Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, June 28, 1990                   TAG: 9006280787
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/1   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

TUITION-LOAN PLAN WOULD TAP SOCIAL SECURITY

The Economic Policy Institute released a proposal by University of Massachusetts economist Barry Bluestone and colleagues to make available to every American a lifetime "line of credit" of $40,000 to finance the costs of college or university education or vocational training or apprenticeship.

Social Security surpluses, estimated by the Congressional Budget Office to reach $73 billion by 1991, would be used to underwrite the program. Costs would total about $40 billion per year but are expected to rapidly decrease, as the surplus continues to grow.

Borrowers could take up to 25 years to repay their loans by means of a levy on future earnings. The Internal Revenue Service would collect the payments through payroll deductions. The payments would remain low if a student's income after school is low, and increase as the student's income level rises.

The report pointed to statistics that show the ratio of annual earnings of college graduates to high school graduates has increased from 1.5 to one in 1963 to more than 1.8 to one in 1987 - an increase of 20 percent. A recent survey found that one-third of the students who delayed or indefinitely put off college pointed to the expense involved.

The program would assist about 9 million students each year - 7 million to 7.5 million in colleges and universities and 1.7 million in vocational training.

Bluestone and co-authors Alan Clayton-Matthews and John Havens of Boston College and Howard Young of the University of Michigan said their plan would create a new Education Department agency to raise capital for the program, make the awards to students and oversee repayment.