WASHINGTON - Ask David Merkowitz what he thinks of President Clinton's tax proposals to help families finance higher education and he will tell you a funny story about his car insurance.
Merkowitz, who has a daughter in college, receives a discount on his premium if she keeps a B average - a break that works like the $1,500 tax credit proposed by the president.
The only problem is that Merkowitz's daughter attends an experimental college that doesn't give out grades - and he had a tough time last year convincing his insurance company that she was in good standing.
To be sure, Merkowitz, a spokesperson for the American Council on Education, and numerous other education analysts are thrilled that Clinton has put education at the top of his second-term agenda.
Middle-class Americans increasingly have become worried over the costs of college tuition and fees, which are expected to increase at nearly twice the rate of inflation. Education analysts predict that college costs will be at least 80 percent higher by 2005 than they are today.
Thus, many experts consider the president's goal of helping parents finance higher education for their children an important and positive message.
At the same time, however, they fear that a patchwork of logistic - and possibly even ethical - glitches could emerge as the administration tries to apply the program nationwide to thousands of widely diverse colleges and universities.
Traditionally, college financial aid has come in the form of government-financed grants that are awarded to the neediest students and through private, government-backed loans - the mainstay of middle-class attempts to finance a college education.
Nearly two-thirds of U.S. college students borrow money to go to school, according to the National Association of Student Financial Aid Administrators. And Department of Education figures show that total loan volume increased 50 percent between 1992 and 1996.
Never before has student aid come in the form of tax relief. "This would be a very substantial change in the way we do student aid," Merkowitz said.
As a result, the proposals have raised some troubling questions. Will the tax credit, for example, put the IRS in the position of checking up on student grades? And, in an attempt to ensure that a B is a B, will Uncle Sam impose a new level of regulation on higher education?
Institutions envision a paperwork nightmare in attempting to administer the plan, particularly juggling the requirements of the typical financial aid year - where the work gets done between July and the following June - with tax issues, which are tied to the calendar year.
Some critics also have raised the disturbing possibility that such tax breaks will inspire tuition hikes, and that the president's proposals - aimed squarely at the middle class - will make it even harder for lower-income students to go to college.
The centerpiece of Clinton's plan is the "Hope scholarship" tax credit of up to $1,500 per student for the first year of college and an additional $1,500 for a second year, as long as the student earned a B average during the first year.
The proposal, estimated to cost $18.6 billion over five years and help 4.2 million middle-income students by 1998, is modeled after a Georgia state program with the same name.
But unlike Georgia, which has statewide standards for grades, "there is no national standard for what a B average is," said Marvin Carmichael, chair of the NASFAA and director of the financial aid office at Clemson University in South Carolina.
Some educators point out that students who leave high school face unusual adjustments and new pressures during that critical first year of college, a situation that could make maintaining good grades difficult.
"It's unrealistic to expect that students who come in with a B average (from high school) will keep it, especially that first year," Carmichael said. "At Clemson, about 30 percent to 40 percent of our students have a B average or better - but 85 percent come in with it."
Some suggest that students might decide to choose easier courses during their freshman year to ensure their grades will preserve the financial help.
Experts want to know the extent of IRS involvement in requiring proof of grade average - would the agency, for example, ask for college transcripts? This potential situation already has raised privacy-violation concerns among educators.
"The last thing we want is the federal government determining what a B average is," Merkowitz said. "Records now are highly protected, and colleges do a very good job protecting privacy."
Some critics also have predicted that college fees could rise in response to the program, offsetting the potential benefits.
although others insist that it is too soon to tell.
Merkowitz said he believes that the opposite will occur - that some colleges could respond to the tuition tax credits by lowering their fees.