase work-study funding to $900 million, which is nearly a 50% increase since FY 1996.

HOPE SCHOLARSHIP CREDIT - Took effect on January 1, 1998

The Hope Scholarship Credit Helps make the first two years of college (or post-high school vocational training) universally available. Families are eligible for tax credits of up to $1500 per-student for tuition in a student's first year and another $1500 in the second year. The credit is available for college enrollment (and tuition paid) after January 1, 1998. 5.8 million students are estimated to benefit annually.

EDUCATION IRAs - Took effect on January 1, 1998

For each child under age 18, families may now deposit $500 per year into an Education IRA in the child's name. Interest on these accounts is exempt from taxation if used for higher education. In addition, taxpayers may now withdraw funds from a regular IRA, without penalty, for their own higher education expenses or those of their spouse, child, or grandchild.

LIFETIME LEARNING CREDIT - Will take effect July 1, 1998

This tax credit helps offset tuition costs for college juniors, seniors, graduate and professional degree students, as well as for adults who want to go back to school, change careers, or take a course or two to upgrade their skills. A family will receive a 20% tax credit for the first $5,000 of tuition and required fees paid each year through 2002, and for the first $10,000 thereafter. The credit is available for enrollment (and tuition paid) after July 1, 1998. 7.1 million students are expected to benefit annually.

PELL GRANTS - Largest increases in 20 years

For the past two years, President Clinton has proposed, and Congress has adopted, record increases in the maximum Pell Grant award. In the coming school year, 1998-99, nearly 4 million low- and moderate-income students will receive a Pell Grant of up to $3,000. That is a 30% larger grant than when President Clinton came into office.

STUDENT LOANS - Cheaper, easier to get, new pay as you earn plan

More than 5 million students and parents will take out $30 billion in Federally-backed student loans this year. Under student loan reforms enacted in the Administration's first year, the up-front fees on those loans have been cut by as much as half, interest costs are lower, and students have more repayment options than ever before, including the pay-as-you-earn (income contingent) repayment plan. The program simplification pioneered by the Direct Loan Program has also spurred improvements to the government-guarantee system, improving all students' access to loans.

AMERICORPS - Paying for college by doing community service

This year, nearly 50,000 young people will take advantage of the opportunity to perform community service, either on a full-time or part-time basis, allowing them to earn an award to pay for college or repay student loans. Participants in the AmeriCorps program earn education awards of up to $4,725 for each year of service.