Senator William Roth (R-Del.), the chairman of the Senate Finance Committee, has come up with his own proposal to help parents fund college tuitions.

Here are some of the features:

• The centerpiece is called an education investment account, which would allow parents, grandparents or anyone else to contribute income or assets to a student's Education Investment Account (EIA) -- the money being available for tax-free withdrawal when the student is ready for college.

• There would, however, be a $2,000 a year cap on the amount that could be deposited in the EIA.

• Parents with children ages 13 to 16 could take the $500 per child tax credit offered in the overall tax plan -- but only if they deposited the money in an EIA.

• Earnings in state and private prepaid tuition plans would also be tax-free.

Finally, Roth includes a provision allowing a deduction of $2,500 a year for interest paid on student loans.

Some analysts see the EIA provision as a good idea, but have problems with some of the other features which they find restrictive.

The $2,000 limit on EIA annual contributions, for example, they find unrealistic since the cost of a typical private university education could be $100,000 by the time today's newborns are ready for college.

Also, forced channeling of the $500 per child tax credit into an EIA infringes on the rights of parents to decide how best to use the money. Moreover, it denies low-income families the ability to use the money for more pressing, day-to-day needs.

Finally, some experts question why the federal government should encourage students to get even more heavily in debt through more student loans.

Source: John S. Barry (Heritage Foundation), Too Much Meddling in Roth's College Plan, Investor's Business Daily, June 19, 1997.