(MONEY Magazine) – As a Member of the United States Congress, I will introduce a bill that will allow parents who earn less than $40,000 and who contribute to the college tuition of their sons or daughters to deduct from their taxable income 30% of the amount of their contribution. The student may pursue a two-year or four- year degree at a college or post-secondary vocational school that does not discriminate in its admissions, hiring or promotion policies. Edolphus ''Ed'' Towns Member of Congress, 11th District Brooklyn

I feel that some shelter should be made for college savings by parents of any income level. Perhaps unused or ineligible funds that remain in the shelter could be donated to a college's financial aid program, rather than being taxed, at the saver's option. Helen Hersh Tjader Culver City, Calif.

Let's not overlook grandparents. Many young couples with children simply do not have the funds to set aside for education; they can, however, muster help from Grandma and Grandpa. Let SAFE work regardless of whose name appears as custodian. David L. Elmer Treasure Island, Fla.

Allow full deduction of any loan interest incurred to finance post-secondary education, regardless of the loan source or type. -- Allow complete sheltering of all income from custodial accounts until the age of 25, when most children have completed their postsecondary undergraduate and perhaps graduate education. Sheltering only $500 or less of investment income for children under 14, as is allowed under current Uniform Gifts to Minors Act rules, is ridiculous -- why bother? If the funds or some portion of them are ultimately used for some other purpose, appropriate taxes and penalties can be levied at that time, as you suggest. James M. King Address withheld

Establish a federal IRA, with payroll deduction and handled through the Social Security Administration. I would propose that the interest rate paid would be tied to a stable investment vehicle such as the 30-year Treasury bond. I would also propose that the funds be used only for reduction of the federal deficit or existing debts. Bernard E. DeLisle Vincennes, Ind.

I would project an additional incentive to parents to save for college for their children -- permitting parents to save before-tax dollars. For example, for each child under 18, parents could deduct up to $3,000 per year (or some other specified maximum) of before-tax earnings, which are put into an account for that child and used for later college or postgraduate education. Sherry Derea Lipton New York City

Instead of signing over money to a particular child, sign it over to a custodial account for all the siblings. Then parents may elect to withdraw so much for Johnnie and a different amount for Jane because Johnnie elects to go to a two-year state technical school and Jane elects to go to a top-dollar private university and then on for a law degree. Any of the money that is not used by the youngest child's 25th birthday would then revert back to the parents with a tax penalty. Robert C. Houston Danbury, Conn.

I would hope to see the Internal Revenue code amended to allow interest paid on student loans to be deductible and to allow the IRA concept to be expanded so as to allow for anticipated education costs. Stephen R. Winship Casper, Wyo.

I fully agree that we need an instrument to increase the national savings rate, but it shouldn't exclude saving for other purposes. What I remember about the ((President's)) proposed Family Savings Account was that it required savings to accumulate for a minimum of seven years, after which the funds could be used as desired. Money's plan could allow for a down payment for a house, medical bills, care of a relative (aging or disabled), retirement or education. Ronald A. Goertz Merrimack, N.H.